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Policy Interpretation

Reading of Economic Cooperation and Trade Promotion Measures

Time:2013-03-05   Hits:2424

Announced at the Fifth Ministerial Conference
of the Forum on China-Africa Cooperation

On behalf of the Chinese government, President Hu Jintao announced at the fifth Ministerial Conference of the Forum on China-Africa Cooperation held in July 2012 new measures for deepening the practical cooperation between China and Africa and charted the direction and areas of the cooperation in the next three years. As committed at the Conference, China will implement measures in relation to economic cooperation and trade promotion in three priority areas, i.e. expanding cooperation in investment and financing, increasing development assistance and supporting the African integration process.

In light ofthe development pursuit of African countries and the need of practical China-Africa cooperation, the new measures focus on development as the theme and cooperation as the main way. While extending existing measures, the new measures highlight the features of “diversification, innovation and sustainability” and aim to boost economic growth in Africa through the collaboration between Chinese and African governments, non-governmental organizations, businesses, financial institutions, think tanks, and the press. These new measures indicate the great importance attached to the traditional China-Africa friendship and the good will to upgrade bilateral commercial cooperation for common development.

The Chinese government will work closely with African countries to implement economic cooperation and trade promotion measures adopted at the Ministerial Conference in a bid to help African countries improve the livelihood of their people, enhance their capacity for independent development, push ahead with the African integration process, and inject new vitality in the new type of China-Africa strategic partnership.

Priority Area I:China will expand cooperation in investment and financing to support sustainable development in Africa. China will provide 20 billion dollars of credit line to African countries to assist them in developing infrastructure, agriculture, manufacturing and small and medium-sized enterprises.

Policy reading:

To implement what was agreed at the fourth Ministerial Conference of the FOCAC, the Chinese government has since 2010 provided to Africa USD 10 billion worth of concessional loans. China also replenished the China-Africa Development Fund and earmarked loans for small and medium-sized enterprises in Africa. Such measures have supported the efforts by African countries in building transport, power, communications and housing projects, increased Chinese investment in Africa, promoted the growth of African SMEs, cemented Africa’s foundation for self-reliant economic development and improved Africa’s competitive position in the world economy. They were widely applauded by African countries. In recent years, infrastructure, agriculture, manufacturing and SMEs have become top development priorities for Africa and important enablers for Africa’s economic transition and upgrading and sustainable development. To support these sectors, the Chinese government will add USD 20 billion of credit line for African countries. The funds will first target joint projects in those sectors for which Africa has a funding shortfall. The 20-billion-dollar credit facility consists of concessional loans and commercial loans. The concessional loan portion exceeds the 10-billion-dollar commitment made at the 4th FOCAC ministerial conference. The 20-billion-dollar facility is not pre-allocated per country. The actual type and amount of credit provided depends on the project proposed by the African side and the result of assessment. The African applicant is advised to pre-screen and prioritize the projects for which loans are being applied by aligning projects with the chief mandate of the loan facility. It should also coordinate with the Chinese side to make sure any agreed project can be implemented without delay. Meanwhile, China will further leverage the role of the China-Africa Development Fund to mobilize more Chinese companies to invest in Africa.

Priority Area II: China will continue to increase assistance to Africa to bring the benefits of development to African people. China will build more agricultural technology demonstration centers as necessary to help African countries improve food production, processing, storage and distribution. China will send 1,500 medical personnel to Africa and continue with the Brightness Action to provide free medical treatment for cataract patients in Africa. China will implement the African Talents program to train 30,000 Africans of various professions and offer 18,000 government-sponsored scholarships. China will establish vocational and technical training facilities in Africa and provide aid on cultural facility. China will assist African countries in capacity building in meteorological infrastructure, forest protection and management. China will continue to aid well-drilling and water supply projects in Africa.

