Hu Kaihong: Good morning, ladies and gentlemen. Welcome to the news briefing held by the State Council Information Office. The Johannesburg Summit and the Sixth Ministerial Conference of the Forum on China-Africa Cooperation ("FOCAC") will be convened soon, and President Xi Jinping will direct the summit. By 2015, the FOCAC has been established for 15 years. Fuelled by initiatives generated by all previous forums, China-Africa economic and trade relations have achieved great-leap-forward development and mutual-beneficial cooperation has taken a great step up. Today we are pleased to invite Mr. Qian Keming, the vice minister of the Ministry of Commerce, who will introduce some information on China-Africa economic and trade cooperation and answer your questions. First of all, Mr. Qian will give the presentations.
Qian Keming:Good morning, news and media friends at present! It’s my honor to have exchanges with you, and today I also want to extend my gratitude for your care of and support for the Ministry of Commerce, China-Africa economic and trade cooperation and the FOCAC. The FOCAC is the most significant platform for China and Africa to have collective conversations and pragmatic cooperation. The FOCAC has been established for 15 years. During the past 15 years, owing to great efforts from China and Africa, the FOCAC has become a prominent brand for solidarity and cooperation between China and Africa, as well as set a paradigm as to cooperation towards Africa worldwide. On the previous forums, China has proposed a series of measures to support development of Africa and enhance pragmatic cooperation with Africa, which play a significantly leading role in extension of China-Africa relations and receive high raises from countries in Africa. Hence, the design and implementation of measures are on the top priority of the forum and focus in the eyes of media both home and abroad.
Qian Keming:For a long time, economic and trade cooperation has taken a considerable place in the measures of forum. In the Fifth Ministerial Conference of the FOCAC held in 2012, China announced that peace and development of Africa would be underpinned and new-type China-African strategic partnership would be promoted through 5 key fields, with 3 ones involving economic and trade cooperation, namely expanding investing and financing cooperation, adding assistance towards Africa and supporting integrated construction of Africa. In the past three years, China and Africa has joined hands to fulfill comprehensive implementation of each economic and trade measure.
Qian Keming:Now I will give brief introductions to the aforesaid three fields.
Firstly, when it comes to investing and financing cooperation, China has over fulfilled the target to grant the loans of USD 20 billion to African countries, which were used to support the Africa to improve infrastructure, optimize investment environment, settle development problems and offer more assistance for development of small and middle-sized enterprises, agriculture and manufacturing in Africa.
Secondly, as for development assistance, China has attached great importance to supporting African countries to reduce poverty, improve people’s livelihood, and boost independent development abilities, bringing about 900 assisted projects in such key fields as poverty reduction, agriculture, health, education, trade promotion and climatic change and training over 30,000 talents in various areas for African countries, as well as carrying out the "Lighting" activity in 5 African countries.
Qian Keming:Thirdly, with respect to assisting Africa in integrated construction and cooperation, China has helped African countries and districts to organize and implement a batch of customs and commodity inspection facilities, and has proactively engaged in cooperation in cross-border and cross-regional infrastructure construction in Africa, as reflected in completion of a batch of major projects. Take the 760-km railway from Addis Ababa, the capital of Ethiopia, to Djibouti as an example.
As we all know, Ethiopia is an inland country without marine outfalls and ports. Upon completion, the passage from Ethiopia to the port can be constructed via access to Djibouti, which lays a solid foundation for Ethiopia to develop export-oriented economy in the next step. Currently, this railway is expected to be opened to traffic next year, but it has exerted positive effects before duly access. I just went back from there. As you may know, railway plays a very important role in transporting relief materials, since Ethiopia suffered from a drought these days. Both the president and ordinary people of Ethiopia think highly of this railway, and are very looking forward to the completion of works.
Qian Keming:In addition, the completion of 480-km railway from Nairobi, Kenya to Mombasa and expansion works of South Shore hydropower station in Kariba, Zimbabwe will strongly help African countries to improve development environment, promote market merging and constantly improve internal motives of economic development. The Ministry of Commerce of China and the African Union Commission have established a joint working group mechanism for cooperation in cross-border and cross-regional infrastructure construction in Africa. We believe that such system will play an active role in extending cooperation in such a field.
