China spreads the gains

Published: 01-FEB-03

As we went to press, the great and the good of the business world were gathering in Davos, Switzerland for the World Economic Summit. Besides the ongoing military build-up around Iraq, the main worry at Davos is the state of the global economy, with pundit after pundit trying to explain the dismal performances of the US and other prime economies.

For many of the commentators, it is hard to believe that China is the fastest growing economy in the world. But it is true. China's economy grew at 8 percent in 2002.

Primary industry grew 2.4 percent; the secondary industry, 9.6 percent; and the tertiary industry, 7.8 percent. According to the current exchange rate, China's GDP topped $1 trillion. Market prices have declined or stabilised. The general level of consumer prices up by 0.4 percent over the previous year is now on a downward trend.

The balance of international payments was favourable and the foreign exchange reserves continued to increase. The utilisation of foreign capital was stable and foreign direct investment went up to $40.7 billion, an increase of S400 mil- lion over the previous year.

The size of favourable balance of trade shrank, with the trade surplus of the year being $24.1 billion, a decrease of $5.1 billion from the previous year. Foreign exchange reserves grew continuously to reach $165.6 billion, an increase of over $ 10.9 billion at the beginning of the year. The overall economic efficiency index for industrial enterprises was 117.8 percent, up 16.1 percentage points, the highest level since 1992.

Continued economic growth has enhanced Beijing's competitive strength. And China is using its new strength to great advantage. As a developing country, China has carved an honest friendship and a solid base for working with Africa. As our cover story indicates, China has refused to recoil from Africa. In the last two years it has vigorously explored new channels for strengthening its markets on the continent.

In 2000, Chinese leaders Jiang Zemin, Li Peng, Zhu Rongji, Li Ruihuan and Hu Jintao visited Africa and many other developing nations, focussing on mutually beneficial commercial and other interests. These high level visits were quite successful, leading to the "China-Africa Cooperation Forum" in Beijing in October 2000.

The conference adopted the Beijing Declaration of the China-Africa Cooperation Forum and the Sino-African Co- operation Guideline for Economic and Social Development. It set forth an orientation for a new partnership of long-term stability, equality and mutual benefit between China and Africa. The conference served as a new starting point for an all-round advancement of Sino-Africa relations.

As the big chiefs of the World Economic Forum desperately seek economic solutions in Davos, it may be wise to look to Beijing for some obvious answers.

New relationships

Business in Africa Magazine has struck two unique partnerships in the last quarter. These have led to the introduction of brand new sections covering Information Technology and Motoring.

Brainstorm is South Africa's essential IT and business read. It features content that is credible, independent, valuable and hard-hitting. Business in Africa readers will now enjoy some of the best articles on the IT sector, courtesy of Brainstorm.

The late Norton Ramsay founded CAR Magazine in 1914. Its monthly editions are packed with the latest information on motoring. Our new motoring section will benefit from regular extracts from CAR Magazine for your reading pleasure.

Elsewhere in this edition, read about a new initiative by Nigerian firms to turn to gas energy following erratic supply of power by the state utility. The gas project is a combined effort by Shell Nigeria and the state owned gas company. (Page 34).

Since the military' uprising in Cote d'lvoire, many businesses are feeling the pressure of working in Abidjan, the capital. The African Development Bank headquartered in Abidjan since 1964 is said to be making plans to move to Dakar in Senegal.

Swaziland's participation in the General System of Preferences allowing its goods to enter the US market duty free has drawn foreign direct investment to the Kingdom.

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