The Forum for China-Africa Cooperation, Johannesburg 2015

December 23, 2015 OPINION/NEWS

By

Adel Soualah

The relationship between China and Algeria, and to the point of no return … The Johannesburg conference carries the shadow of the great images of China to development projects between the two countries extending up to 2025.

After the Algerian Prime Minister’s comments on the China-Africa cooperation in the development path of the Johannesburg Conference, and that the Algerian government is looking to implement a presidential developed important program for the period 2014-2019, confirms the Chinese and African economic activities in that “it will find support and facilities in Algeria as the party is convinced of the importance of South-South cooperation and its prospects,”it was stated in a speech at a meeting of heads of State and Government Forum for cooperation between China and Africa (FOCAC).

Referring to the fifteen years of the organization and the partnership between Africa and China the Prime Minister Abdelmalek Sellal noted that trade volume had multiplied by twenty since 2000.

He also noted that Africa’s economy can gradually regain the path of growth thanks to the “bold reforms” and “provision, which has been renovated, inspired by the vision and philosophy of NEPAD.”

Moreover, he said that Africa is today one of the few growth areas in the world, diversifying and sustaining this economic growth, he continued, and the policy framework provided by the work of the 2063 African Union agenda and the ten-year implementation 2016-2025 plan, including a program for the development of infrastructure in Africa (PIDA) and the Programme of Comprehensive Africa Agriculture Development (NEPAD).

However, he said that if the development of trade flows between Africa and China was the target set as part of their cooperation, the two regions are currently on the brink of a qualitatively new stage that will ensure that trade can be an engine of growth through the promotion of investment and technology transfer and exchange of knowledge and know-how.

In this regard, the Prime Minister stressed that Algeria is pleased to see the approach contained in the draft Declaration and the Johannesburg Plan of Action, which the country is fully committed to.

On the eve of the action plan’s launch, he urged the Chinese and African economic actors in various industries to seize the commercial opportunities offered by the Forum.

 

The relationship between Algeria and China

Active in the Algerian market, are forty two large Chinese companies seeking to expand their activities in the African market, especially in the field of construction, roads, the telecommunications sector, energy, transport and even the irrigation sector. It should be noted that the Algerian-Chinese economic relations was launched in 1979 and the two countries signed up to in 2013 a number of agreements, the financial value of which is more than USD 20 billion.

Experts believe that what distinguishes China from Western countries is the perception of risk, the West is moving away from high- risk investments, unlike China which is geared to hope for big profits in the long term. China is investing more in the big opportunities economies, also considered by experts that the Chinese Foreign investment in Africa is very linked to politics because China wants from Africa and others to vote with them on the issues they consider too sensitive.

In terms of economic relations between the two countries, known as a real impetus to the beginning of the year 2000 for the establishment of a “general strategic partnership” after about 10 years, the latest statistics , according to France has lost its status as the first economic trader with Algeria to China in 2013. This position is retained by China through triangular, the first of the current year, as revealed by the Algerian customs in the final outcome, reaching the value of China’s exports to Algeria $ 1.87 billion during the first three months of 2014 , followed by France with $ 1.67 billion.

Algeria is also the first trade partner of China in the region and the largest export market in the Arab Maghreb, which is dominated by commercial exchanges between the two countries, with more than 40 percent of China transactions in the basin of the Maghreb, which has nearly $21 billion, while the value of investments amounted to $14 billion in a matter of eight years.

As revealed by the Chinese agency ‘Xinhua‘, the Chinese national companies in Algeria invested more than $20 billion in several sectors especially in construction and public works, and according to the achievement of the US Office ‘Think Tank’, investment by Chinese companies reached in Algeria (between 2005 and 2015) about $17 billion, making Algeria the second market for Chinese construction companies in Africa after Nigeria and one of the fifteen most important partners across the world.

According to the same investigation, the construction sectors that capture the interest of Chinese companies in recent years are winning the highway project ‘East-West’, the new headquarters of the Ministry of Foreign Affairs, housing projects and the Great Mosque in the capital. It gives a face to the future of Chinese-Algerian cooperation.

 

Neighboring countries aspire to turn the compass to the Asian giant

For its part, Morocco aspires to transform the compass to the Asian giant. According to the transfer site ‘Culture’, Morocco is important and will suffice, as political analyst specializing in the Sahara issue Maghreb Abdel Fattah Alvathi, states that Morocco has the potential to qualify for that, he said, adding “reasons: the first is reflected in the geopolitical changes bound to occur in the nature and quality of international relations by the Economic selected did not matter in a unipolar world, and the second reason is that Algeria did not have with China the traditional political alliance in the prosperity of socialist time, in addition to some local investments China carried out in Algeria, and the administration of housing projects and building roads.