Qian Keming:Thanks to measures raised by each forum, Sino-African economic and trade relations and mutual-beneficial cooperation have achieved great progress. With expanding cooperation scale, China has been the first major trading partner of Africa for consecutive six years, with China-Africa trading volume reaching USD 222 billion in 2014, up by 20 times from the establishment of the forum. Africa is the second major contract engineering market and targeted area of Greenfield investment. Up till the end of 2014, China had direct investment in Africa amounting to USD 32.4 billion. The growth rate has exceeded 30% in the past 15 years. In the meantime, the structure of Sino-Africa economic and trade cooperation has been optimized, seeing growth points spring up in agriculture, manufacturing, finance, tourism, aviation, communication, broadcasting, health care and commercial logistics. Besides, cooperation model has also been innovated, reflecting the initial emergence of industrial agglomeration effect from bilateral and single aspect to district, integration and economic and trade cooperation area.
Qian Keming:My honored guests from news media, after discussions of China and Africa, the Johannesburg Summit and the Sixth Ministerial Conference of the FOCAC will be convened in South Africa in early December. This summit is the second one held after ten years when the Beijing Summit of the FOCAC was held, which will take place in African mainland for the first time and is bound to be an important milestone in the history of China-Africa economic and trade cooperation. Both China and Africa not only pay high heeds, but also are full of expectations.
The Ministry of Commerce and the Ministry of Foreign Affairs are double chairman units of China’s Follow-up Committee of the FOCAC. Under the structure of forum, the Ministry of Commerce takes the lead in designing and implementing new measures of pragmatic cooperation. During this summit, it will also sponsor the Conference of Chinese and African Entrepreneurs and the China Equipment Manufacturing Exposition, which act as main events of supporting activities of this summit. Currently, the preparation of such work is underway in order.
Qian Keming:We trust that the Johannesburg Summit will set a new start for China-Africa relations, and China-Africa economic and trade development is doomed to turn on a new leaf in the future. We will firmly seize such a golden opportunity to further deepen China-Africa pragmatic cooperation in the principle of win-win cooperation and joint development, for the sake of pushing forward China-Africa cooperation in wider range and at higher and deeper levels, which in turn will infuse a steady flow of growing power in economic development of both sides. Thank you for your listening.
Hu Kaihong:Thank you, Minister Qian. Now you (to the reporters) may ask some questions. Please notify the news agency you stand for before raising your questions.
Reporter from CCTV News Program Center: Minister Qian, as you said, “measures, design and implementation are on the top priority of the forum”, so could you please tell us what highlights of design in economic and trade measures may be seen in this Johannesburg Summit, and how will China-Africa cooperation move forward next?
Qian Keming:Thank you for your questions. For a long time, pragmatic measures has been playing a positioning, planning and directing role in China-Africa cooperation, which are also the focus and hot spots of each forum. When the forum has existed for 15 years, the Sixth Ministerial Conference is upgraded to be a summit, endowing the new measure proposal some particular historical significance and fresh historical connotation. We attach great importance to the design, spending nearly one year in preparation, deliberation and perfection again and again.
Under the structure of forum, the Ministry of Commerce is the leading department of new measure proposal. In the past year, we extensively seek opinions and suggestions from all circles of both China and Africa in various manners following the idea of “sincerity, pragmaticality, closeness and integrity” mentioned by President Xi Jinping as well as moral and profit, in the hope of completing the design of new measures from a long-term perspective and comprehensive dimension. I believe that, thanks to wisdom and ability of China and Africa, new measures will fully indicate new features and trends of China-Africa cooperation, closely match development strategies and cooperation visions of both sides, share experience and fruits of development and realize mutual benefit and win-win cooperation in a more extensive field and at higher level.
Qian Keming:New measures are able to help the Africa to blend into the global value chain soon so as to better achieve sustainable development. I can tell you that new measures will present the richest particulars with most intensity and most extensive coverage compared with the past forums. I wish that you can pay attention to the new measures. After issuing to the public, the Ministry of Commerce will also release specific policy interpretations without any delay. You may refer to our website for more information. Thanks.
Reporter from Phoenix Satellite Television:Minister Qian, China has been increasing assistance to Africa in the past few years since the foundation of the FOCAC. But the economy of domestic China is suffering from downward pressure this year. Under such background, will China continue to extend the assistance? If so, why will we insist? Thanks.
