Saturday, October 11, 2008

Beijing says global crisis risks China-Africa trade

The global financial crisis will hit trade between China and Africa, but Beijing will keep expanding its investment in the continent to maintain strong ties, senior officials said on Thursday.

Sino-African trade reached $74-billion in the first eight months, up 62% from a year earlier.

"We cannot be very optimistic about sustaining such growth," said Zhou Yabin, head of the Africa department at the Ministry of Commerce.

"The current bad financial conditions globally will affect our cooperation with Africa, especially in trade," Zhou said at a briefing for reporters and African officials.

China would encourage domestic firms to increase their investment in Africa in sectors such as infrastructure, financial services and energy, said Chen Lin, head of the ministry's department of foreign economic cooperation.

Zhou said the $1-billion China Africa Development Fund, which Beijing launched in 2006 to spur investment in Africa, had already put a tenth of its money to work in six projects, catalysing an additional $400-million from other Chinese investors.

Analysts expect the international financial crisis to weaken Africa's links with the West and drive it towards other emerging markets, especially China.

Zhou fended off critics of China's engagement in Africa. The country would not be a new colonialist, he said, adding that most of Africa's heavy industry was still in the hands of western multinational firms.

"If you look at history, it's not China but the Western powers that looted Africa," he said. "China came with a clear record."

China was training skilled workers for Africa and building hospitals and schools across the continent, Zhou said. "We have proved to be a trustworthy friend of Africa," he said.