china-africa relations; the case of morocco the decolonization of africa ... visit of zhou en-lai to...
TRANSCRIPT
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China-Africa Relations; the case of MoroccoPRESENTED BY: KAOTAR ANKOURI
HOHAI UNIVERSITY BUSINESS SCHOOL
IntroductionAfrica and China have many centuries of collaboration.
In recent years, a dramatic increase in the level and the intensity of the relationship.
In early 90s, the relationship was dominated by official development assistance and government action.
Today, Chinese companies and joint ventures have replaced public bodies.
China now represents for Africa a donor, a market, a financier, an investor, and a contractor.
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ContentsHistory of the relationship between China and Africa
1. Early history 2. 15th to 20th century3. After the decolonization of Africa
Current state of the relationship between China and Africa1. Trade is growing, but exchanges are unbalanced2. Aspects other than Trade
The case of Morocco1. General information and Economic indicators 2. China-Morocco: win-win partnership3. From Cooperation to strategic partnership4. Great projects
Conclusion
History of the relationship between China and Africa
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The Chinese before the Europeans
Da Ming Hun Yi Tu -大明混一圖 Created in China circa 1390
Chinese coin minted 1403-1424 found in Kenya
A giraffe brought from Somalia to China circa 1415
Maritime trade as early as 202 BCand Zheng He’s exploration
Source: www.nitibhan.comSource: www.britannica.com
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A decline from the 15th to 20th centuryThe role of China supplanted by Arab, indo-Pakistani and Europeanimmigrants
The expansion of the Sultanate of Oman, who made Zanzibar its capital
Documented cases of Chinese migrants settling in the Islands and on the coasts of the Western Indian ocean, as workers from China to work in mines and plantations
Descendants of these Chinese migrants still live in Kenya, confirmed by a DNA test
Tribes north of Cape Town claim descent from Chinese sailors, their physical appearance is similar to Chinese with paler skin and a Mandarin sounding tonal language.
Revival after the decolonization of Africa1955: Bandung Conference, also known as Asian-Africa Conference
1956: 8th Congress of the Central Committee of the Communist Party formalized the Chinese policy towards Africa
A series of Afro-Asian conferences, all held in Africa: Cairo (1957), Accra (1958), Conakry (1960), Mogadishu (1963) and Winneba (1965)
1960: Sékou Touré (Guinea) the first African leader to officially visit the PRC
1964: visit of Zhou En-Lai to ten African countries: Algeria, Morocco, Sudan, Guinea, Ethiopia, Mali, Somalia, Ghana, Egypt, and Tunisia
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New cooperation in trade, military, and educationChina positioned itself as an anti-imperialist counterweight to the West.
China penetrated the territories left untouched by the United States and the Soviet Union
Participated in ambitious projects such as the construction of the railroad "Tanzam" linking Tanzania with Zambia
Entered into military cooperation agreements with countries of similar ideology in East Africa, including Ethiopia, Uganda, Tanzania, and Zambia
Opened its universities to African students
Current state of the relationship between China and Africa(1) TRADE IS GROWING, BUT EXCHANGES ARE UNBALANCED
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Bilateral trade is growing
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100,000
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600,000
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2008 2009 2010 2011 2012 2013 2014 2015
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坐标轴标题
African Exports and Imports to/from China and the world in million USD
Exports to China Imports from China Exports to world Imports from world
Sources: IMF, Direction of Trade Statistics; author's calculations
China is Africa's third-largest trading partner after the U.S. and the Euro Area
0%
10%
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2008 2009 2010 2011 2012 2013 2014 2015
Share of African Exports by destination, % of total exports
United States China,P.R.: Mainland Euro Area Other
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90%
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2008 2009 2010 2011 2012 2013 2014 2015
Share of African Imports by provenance, % of total imports
United States China,P.R.: Mainland Euro Area Other
Sources: IMF, Direction of Trade Statistics; author's calculations
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China's increasing share of African Exports
0%
5%
10%
15%
20%
25%
30%
35%
2008 2009 2010 2011 2012 2013 2014 2015
Major trading partners' share of African Exports, % of total exports
US share EU share China share
Sources: IMF, Direction of Trade Statistics; author's calculations
Unbalanced bilateral exchanges
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1%
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1,000,000
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2008 2009 2010 2011 2012 2013 2014 2015
Africa's share in Chinese Exports, % of total exports
China's imports other than from Africa China's imports from Africa
Africa's Share of Chinese imports
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2008 2009 2010 2011 2012 2013 2014 2015
Africa's share in Chinese imports, % of total exports
China's imports other than from Africa China's imports from Africa
Africa's Share of Chinese imports
Sources: IMF, Direction of Trade Statistics; author's calculations
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China has a large share in Africa's global trade deficits
-17,706
-7,130-11,426
-26,956
-59,820-63,619
-12,639
-54,404
-89,117
-160,806
-180,000
-160,000
-140,000
-120,000
-100,000
-80,000
-60,000
-40,000
-20,000
0
20,000
40,000
2008 2009 2010 2011 2012 2013 2014 2015
Trade balance Africa-China and Africa-World, in million USD
Balance-China Balance-world
Sources: IMF, Direction of Trade Statistics; author's calculations
21% 30% 37%56%28%
Current state of the relationship between China and Africa(2) ASPECTS OTHER THAN TRADE
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AidBeginning of 1990s – Aid is 20% of exchanges
2004/2005 – Aid is 3-4% of exchanges
⚠ Almost impossible to quantify exactly how much aid flows from China to Africa
Estimation by Strange et al. : 2000-2011 USD 75 billion (one fifth of flows from OECD, almost equal to USA)
Sovereign debt Debt relief:
2000-02: cancelled up to 10.5 billion yuan in debt backlogs.