Qian Keming:As is known by us all, China is the largest developing country in the world. We persistently pursue the close combination of benefits of the people in China and other countries within our capacity. We proactively engage in the international cooperation under framework of South-South Cooperation. During the past 65 years, we have assisted African countries in building bridges, paving, digging wells, power supply, hospital construction, establishing schools, and cultivating talents in various fields. We also dispatched medical personnel to work in Africa for a long time. As we know, doctors from China made a great contribution to Africa fighting against Ebola. Yesterday, the central government cited a batch of heroes resisting Ebola, and CCTV also broadcasted. China has also made a positive contribution to reducing poverty, improving people’s livelihood, fighting against diseases and natural disasters. We do the best we can to provide such assistance, which indeed occupies limited proportion in GDP and never beyond the manageable level of a developing country.
Assistance is not one-sided, but mutual support among the nations and is an important way to realize joint development. When it comes to assistance, it refers to assistance provided by developed countries to undeveloped countries as well as mutual assistance among developing countries. In some cases, the latter makes more sense, because developing countries share alike experience and common developing stages, and they can have better understanding of what they need via mutual support and complementation based on various resource endowment and developing conditions.
Qian Keming:On the other hand, assistance for Africa is also favorable for China’s development. With a population of 1.15 billion people, Africa is a large market with rich resources and stronger awareness of independent development in urgent need of developing the economy. Thus, this kind of cooperation just coincides with the stages and needs of China’s development. Assistance is mutually beneficial. China will never forget that, after the occurrence of Wenchuan earthquakes in Sichuan, such African countries as Liberia, Guinea, Sierra Leone, and Equatorial Guinea endowed RMB 64 million to China while they were not rich indeed. That was valuable and provided extremely great support in the morality and justice of earthquake relief work of China. When disaster struck, help came from all sides. We truly cherish assistance from Africa. After Yushu earthquakes took place in Qinghai, the government of Congo donated RMB 16 million in a slump, and built a school in the disaster area. The assistance between China and Africa is mutual. We help each other and have extensive cooperation in economy, which can be deemed as the token of traditional friendship between China and Africa as well as the moral principles and responsibilities in the international aspect. Besides, such assistance can create benign international environment for development of both sides. In the future, China will continue to help African countries strengthen independent development abilities following the correct idea of mortality and justice for the purpose of providing the public in African countries with more benefits. Thanks.
Bloomberg News:Good morning, Minister Qian. In the introduction, you said that China had direct investment in Africa amounting to USD 32.4 billion. My question is that what’s the return on the financial statements of those investments? What’s the failure rate? And what do you think of the development of China’s economy in the next ten years and what will the vision be as for investment towards Africa?
Qian Keming:Thank you for your questions. Generally speaking, investment from China’s enterprises in Africa is running quite well. But we have to talk about this point by classifications, since some investments refer to construction of infrastructures in Africa, such as railways, highways, etc., which are mostly for free and without any economic returns. They are deemed as aid amount.
There are some enterprise-based investments for sure, seeing fair performance on the whole, but some also fail, which can be attributed to operating and management of enterprise investment on its own and the overall global environment. For example, minerals and petroleum are closely related to declines of global oil prices and bulk stock values, while such downticks are general. Investments by China and the US and Europe are confronted with the same problems.
Now we communicate with African countries, wishing to better play the subjective role of an enterprise, with direction by the government, decisions made and projects selected by enterprise on their own, so as to get better improvement in return of investment. Thanks.
Reporter from China Radio International (CRI): I have two questions. As indicated by you, the data of China-Africa economy and trade are not very optimistic, and we can even see obvious declines. In addition to the reasons you mentioned above, are there any other factors? Besides, in the future, will a new type of expansion appear with respect to structure and fields in economic and trade links? Now the economy and trade towards Africa is mainly focused on energy and infrastructures, will there be any new ideas next? Secondly, could you please tell us more about the Equipment Manufacturing Exposition to be held during the summit? Thanks.
