China-Africa trade has for decades been dominated by low-end products. Observers say the changing trade pattern, featuring increasing exports of Chinese high-tech products instead of labor-intensive agricultural or apparel products, demonstrates China's intention for more balanced trade and greater economic involvement in Africa.
"As China develops and the majority of African countries embrace market-oriented reforms and readjustment, economic relations have evolved gradually from free aid and donations to pragmatic economic and technological cooperation," Liu says.
The latest figures from the Chinese Commerce Ministry reveal that trade between China and Africa rocketed dramatically from 12 million U.S. dollars in 1950 to 55 billion U.S. dollars in 2006 with a 2.1 billion U.S. dollars of trade deficit on the Chinese side, making China Africa's third largest trade partner.
By 2006, China's direct investment in Africa has hit 6.64 billion U.S. dollars, covering projects of telecommunications, electric power, water conservancy, transportation, agriculture and manufacturing.
In a fresh effort to encourage Chinese companies to invest in Africa, China launched the China-Africa Development Fund in June with an initial 1 billion U.S dollars and the goal of expanding the pool to 5 billion U.S. dollars eventually.
At the helm is Beijing's policymaking China Development Bank (CDB), which forecasts a 50-year lifespan for what's being called the world's largest, single fund aimed at African development.
The fund would invest in Chinese companies that set up operations in Africa and provide advice to those planning to invest there, says Gao Jian, chairman of the new China-Africa Development Fund Co. and vice president of the CDB.
But the fund would seek neither the majority nor the largest shareholding in the businesses, Gao says. "Profits are not the fund's first priority. The China-Africa Fund first seeks to advance economic, political, and social development."
While welcomed by many African countries, China's investment in Africa also brought concerns.
Some African commentators have pointed out that China and African countries are both developing, and labor-intensive industries still play a major role in their economies. This similarity leads to competition in certain fields, such as the textile and apparel industry. They also cite the limited regard for environmental and safety standards of some Chinese companies as drawbacks of Chinese investment. (more)
Source: Xinhua
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