Chinese senior diplomat calls for expansion of Sino-Africa economic coop

China and African countries enjoy a bright prospect of increasing mutual investment, a senior official from China's Ministry of Foreign Affairs said in Beijing Thursday.

Assistant Foreign Minister Lu Guozeng said in a news briefing that Chinese companies are at an initial stage to invest in Africa. They have set up some 750 enterprises in Africa so far, which involve a total investment of 1 billion U.S. dollars.

However, he said that in response to African countries' demand for foreign direct investment, the Chinese government has adopted a positive attitude to encourage Chinese companies to invest in Africa.

In an African policy paper released Thursday, the Chinese government pledged to support and facilitate corporate investment in Africa with preferential loans and buyer's credit.

China will continue to sign and implement the agreement on investment protection and eliminate double taxation with more African countries.

"The two sides should work together to create a favorable environment for investment and cooperation and protect the legitimate rights and interests of investors from both sides," the policy paper said.

Lu said the Chinese government is pushing for the establishment of a China-Africa Joint Chamber of Commerce and Industry so as to facilitate the cooperation of companies from both China and Africa.

China and Africa enjoy a great complementarity in economy, Lu said, noting that the rich deposit of resources in Africa matches China's need for raw materials for sustained economic growth.

On the other hand, African countries want to accumulate capital by developing these resources and to advance local economies.

China is willing to conduct mutually beneficial and win-win cooperation with African countries in resource development, Lu said.

China imports oil from African countries every year, Lu said. The oil import from Africa accounts for less than one-third of total amount that China brings in from international markets every year.

African countries want to turn the oil resources into money that is desperately needed for their development. They welcome Chinese companies to participate in various parts of the oil sector, ranging from upper exploration to downstream industry of oil refining, Lu said.

However, he said energy cooperation between China and African countries is only at an early stage.

In addition, Chinese companies have conducted mining and forestation cooperation in the southern and central parts of Africa, Lu said.

Such cooperation is mutual-beneficial, Lu said, noting trade volume between China and African countries is estimated to be 40 billion U.S. dollars in 2005.

Chinese customs figures show that China imported nearly 17 billion U.S. dollars worth of goods from African countries in the first 10 months of 2005, while exports stood at about 15 billion U.S. dollars. The difference between import and exports meant a net cash flow into Africa.

According to the document, Sino-African cooperation will be promoted in 30 fields besides economic cooperation.

The fields involve high-level visits, exchanges between legislative bodies, political parties and governments, and cooperation in international affairs.

They also cover trade, investment, tourism, human resources, agriculture, medical care and health, and peace and security.

According to the document, China will facilitate the import of African products, implement the zero-tariff treatment for some imported products from the least-developed African countries.

China is also willing to negotiate a Free Trade Agreement with African countries and African regional organizations when conditions are ripe, it said.

The Chinese government encourages enterprises to invest in Africa and welcomes African companies to come to China, it said.

The government will vigorously encourage Chinese enterprises to participate in improving infrastructure in African countries, scale up their contracts, and gradually establish multilateral and bilateral mechanisms on contractual projects.

Lu said that China's economic aid for African countries is free of political conditions and is based on African countries' priorities.

China has carried out more than 800 assistance projects in Africa, ranging from railway, fabric factories, hydro-power stations, gym, office buildings, hospitals, schools, ports and roads.

China hopes that African countries can maintain stability and expand cooperation with other countries in a bid to create a sound international environment for their development, he said.

China will establish and develop a new type of strategic partnership with Africa, Lu said, noting it will feature political equality and mutual trust, economic win-win cooperation and cultural exchange.

China is also ready to enhance cooperation with all African regional organizations, including the African Union, so as to contribute to the integration and rejuvenation process of the continent, Lu said.

Source: Xinhua