Qian Keming:First of all, I will say something about the Equipment Manufacturing Exposition. It is an event especially planned for this summit. It is the first large-scale equipment exposition held in Africa by China and Africa, and high-quality equipment of China will appear together in Africa for the first time. We will select some representative enterprises in such fields as railway, aviation, electricity, communications, machinery and intelligent manufacturing to take part in the event according to actual needs of African countries. People in African countries are expected to have a better and comprehensive understanding of high-quality equipment of China at close range. Meanwhile, some featured and advantaged products of African countries will also be on the display. In a word, such exhibition is not only a stage for enterprises from China and Africa to show their charm, but also will become a platform for both parties to carry out capacity cooperation.
Qian Keming:Currently, China is conducting cooperation of international capacity and equipment manufacturing, while Africa is proactively promoting the process of industrialization. We can say that China and Africa have a bright future in connection of development stages and capacity cooperation. During the China-Africa Equipment Manufacturing Exposition, African enterprises can find equipment to meet their own needs as well as seek the like-minded investment partners. Under such background, capital and capacity of China can effectively match the demands of development in Africa. Made in Africa can be motivated by Made in China so as to push forward the industrialization of Africa.
For the second question, it is about trade. As we all know, China-Africa trade is also under great downtrend pressure amid mixed and severe global economic and financial situations, with relevant data indicating the downward movement compared with the previous year, mainly due to reduced import from Africa, which we believe would not last long and would be temporary.
According to necessary data analysis, we may easily find that the decline in imported volumes is largely affected by stage drops in global bulk commodity. After subdivision, we can see that import of such energy and resource products as crude oil and manganese, copper, cobalt ore, etc. and some characteristic agriculture products does not decrease. Despite reduced imported volumes, the total amount does not fall, and the drop in net amount is mainly attributed to prices. However, upticks can be seen in some prices, such as citrus imported from Egypt, wines imported from South Africa, coffee imported from Kenya and sisal hemp imported from Tanzania in Jan-Sep, achieving year-on-year increases of 309%, 84%, 30% and 22% respectively, which are relatively great. During the same period, China’s exported volumes to Africa move upward against the declines, reaching USD 80.9 billion, up by 5.8%. Thus, players in Africa mainly covered products of China to meet rigid demand, and can bear relatively great pressure and impacts on macro environment exerted by the outside economy.
Qian Keming:Looking forward, we are confident on the China-Africa trade. For one aspect, Africa shows favorable development trends. Just now I said that Africa is the second largest continent with a population of 1.15 billion people, with average growth of people at 2.65% annually, less than 3% before. Given such high growing speed, there exist immense demographic dividends and consumer demands. For another, Africa has good resources. China shows great demand in agriculture products of Africa. Thus, China-Africa trade development can receive stronger power in combination and promotion of technology, fund and capacity from China and population resource superiorities in the African market. China will continue to adjust and optimize the structure of China-Africa trade and pay heeds to further expand the import of non-resources products.
Qian Keming:Meanwhile, China-Africa trade also faces the issues of imbalance. Firstly, China exports more and Africa has trade deficits somewhat. Secondly, the structure is relatively single. We mainly import resources goods from Africa, such as energy and resources as well as some primary agricultural products. In the next step, we intend to pay attention to strike a balance in trade to import products from Africa as more as possible. On the one hand, we will hold special trade fairs for African products to enter into China market, which may provide convenience for enterprises from African countries to participate in the exhibitions in China. On the other hand, China’s further investment in Africa will not simply cover the trade, but will focus on transferring industry and manufacturing to Africa via investment, for purpose of deepening the implementation of capacity cooperation to help Africa realize the industrialization and diversification of economic structure. In such a way, China can export more and more products. In the short run, we plan to do something more in balance and structure of trades to realize more sustainable development. Thanks.
Reporter from China News Service:Minister Qian, we notice that African countries have been increasing inputs in industrial parks and economic and trade cooperation areas in the past few years, and many countries are learning from China’s experience. Could you please tell us what help China may help in this regard, and how to promote cooperation of both sides? Thanks.
Qian Keming:We all acknowledge that China indeed has successful experience in construction of economic and trade parks or industrial parks (including economic development zones). In the past 30 years, economic development zones and parks have been going on very quickly. A park has its own features. It can gather scare elements to give full play of scale merits, such as nearby production and mutual match of supporting enterprise, as well as cluster of talents, capital, and market and relatively high output of units, in case that capital (including supporting enterprise elements) is rare. China has some experience in this regard. In the last few years, we have achieved rapid development in cooperation of economic and trade parks (including industrial parks) in Africa. As far as I know, quite a few presidents from Africa paid a visit to economic and development zones of China (including industrial parks) and showed deep interest. Nowadays, Africa is lack of such elements as capital, technology and talents, and it wishes to refer to China’s experience to promote the development of industrial parks, with respect to gathering advantaged resources to advance the economic development within the limited scope of parks.
