Revisiting Tradition

　　As has become customary over the last two decades， Chinese foreign ministers’ first international visit inthe new calendar year is to Africa. In January 2014， ForeignMinister Wang Yi continued on this tradition. This marksthe first trip to the continent by the foreign minister sinceChina’s new administration took charge， indicating continuityin further strengthening and building on already wellestablisheddiplomatic and commercial ties between Beijingand African partner economies.

　　Undoubtedly， the continent remains a top priority in theforeign policy agenda of China. As the biggest buyer of oiland minerals from African countries and with interests indiverse sectors such as construction， manufacturing， agriculture，telecoms， and consumer and capital goods， Chinahas fast become the number one trade and top commercepartner of the continent.

　　This year’s visit focused on countries in the East and WestAfrican regions， including economies such as Ethiopia andGhana that， while not being the regional hubs of East andWest Africa respectively， have promising growth， industrializationand development prospects going forward andare fast improving their attractiveness to the internationalinvestor community.

　　Ethiopia

　　First on the itinerary was a stopover in Ethiopia. Addis Ababahas been a key recipient of Chinese FDI and infrastructurefinancing despite being a resource poor country. Ethiopiais also benefitting from the wave of Chinese-fundedspecial economic zones (SEZs) in Africa. The partiallyoperational Eastern Industrial Zone conceptualizedback in 2007， with investments in sectors such ascement and shoe-making， is however still far fromreaching its potential. An agreement between theChina Association of Development Zones (CADZ)and the Ministry of Industry and InformationTechnology to work together with the governmentof Ethiopia to further develop the SEZ wassigned during the visit. With GDP growth rates inexcess of 10 percent for eight years (2004-11)， ithas been recognized that structural transformationof Ethiopia’s economy will be key to steeringthe country onto a path of sustainable development， andfor Ethiopia to embark on a viable path toward employmentcreation. The zone could thus be a potentially importantcornerstone of economic diversification in the second mostpopulous economy in Africa.

　　Beyond the industrial park， China’s ongoing support toEthiopia was lauded as having contributed to the successfulimplementation of Ethiopia’s Growth and TransformationPlan (GTP)， which also includes various infrastructureinitiatives， such as the rollout of economically enablingpower infrastructure， road networks and railways. Ethiopiais looking to build about 2，000 km of railway lines as part ofits National Railway Program， and China has been involved insome of these projects， including the Ethio-Djibouti railwayproject and the Addis light railway project. During theFM’s visit， he also expressed interest to finance theMelkele-Asayita railway development project that willgive opportunity to develop the huge potash potentialin the region.

　　As mature， labor-intensive industries from Chinalook to move to relatively lower cost regions， emergingAfrican economies such as Ethiopia， but alsofavorable investment environments such asGhana， should use these opportunities to positionthemselves to attract investment into lightmanufacturing industries. The zones could bekey to unlocking Africa’s diversification potentialand value-addition based industries， beingpositioned to attract FDI through fiscal and otherincentives and generate foreign reserves from value-addedproducts. However， successes over the past years havebeen lagging， and an honest and critical examination ofwhat measures need to be taken in order for these initiativesnot to become white elephant projects is imperative.

　　Djibouti

　　Next on the itinerary was a stopover in Djibouti to markChina’s 35-year-long relationship with one of its smallertrade and investment partners in Africa. To celebrate thismilestone， China is committed to further assisting with theconstruction of ports and transportation projects. Beyondthe strategic military base role that Djibouti has played in theregion， China’s commitments look to promote the status ofDjibouti as a transport hub in East Africa. The two foreignministries also signed an agreement to exempt diplomaticpassport holders from acquiring visas to visit each other’scountries. There was also mutual agreement to supportlivelihood projects and expand cooperation in the defenseand security sectors. Djibouti has benefitted from China utilizingthe country as gateway for Chinese products into thelarger East African market， and has also received support insectors such as education， health and water. Following theminister’s visit later in January， a belated anniversary gift wasthe signing of a $16.5-million loan to spur health and educationcooperation. This includes plans to construct a hospitaland a primary school， and provide scholars with electroniclearning materials.

　　Ghana

　　Fom Djibouti Wang Yi flew across to Accra， Ghana. Regardedas a key gateway to West Africa’s economic boom， Ghana，which has the longest standing ties with China in Sub-Saharan Africa， has also fast become one of China’s closesteconomic partners. During his visit， the minister was met byPresident John Mahama to discuss quickening the pace ofrelease of the remaining components of the $3-billion ChinaDevelopment Bank loan. Together with another $9 billionloan from China EXIM Bank， China has invested close to $13billion toward infrastructural development in Ghana. Thebulk of this infrastructure (60 percent) is to be constructedby Chinese firms， utilizing imported Chinese materials andto an extent Chinese labor. However， the lack of backwardlinkages to local contractors and manufacturers both interms of opportunity and knowledge/skills transfers couldbe derailing the resource-driven industrialization efforts ofthe country. Less pleasant but an important concern withregards to the latter has been the ongoing issue of illegalgold mining of Chinese nationals in the region. As a sign ofcooperation and good measure between the two governmentsin dealing with the matter， an agreement was signedto ensure that the mining sector in Ghana is more standardized，orderly and sustainable. Chinese mining companies willbe encouraged to invest in Ghana and the Ghanaian Governmenthas committed to supporting these companies.

　　Senegal

　　With the minister’s last stop in Senegal， pledges weremade to assist Dakar with infrastructure construction andlivelihood improvements. China provided more than $100million to Senegal last year for agriculture， sports， culture，education and transportation programs. Some of theprojects supported by China that have begun constructionin Senegal include 11 regional stadiums， a children’s hospitalin Diamniadio and the Museum of Black History.

　　Although China’s engagement with Africa is here tocontinue under the new administration， ongoing symbolicvisits such as to the four countries mentioned， coupledwith China’s foreign commercial policy in Africa， shouldtake growing cognizance of the quality of the Sino-Africanrelationship.

　　Now going onto 14 years after the first FOCAC meeting，which embodied China’s new-found commitment to andgeostrategic importance of Africa， China has secured essentialeconomic and societal hubs to support and developits own nation， with Africa a key piece in this puzzle. Inseizing China’s engagement， African countries， although onaggregate having reaped wide-spanning direct and indirectbenefits from China through trade， price， investment andfinancing channels， and， most the construction of economicallyenabling infrastructure， need to strive to negotiatedeals that will help push their economies beyond simplemeasures such as GDP growth. Greater emphasis needsto be placed on building economies that are able to fosterthe development of a substantive and competitive privatesector， coupled with a policy environment and functioninginstitutions that can contribute to sharing economic gainsacross the grassroots.

　　Only then will this engagement， often touted as “winwin”for both sides， truly be so. Indeed， timing for suchchange could not be more opportune with the economictransformation and structural changes taking place in China，creating increased playing room for resource and industrialdiversification in Africa.

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