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China names envoy to Comesa in race for Africa trade

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China is active in infrastructure development in East Africa, but has since branched into other key economic drivers. File

China has formalised diplomatic ties with Africa’s largest market bloc as it builds trade and investment ties with the region.

The fast rising Asian economy has appointed Mr Zhaou Yuxiao its envoy to the Common Market for Eastern and Southern Africa (Comesa), boosting relations with the 19-member bloc.
Mr Zhaou will double up as the envoy to Zambia which hosts the head office of Comesa that also wants to merge with the East African Community (EAC) and the Southern Africa Development Community (Sadc).

The targeted grand market comprising 26 countries would bring together 525 million people and $1 trillion in output. China already has diplomatic ties with the EAC following the appointment of Mr Liu Xinsheng as its envoy to the market bloc’s secretariat in Arusha. Mr Liu doubles up as its envoy to the United Republic of Tanzania.

Comesa secretary- general Sindiso Ngwenya said ties between China and the market bloc yielded huge growth in terms of trade and investment volumes. “Between the year 2002 and 2008, total exports from Comesa countries to China increased from $ 831.7 million to $12.2 billion, while Comesa imports from China during the same period increased from $1.8 billion to $12.4 billion” the official said.
China is engaged in fierce competition with other leading global economies such as the US for Africa’s raw materials and minerals to support its fast rising economy back at home.

The Asian nation has taken Africa by storm through lucrative deals, beating rivals such as India and Brazil that are popular among developing peers.

Analysts attribute China’s success to cheap finance especially offered to state-backed companies eyeing businesses abroad. This has enabled such companies to compete for huge foreign asset bids, beating rivals from other countries mainly in the West that face more expensive funding options.

“Chinese state-backed firms with access to cheap government export finance can easily trump the likes of Vale, who have to pay commercial, and thus more expensive rates, for finance,” Reuters quoted Markus Weimer of London’s Chatham House think-tank as saying.

“State subsidies for national companies will continue to be watched with scornful eyes by Western governments, and increasingly by other emerging powers such as Brazil and India”

Africa has also proved a perfect match for China because consumers in poor countries prefer the more affordable goods and equipment from there. The country is particularly active in the construction and infrastructure development sector in East Africa and has since branched into other key economic drivers such as manufacturing.

The US, China’s major global rival, strives to win over economies in Africa through the special African Growth and Opportunity Act (Agoa) pact that was mooted to supplement then existing US trade arrangements with developing nations and sought to expand duty-free benefits that were previously only available under the Generalised System of Preferences (GSP).

Several Africa products, notably textile and agricultural produce are big beneficiaries of this arrangement in which import duty is lifted on all eligible African products and preferential market access granted upon compliance with set Rules of Origin (ROO).

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