Qian Keming:The cooperation in economic and trade parks between China and Africa has developed very quickly. According to statistics, China’s enterprises have invested 20 economic and trade parks in Africa, attracting over 360 enterprises in total to enter into the parks, with extensive fields covering energy, mineral products, light industry, building materials, textiles, clothing, machine manufacturing, and household appliances, seeing accumulated investment amount up to USD 4.7 billion, total value approaching USD 13 billion, accumulated taxes paid to the host countries reaching USD 560 million, settling employment of 26,000 people. Hence, industrial cluster effects have taken an initial shape. For example, I just came back from the economic and trade cooperation zone in Suez, Egypt, in which Zhejiang Jushi Group invested USD 600 million to build up a world-class large glass fiber manufacturing base with capacity of 200,000 ton/year to fill up the blank in such industry.
Egypt did not produce glass fibers before, but now we set up a glass fiber manufacturing base with capacity of 200,000 ton/year there, which was very large in the world. In addition, I also paid a visit to the Oriental Industrial Park in Ethiopia, where Huajian Group from Dongguan has employed 3,000 local workers to produce local shoes. Huajian Group is a labor-intensive enterprise in Dongguan providing OEM and processing for some brands of the US and Europe. As we know, costs for labor-intensive industries are becoming higher and higher in China. But Ethiopia has rich labor force with salary of RMB 500-1,000 per month. After transferring labor-intensive industries to Ethiopia, employment of 3,000 people has been settled under the help of our enterprises, which has wined great response. During my visit, I saw 3,000-4,000 people manufacture in the workshop at the same time, and over 1,000 personnel have trainings nearby who also applied to be a member in the factory. A large number of young people were carefully studying there. I was very touched, as if I felt the vigor during the initial stage of the reform and opening-up in China. Besides, CNMC established the China economic and trade zone in Zambia to carry out comprehensive mining and processing of copper and cobalt, which significantly improves the added value of mineral products of Zambia. In the near future, China will continue to support African countries to develop industrial parks with efforts, expanding cooperation scale, improving cooperation quality, attracting outside investment and talents for industrialization of Africa and forging a new platform of China-Africa cooperation in capacity. Thanks.
Journalist from The Beijing News:I would like to raise a brief question in terms of the summit in our materials. We know that there will be the Conference of Chinese and African Entrepreneurs and the China Equipment Manufacturing Exposition during the summit. Can we know what enterprises will participate in the exposition and what trade orders may be signed? Meanwhile, our export structure has been adjusted all the time. During this summit, which changes on the industrial structure of participating enterprises may be deemed as the wind vane for China-Africa trade? Thanks.
Qian Keming:Thank you for your questions. I cannot disclose the participating enterprises to you now, as particulars are still under discussions and preparation. But those enterprises in the fields of railways, aviation, electricity, communications, machinery, intelligent manufacturing, etc. are very excellent and top ones in China, including the best railway company in China. The selection of enterprises and products should accord with the needs of development in African countries. We will not only display our fruits in the exposition, but also eye on seeking opportunities in cooperation in the future. Hence, those enterprises should be representative and advanced, and be able to satisfy the need of development in African countries. The African market does have some cooperation potentials.
When it comes to structure, we will promote several excellent industries and products for African countries to make choices. Most participating enterprises have investment and cooperation projects in Africa and are running smoothly. As far as I am concerned, projects invested by some enterprises including Huawei, ZTE, and China Railway Engineering Corporation are well known in Africa. For example, it’s very difficult for me to see the president, but the chief of the enterprise may see the president by making a call only. I can truly feel the popularity of managers there. That is not a simple personal relationship. Enterprises are accepted by the African people due to their assistance in development of Africa, so executives are very popular there and are well-connected. Thanks.
Reporter from Caijing Magazine: With the accelerated overseas investment of China, a series of risks enterprises face including security risks, investment risks and political risks also become a hot topic. Although there are some risk early warning platforms in our government and administrative institutions, they are not close enough to the public and not sensitive enough to first-line information.