Policy reading:

1. Assistance to Africa will be further expanded. Africa is a major recipient of China’s development assistance. Despite rapid economic growth and improvement of people’s livelihood in recent years, Africa still faces serious development challenges and the daunting task of attaining the UN Millennium Development Goals. To help speed up economic and social development in Africa, the Chinese government, to the best of its capacity, will continue to assist Africa as per the needs of African countries and increase such assistance where appropriate, with a focus on improving African people’s livelihood and accelerating public service and infrastructure building. Taking into consideration their actual needs and the priorities of China’s assistance, African countries can coordinate with Chinese embassies and economic and commercial counsellor’s offices, and make specific project proposals in s areas such as agriculture, medical services, public health, culture, education, human resources training and environmental protection. They are also encouraged to work closely with their Chinese partners in project selection, negotiation and execution so as to ensure timely implementation of the projects.

2. Chinese assistance in establishing agro-technology demonstration centers. Agriculture is not only the foundation of people’s subsistence but also a pillar industry and priority for most African countries. Food security has direct bearing on poverty reduction, development and stability in Africa. The Chinese government has always valued substantive cooperation with Africa on agriculture. Since the FOCAC Beijing Summit in 2006, the Chinese government has established 15 agricultural technology demonstration centers in Africa, and now plans to set up 7 more. It will fulfill the commitment of “increasing the number of agricultural technology demonstration centers in Africa to 20” by the end of this year. Through these centers, the Chinese government could better understand the needs of various African countries, share and disseminate management expertise and know-how regarding agriculture production, and help Africa enhance capacity for self-reliant development. Taking stock of the previous work of agricultural technology demonstration centers, the Chinese government will plan and implement in the next three years a number of new agricultural technology demonstration center projects, so as to further strengthen technology training and demonstration with a focus on improving grain production, processing, storage, transportation and marketing capacity of African countries.

Third, the ‘Brightness Action’ will be continued. Medical and health care has been one of the priority areas in China’s assistance to African countries. Over the years, China has provided a large amount of aid to Africa to help improve local medical conditions and people’s health. Since the FOCAC Beijing Summit in 2006, China has helped build 30 hospitals and 30 malaria prevention and treatment centers as promised. It has also provided medical equipment and materials, and artemisinin in light of the need of African countries. In the meantime, relevant Chinese agencies, companies and medical institutions have carried out the ‘Brightness Action’ through various channels to treat cataract patients in Africa, a move delivering encouraging results and applauded by the locals. To step up cooperation in this area, more medical teams will be sent to continue the ‘Brightness Action’ in the next three years, providing free treatment to help African patients regain sight. China will also provide cataract diagnosis and treatment equipment and offer clinical training on cataract treatment to medical personnel from Africa in a bid to help improve the quality of ophthalmological care in African countries. In this way, the medical cooperation will be more effective and sustainable in bringing benefits to African people.

Forth, the ‘African Talents Program’ will be implemented. The Chinese government attaches importance to the cooperation with African countries on human resources development. At the FOCAC Beijing Summit and the Fourth Ministerial Conference, it pledged to help train 15,000 and 20,000 personnel in various sectors respectively. The actual numbers of people trained were more than 16,000 and 20,000 respectively in over 20 areas, including trade, diplomacy, defense, public administration, health care, agriculture, forestry, animal husbandry, fishing, education, radio and television broadcasting, science and technology, culture, environmental protection, telecommunications, transport, finance and energy. Such training has gone a long way to promoting Africa’s capacity for independent development. To scale up cooperation in this direction, the Chinese government will continue to provide training to 30,000 personnel in various fields for Africa in the coming three years, with a particular focus on the sectors much needed for the continent’s economic and social development.

5.Vocational and technical training facilities will be established. Africa boasts a large, young workforce. Helping them to get jobs by improving their vocational skills will translate the demographic dividend into an engine for growth, thus promoting social stability and economic development. In the next three years, China will provide assistance in vocational training for African countries in light of their conditions, in the form of building infrastructure, providing equipment and materials, and sending experts or carrying out technical cooperation. These measures aim to help African youths acquire vocational skills and thus increase employment rate in Africa. Echoing the Millennium Development Goals which call for empowering women, China will arrange training programs especially for African women.

