Dealing with China: African countries must model a regional approach - Andani
2009-10-14 17:02:02This article has been read 941 times.
The Managing Director of Stanbic Bank Ghana has asked African countries to model a regional approach in their dealings with China in order to get proper dealings and returns from the relationships.
Alhassan Andani said China presents such a huge opportunity for African countries to exploit to develop their respective countries. Mr. Andani however cautioned that dealing with China on bilateral basis might not be the most ideal way of advancing the larger interest of the individual countries.
Speaking at the just ended Second Business Roundtable with the Government of Ghana organized by the Economist Intelligence Unit, Mr. Andani said China provides developing nations, especially in Africa, with exciting options. These options, he observed are of the kind that are best utilized when African countries deal with China collectively as regional economic blocs.
The Managing Director of Stanbic bank pointed out that China had already exceeded its stated investment outflows into Africa but the relationship so far has been at the bilateral level and judging from the extent of influence and resources available, these African countries could have gained much more from these deals.
“Bilateral relationships give China an upper hand in trade discussions. African countries need to deal with China on regional basis through ECOWAS, SADEC and the like, since consensus will reduce opportunities for China to leverage divisions and gaps among African countries”, Mr. Andani charged.
Mr. Andani was a member of a panel which discussed the topic “China’s special relationship: emerging market investment into Ghana”. The panel assessed the nature of Chinese investments into Ghana; whether Ghanaian businesses were benefiting from Chinese money; and whether government should play a more active role in protecting local industries.
Mr. Andani traced the investment intentions of China into Africa from 2006 saying “As China’s broader globalisation of its economy increases so too does its expansion and investment in Africa. Development of closer ties with Africa is seen by China’s leaders as being integral to China’s overall policy of promoting overseas investment.
While China needs Africa commodities to support its industrial development, trade is two way as China recognises Africa as a key future export market”.
He said as at 2008, China had exceeded its target of a 100 billion US Dollars bilateral trade with African states by the year 2010 even though it was considered audacious when China’s President Hu Jintao announced it in 2006.
He said the bulk of the investment had gone into infrastructure provision, oil and gas sector, mining among others.
“The Chinese Government’s motivation for prioritizing its relationship with African countries is driven by the same factors as those driving the overall ‘Go Global’ policy”, Mr. Andani said.
These factors include the fact that Africa holds a third of the world’s strategic commodity reserves; provides a “Market for ‘Made in China’ goods with a customer base of about one billion which makes it China’s third largest trading partner; provides a Market for Developing Overseas Services Expertise and Maintaining Political Relationships”.
But stakeholders and economic analysts believe that Africa is not getting a good deal from China and that China has ignored the real needs of Africa and is exploiting the system. Many have described the relationship as one that has turned Ghana and the rest of Africa has dumping grounds for cheap Chinese commodities.
Mr. Andani said China presents various options and Africans or Ghanaians for that matter have choices in their engagement with China.
“China has about five grades of the same product at different quality levels. It is really a question of affordability rather than that availability. China meets you at your point of need as such it is entirely up to the nation to select the technology based on what you are able to pay”.
That is why there is the urgent need to deal with China on a regional basis rather than on bilateral levels to prevent a second plundering of the African continent.
“We must go to China with long term plans rather than short term, three to five years deficit financing. The Chinese have a long term agenda and if we don’t match this, we stand the risk of realizing that we were served raw deals thirty years down the line. Andani added.
Panellists at the round table included government officials, international trade organisations and businesses as well as other European and American trade partners.
Minster of Trade and Industry, Hannah Tetteh earlier in her submission said the government recognised the contribution of China to the development of the country but has so far been careful in dealing with the Chinese until the necessary frame works that will protect Ghana’s interest were better developed.