Next, how to promote the folk force to set up some risk assessment and consulting agencies and establish a sound risk early warning system. In addition, a related issue is that China has made investment in Africa for many years, along with the misunderstanding and misreading of China's investment. How do we convey the concept of goodwill and win-win through folk penetration or people-to-people diplomacy, and form the mode that folk goes first and promotes government. Thank you.
Qian Keming:What you mention is a very good suggestion, rather than a problem. In fact, as for overseas investment risks, the Ministry of Commerce has taken many measures in conjunction with relevant departments. As we know, the recent hostage crisis in Mali also gives us a very big wake-up call. Actually, since 2010, the Ministry of Commerce has, in concert with relevant departments, successively formulated provisions on security management of overseas Chinese-funded enterprises and personnel and guidelines for security management of overseas Chinese-funded enterprises and personnel, as well as emergency response mechanisms and disposal procedures for security incidents in overseas investment cooperation, etc., with operability and in principle. An overseas security risk prevention mechanism with enterprises as subjects of security responsibility and with leadership and coordination of government departments and embassies and consulates in foreign countries is generally formed, and has successfully dealt with multiple overseas security emergencies Chinese enterprises encountered in recent years.
Qian Keming:The suggestion you have just put forward also reminds us how to give full play to the role of non-government institutions. Of course, enterprises come first. Now, some large enterprises are still main forces to "go out", so their own prevention awareness and mechanism are very important. At present, as far as I know, there are still few Chinese non-government security institutions in African countries, so it is estimated that their security protection abilities and systems are not quite perfect. I believe, in the future, this field will be a very big area of development, and has great potential for development.
Now, we are rethinking about giving a play to the role of non-government institutions that you have just said. For example, we have implemented a lot of good projects in Africa, such as power stations and airports, which are of very importance and long-term significance to economic development in Africa. And there are also some projects relieving poverty and directly benefiting the people, such as well drilling projects, hospitals and schools. We shall make more efforts in this field, so that local people can enjoy tangible benefits from aid projects.
In the meantime, we also need to build good relations with local and China's non-government institutions, and listen to their demands and feedback on construction projects. Africa is a treasure trove of biological resources. Non-government institutions may play a greater role in the future in terms of wildlife protection, environmental protection and other aspects. Thank you.
Reporter from International Business Daily:My question is about China-Africa investment. As you has just mentioned, China-Africa cooperation has leapt forward, now comes up against some pressures and challenges, but still has very large potential. For example, Huajian Group mentioned is a very important example of industrial transfer and "the Belt and Road" construction also brings greater opportunities for capacity cooperation. Next, what systematic and specific measures will the Ministry of Commerce take to promote China-Africa investment? For the second question, we are looking forward some new measures for China-Africa cooperation that will be taken at the upcoming Second Summit held in early December as you have said. Which aspects may more substantive cooperation be carried out in? Thank you.
Qian Keming:What measures we will take in the future is related to which fields we will invest in with more efforts. I answer the two questions together. As I have just introduced you, we have spent nearly a year listening to the opinions from all sectors of both parties, including ambassadors of African countries in China; we have conducted investigations and surveys in African countries, sent letters to economic and commercial counsellor’s offices therein for requesting them to fully understand local needs; meanwhile, we also have sought comments from relevant domestic authorities and enterprises on the fields in Africa for further cooperation they select on the basis of their practice.
After systematically sorting out the opinions of the suppliers and demanders, we, together with the Ministry of Foreign Affairs and the Ministry of Finance, have proposed a "package" of plans for China-Africa cooperation, which involve many fields. Here, I give you a general introduction. One is the industrialization of Africa, which is a top priority. Now, Africa countries have formulated the "2063 Agenda" which makes a very detailed planning for the industrialization and integration of Africa in the next stage, including a ten-year development plan somewhat similar to our development planning. We have made systematic studies on their agendas and development plans and planning, and try to help they resolve the problems such as single economic structure and low level of manufacturing development. Agricultural modernization is also the focus. We aim to helping to solve food security problems. The third one is investment in infrastructure. I will not describe them in detail one by one. Please be patient and wait for outward announcement by President Xi Jinping at the summit.