2006: cancelled 10 billion yuan of debt for 33 African countries that are heavily indebted, underdeveloped, and have diplomatic relations with China.
Due to lack of data, difficult to understand the terms of debt relief and compare them to terms offered by the IMF and the World Bank joint debt relief program for Heavily Indebted Poor Countries
Many question the motivation behind the debt relief, and China’s willingness to accord debt to countries that cannot repay
Usually, harsh terms are enforced once the borrowers are unable to repay in time, including: Giving China exclusive rights to a nation’s resources
Access to markets and investment opportunities
Especially in the infrastructure sector: roads, power plants, pipelines, telecommunications
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Private debt and Foreign Direct InvestmentTrade credits are an important part of the financial flows from China to Africa
Several state-owned banks have support China’s presence in Africa:China Development Bank (CDB), loans to Chinese firms + China-Africa
Development Fund to support Chinese FDI in Africa. Exim Bank (China Export-Import Bank): promotes Chinese exports and foreign
direct investment (FDI)
⚠ Still no detailed information available
In general, Chinese lenders favor infrastructure projects in Africa
FDI flows both ways, as African FDI to China has also significantly increased in recent years
The case of Morocco
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Location
Population: 33,503,000 (39th) Population: 1,373,490,000 (1st)
General information
MOROCCO
Capital: Rabat
Form of state: Constitutional Monarchy
Head of state: King Mohammed VI
Head of government: PM AbdelilahBenkirane
Currency: Moroccan dirham◦ (1 EUR=10.8165 MAD)
CHINA
Capital: Beijing
Form of state: Communist State
Head of state: G.S. and President Xi Jinping
Head of government: Premier Li Keqiang
Currency: Chinese yuan ◦ (1 EUR=7.3963 CNY)
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Economic indicatorsMorocco China
GDP per capita 3196 (Dec.16) 6894 USD (Dec.16)
GDP growth rate 4.2% (Jun.17) 1.7% (Sep.17)
Government Debt to GDP
64.7 % (Dec. 16) 46.2 % (Dec. 16)
Inflation rate 0.6 % (Oct. 17) 1.9 % (Oct. 17)
Interest rate 2.25 % (Oct.17) 4.35 % (Oct.17)
GDP breakdown by sector-2016
14%
29%57%
Sector, % GDP
Agriculture
Industry
Services
Constructed from The World Factbook figures - www.cia.gov
MOROCCO CHINA
8%
40%52%
Sector, % GDP
Agriculture
Industry
Services
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Trade structure of Morocco
China-Morocco: win-win partnershipMorocco is a strategic access point to French-speaking Africa
Strategic location with access to sea and ocean
4th destination of FDI in Africa
1st destination of FDI in North Africa
1st African investor in French-speaking Africa (Banking and financial institutions, telecommunications, construction…)
China is Morocco’s 4th commercial partner (after France, Spain and USA)
Attracting Chinese investments
400 billion to be invested in Africa by 2020, announced by President Li Keqiang during last visit
Penetrating the Chinese market
Largest consumer market in the world
High disposable income, Chinese tourists biggest spenders (#1 WW)
Morocco #1 tourist destination in Africa
Infrastructures of MoroccoSource: Agence Nationale de Promotion des Investissements
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From cooperation to strategic partnershipMay 2016: King of Morocco visits China
Strategic partnership agreement signed in Beijing
Larger cooperation in many areas: oil and mining,
agriculture,
environmental protection,
fisheries,
infrastructure building,
digital communication,
renewable energies,
industry, metallurgy and electronics
Great projectsJuly 2017: Agreement signed between:
China Railway Construction,
BMCE Bank of Africa (Moroccan bank)
Construction Travaux Généraux de Casablanca (leader in construction in Morocco)
Tallest sky scraper in Africa, 250 m high with ecological concept
Other plans for Grand Théâtre de Rabat, the House of Arts and Culture, the national Archives of the Kingdom of Morocco and an archaeological museum.
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Great projectsMarch 2017: Convention with Haite group to build “CitéMohammed VI Tanger Tech”
New industrial city of 2000 hectares
To host 200 Chinese companies operating in automotive construction, aeronautical, textile industries
Estimated budget: 10 USD Billion
Create 100 000 jobs (90% local)
Duration: 10 yearsKing Mohammed VI (c) and Li Biao, president of the Chinese group Haite, in front of the model of
an "industrial city", on March 20, 2017 at the Royal Palace near Tanger
ConclusionFINAL WORD: HOW CAN AFRICA BENEFIT FROM THIS GROWING RELATIONSHIP
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How can Africa benefit from this growing relationshipReducing investment and business costs: creating a better business climate in order to attract more capital
Insuring fair competition: increasing the transparency of all state-sponsored transactions to promote the good governance of Africa’s valuable resources
Preventing the accumulation of debt: balancing the need of funding vs. limited production capacity to absorb it
Preserving natural resources: careful planning and regulatory control of natural resources that are abundant but mostly non-renewable (learn from China’s mistakes)
Advancing within the value chain: evolving from the simple export of raw materials to their transformation (learn from China’s experience)
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Les Chinois en Afrique avant les Européens ? - Afrik.com : l’actualité de l’Afrique noire et du Maghreb. Available at: http://www.afrik.com/article21058.html. (Accessed: 14th November 2017)
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Wang, J.-Y. What Drives China’s Growing Role in Africa? IMF Work. Pap. 7, 1 (2007).
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