 

Chinese partner holds the position of France and the European Union in the Algerian market

I know the last ten years, up to the rapid sharing of Chinese companies in Algeria, has come to the point of becoming a source of serious concern for the European partners, led by the French. The last statistical estimates, according to the number of Chinese companies active in Algeria is approximately 600. China expanded its network presence in the commercial field in Algeria, with the presence of nearly 4,000 active dealers in Algeria, in addition to more than 30 thousand workers. These contribute to the Chinese presence intensity in Algeria in ensuring the considerable positioning and the taking of Chinese companies for many projects in the building and public works, but also in information and communication technologies and the field of hydrocarbons, where China has established the first private company in Algeria in the Adrar area refinery together with the China National Petroleum Corporation.

The company’s ability to convert amounted to 600 thousand tons per year, providing the southern regions of petroleum materials. It proceeded the largest Chinese companies to accelerate the opening representative offices and branches in Algeria, along the lines of the China National Petroleum Company and Group of China Petroleum Engineering and Construction Company ‘Sinibak’, one of the most important Chinese active in the hydrocarbon sector companies, as well as the company ‘CITIC.CNN.Ore.C’ in charge of splitting the completion of the East-West highway and the Chinese company for the completion of the railway and the Group of the Chinese iron and steel giants Huawei and increased T or Almt_khasstan in communications.

China has embarked on a campaign to ensure its place in the Algerian market, by encouraging investment and not only on the dimension of a Trade, but for the exchange also for Chinese companies to task decades of achievement where 50 institutions with a total value exceeding $20 billion, concentrated particularly in the building and public works contracts. With the beginning of year 2000 198 Algerian companies signed a contract with China worth $9.1 billion, and with the end of the year 2000 the value of contracts signed between Algeria has become the top Chinese institutions in Africa and the fifth in the world, making Algeria the most important source of contracts for China in Africa and one of the most important areas of rising Chinese labor activity with the initiation of new base facilities projects, including the Grand Mosque and Palace of the conference, but also the development of Zrzaatin oil field into Amenas and several railway projects worth more than two billion dollars, of which the lines between the internal states of Algeria and growth continues to grow until the year 2015.

 

Experts reckon the growth of the Chinese in dealing with European counterparts

Algerian experts confirmed that France lost during 2013 alone its status as the first supplier to Algeria in favor of China, and in presenting the results of the analysis on the French-Algerian economic relations during a meeting on foreign investment in Algeria, considered by one expert as “is not inevitable,” He explained during the forum organized in Paris by the Legal Committee of the Paris-Algiers and the Assembly of the Euro-Maghreb lawyers business law that French dealers invest jointly to be uncompetitive in all, the Middle East, Latin America and Africa.

Based on the balance of trade related numbers that show the growing rise of imports, experts stressed that many products and services can be secured in Algeria by Algerian-French institutions through several markets in the region in addition to the domestic market. There are many sectors in Algeria that could make the country a real industrial ground for foreign investors who wish to be concentrated in Algeria in order to make choices in the economy.

The former French Director of consulting office in Telecommunications “Cosmic” stated that 14 branches is of priority in the industrial Algerian sector in addition to the status of other sectors, especially agriculture and finance, insurance, tourism, transportation, construction and configuration. Also provided was practical information about major projects planned for the five-year 2010-2014, especially new industrial zones and the 49 road scheme and ports and rail and tram and barracks schemes, hospitals. The ‘Gerha.kma’ scheme was under way for the year as well as important events and the exchange of large commercial support for all previous programs giving a new look to cooperation with China, and based on the data presented during the Forum, Algeria imported 8.54 billion dollars during 2013, which represents an increase of 9 percent compared to the previous year, including 6.82 billion from China and 6.25 billion from France.

Prime Minister Abdelmalek Sellal summarized Algeria’s implementation of important programs for the period 2014-2019, in which he assured Chinese and African economic activities “they will find support and facilities in Algeria convinced by the importance of South-South cooperation and its prospects,” stated in a speech at a meeting of Heads of State and Government Forum for cooperation between China and Africa (FOCAC). This is something that is expected of the relationship between Algeria and China up to a point of no return, and this is what the deepening of cooperation that will touch important sectors of development projects is likely to carry Algeria to a new level.

Especially given that Algeria suffers from OPEC decisions, and the production and preservation of oil, the price of which has been low for years, and who lived where Algeria’s financially affluential wages through prosperity, but with the state’s decision regarding austerity in late 2015 after which initiated the looming financial crisis, can you see a path of construction ….. or will it stick to maintaining internal stability and economy?

Will China adhere to the support of Algeria despite the crisis … and is the right of China’s plans to develop the countries of Africa in need of funds to maintain its position on the global economy?

 

 

 

 

Adel Soualah

Adel Soualah is a freelance Journalist, Videographer and Writer from Algeria.

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