FOCAC Summit milestone in Sino-Africa relations

C OORDINATORS of projects being undertaken in various African countries under the Forum for China Africa Cooperation (FOCAC) held a review meeting in Beijing last year.

The coordinators were taken for a tour of Suzhou Industrial Park in Jiangsu Province.

During the tour, Chinese director general of the Department of African Affairs, Mr Lin Songtian, sat down with African journalists to explain the direction cooperation between China and Africa is taking. Below is his address.

We are very happy to see that more than 30 countries from the continent have established coordinating committees chaired by very senior officials like a minister or prime minister or in some countries chaired by a president.

It seems to us that the African continent is paying high attention to the implementation of the outcome of the (Focac) summit.

But not every country is like this, we still have 20 countries not ready.

It seems to us some countries have gone far, but some countries do not know how to communicate with their Chinese counterparts.

At least 104 ministers were in Beijing, they came here to know, they came here to dialogue, they came here to discuss with China. It’s hard for us as organisers to close the door because our friends are very determined.

This meeting (the Focac review), together with this visit (to Suzhou Industrial Park) is very productive.

We came here to discuss how to cooperate, how to benefit from this package and from the outcome of the (Focac) summit.

We are very proud, we are very encouraged that in such a short time like six months, the agreements already signed are more than 250 and the total value of the agreements is more than $50 billion.

You can imagine now the speed of the cooperation between China and African countries has escalated.

This is why I like the key word we have to remember — the cooperation between China and African countries has been changed, the engine to drive the cooperation between China and Africa has been changed.

It’s hard if the people cannot catch the train, the train will not wait for you.

Before this summit, this coordinators’ meeting, the African friends would come to China for an additional government grant.

But this time they are not coming here to cry for an additional grant because the limit on the resources from a grant cannot meet the demand. It’s impossible because the infrastructure development cannot depend on the grant adjustment.

Tazara (the 1 860-kilometre long railway line linking Tanzania and Zambia built by the Chinese in the 1960s) is okay, but there is only one like that.

Now, everybody likes to get Tazara, but every country cannot own Tazara, it’s very costly.

If nowadays we want to build such a long Tazara, we need more than $10 billion on that one, so it’s impossible.

The key player in this cooperation between China and Africa also has been changed. Now it’s no longer the government. The government does create the environment and open the door for firms to go there (Africa) to find opportunities to cooperate. Now, of that $50 billion, 91 percent is direct investment and commercial loans from the bank.

It’s money from the bank, it’s a concessional loan and you need a loan procedure.

Now, if you go to the market, you have to ensure this project is profitable and sustainable and will bring the money to pay back. The bank will give you the money. It’s a commercial loan, so who is the key player? — the financial institution and the private sector are the key players.

Direct investment is more important than the additional grant. Additional grant is just for small projects, it’s only important to train your personnel.

Every year we have 300 to 400 workshops here in China welcoming a lot of friends from Africa.

My President (Xi Jinping) promised to train more than 100 000 personnel from your countries in the next three years and offer 30 000 scholarships.

It’s hard for you to pay for infrastructure development using the grant because that will be very costly.

You get the money from the bank, so the project has to be productive, it should be profitable, it should be sustainable, that is very key. The idea is that the structure of the cooperation between China and Africa has been changed.

The driving force is now from the private sector and the financial institutions.

So, this is why this time as government we build the platform for the ministry to dialogue, know each other, to share ideas, but we also have to dialogue with some people from the financial institutions, dialogue with coordinators of projects from African countries.

As you know at this moment the world economy is very poor, but I am very proud that the win-win cooperation and the mutually beneficial cooperation between China and African countries is promising.

I am very proud to say the Johannesburg (Focac) summit is very important and is a landmark or is a milestone in relations between China and African countries. At least 10 major cooperation plans led by two very important things — industrialisation and agriculture modernisation — were announced.

Whoever wants to develop their industries and agriculture have to pay high attention to infrastructure development.

This time there is a new consensus reached by the two sides, China and the African countries — the ministries — on how China and African countries can cooperate by the principle of the new concept of common development.

This cooperation will have to benefit the two sides.

If it just benefits China, the African people will not agree, if it benefits the African people only, it cannot be sustainable, the private sector will not go there — they go there to benefit.

We need the vision, we need the plan, we need their know-how, we need their financial input, we need their technical input, we have no money what can we do? — we open the market.

Let them come and make a profit, not give us a grant, this is the way China developed. So you open the door — business is business.

Some (countries) did not want their technical entrepreneurs to come to China because they did not want to see a strong China, but you see, business is business.

When they see that the profit is here, when they see the market is here, the money is here, no one can deny them.

We give them the land free, we give them the taxis free, we give them subsidies because who ever came, helped us to earn the foreign reserves.

So, we give them subsidy to encourage them to export more so that we have the foreign reserves. But if the people do not understand the market economy they will not be happy — this is my country, how can I give them money? they will say.

Whoever came here had to train local people to work for them because the cost of production in their countries is very high, including the labour cost.

This (Focac review) summit is a milestone in this relationship on the industrialisation and agriculture modernisation of the African continent, which will be driven by the new engine.