6. Cultural facilities will be developed. Since the FOCAC Beijing Summit, China and Africa have engaged in frequent cultural exchanges. China has provided assistance by building schools, sending teachers and youth volunteers to teach Chinese, sending performance troupes, and cooperating in archeological expeditions and cultural relic restoration. These have further deepened the mutual understanding between the Chinese and African people, and consolidated our traditional friendship. In the next three years, China will scale up cultural assistance to relevant African countries by building cultural facilities and carrying out personnel exchanges and project cooperation in such sectors as radio, television, press and publication.

7. Meteorological infrastructure facilities and forest protection equipment will be provided. Protecting eco-environment and tackling climate change is already a global issue. To deal with it, Africa in particular needs assistance in capital, technology and human resources from the international community. An advocate of harmonious, sustainable and common development, China has always attached importance to environmental protection in its trade and economic cooperation with Africa. Having accumulated some experience in meteorological observation and forest protection, China is willing to share its experience with Africa and provide every possible help based on the principle of “common but differentiated responsibilities”. To this end, China will provide African countries with automatic meteorological observation stations, upper-air observation radar stations and forest protection facilities as well as carry out exchanges of personnel and organize training programes in the next three years in order to enhance Africa’s capacity for tackling climate change and protecting forest.

8. Well-drilling and water supply projects will be aided in Africa. At present many African countries are still facing the severe challenge of water shortage and drinking water safety. About 300 million people live in Africa without enough water, and over 40% of residents in sub-Saharan Africa are short of clean drinking water. At the fourth Ministerial Conference of FOCAC held in 2009, China announced 100 assistance projects on clean energy, well-drilling and water supply in Africa. Progress has been made in the implementation of these projects. By far, China has carried out 46 well-drilling and water supply projects which played a positive role in helping African people mitigate the shortage of water. In the next three years, China will continue to implement well-drilling and water supply projects in Africa and enable access to clean and safe drinking water for more African people.

Priority Area III: China will support the African integration process and help Africa enhance capacity for overall development. China will establish a partnership with Africa on transnational and trans-regional infrastructural development, support related project planning and feasibility studies, and encourage capable Chinese businesses and financial institutions to take part in transnational and trans-regional infrastructural development in Africa. We will also help African countries upgrade customs and commodity inspection facilities to promote intra-regional trade facilitation.

Policy Reading:

1. We will engage in cooperation on transnational and trans-regional infrastructure projects. In recent years, as the economic integration process accelerates in Africa, the status of Africa as a whole has been rising in the global political and economic landscape. African countries are paying increasing attention to the fundamental role of transnational and trans-regional projects in economic development. The Chinese government has always been supportive of the joint efforts of the African Union and African countries towards greater strength. Our cooperation on building transnational and trans-regional infrastructure projects enjoys sound conditions and broad prospects. China will prioritize the demands of African countries or African regional organizations in building transnational and trans-regional projects based on project urgency and conditions available for project launch, and provide help on project planning, feasibility studies and engineering designs of certain key projects with mature conditions. We will also encourage capable Chinese companies and financial institutions to take part in project construction and explore new financing models with an aim to help Africa enhance capacity for overall development.

2. We will work to promote Africa’s intra-regional trade facilitation. Intra-regional trade is an important internal driver for Africa to achieve take-off as a whole, as well as a key factor in enabling sound and sustained economic growth in Africa. Intra-regional trade now takes up a relatively small share in Africa’s overall trade yet holds great potential. China is willing to provide necessary support, share our development experiences, and work together with African countries to cope with the impacts of changing trade situations outside the region as well as the financial crisis. In the coming three years, China will provide assistance to relevant African countries in the areas of customs clearance facilitation and commodity inspection equipment and carry out personnel training, so as to help African countries upgrade customs and commodity inspection facilities and improve their capacities in customs clearance management and commodity inspection and quarantine.

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