Trade and investment flows between China and Africa will gain momentum this year as President Xi Jinping visits several nations on the continent during his first overseas trip, Standard Chartered Plc said.
Xi, who took over from Hu Jintao last week, will visit Russia, Tanzania, South Africa and Congo from March 22 to March 30, according to the official Xinhua News Agency. Rising Chinese investments in Africa will continue, Stephen Priestley, the bank’s head of origination and client coverage for the continent, said in an interview in Beijing yesterday.
Trade between China and Africa may have risen to a record last year after growing 20 percent to 163.9 billion yuan ($26.4 billion) through October, according to China’s Ministry of Commerce. Forecasts of a more stable economic environment will help drive trade and investment, Priestley said.
“There are fewer disruptions within Africa than there were in the last year and the year before,” he said. “We just saw an election in Kenya, we just had an election in Ghana and there was a transfer of power and there’s no disruption to the economy. It’s a stable growth pattern.”
Standard Chartered, with operations in 16 African countries, plans to invest $100 million over the next three years, opening 110 branches on the continent and recruiting 950 consumer-banking staff. Revenue from Africa made up more than 8 percent of income last year, according to the London-based bank.
Chinese investment in Africa totaled almost $20 billion at the end of last year, creating jobs, tax revenue and training for local residents, Shen Danyang, spokesman for China’s commerce ministry, said at a briefing in Beijing today.
“China has built substantial goodwill in Africa over the years,” said Standard Chartered’s Priestley. “It now needs to make sure it balances that, making sure that certain companies ensure there are skills transfered and that they don’t replace the labor in these countries.”
Nigeria’s central bank governor Lamido Sanusi warned in a Financial Times article earlier this month that Africa must shake off its romantic view of China and accept that it is a competitor as much as a partner and that it’s capable of exploitation as much as Western nations.
“China is a major contributor to the deindustrialization of Africa and thus African underdevelopment,” Sanusi wrote.
— With assistance by Aipeng Soo