Investing in SADC

“China is willing to in- crease the imports from the SADC， encourage enterprises with strength and good reputation to invest in SADC countries. Both sides should further strengthen cooperation in economy and trade， investment， finance， energy resources， infrastructure and other fields， to realize mutual benefits and the winwin，” said Chinese vice premier Wang Qishan recently on the opening ceremony for China and Southern African Development Community (SADC) Economic and Trade Forum.This is the first time for China， the largest trade partner of SADC， to hold a forum for entrepreneurs and investors from both sides in Beijing and investors， aiming at further promoting the trade and investment. Chinese vice Premier Wang Qishan and Pohamba， rotating chairman of SADC and president of Namibia， attended the ceremony and made speeches. Under the witness of Wang and Pohamba， CCPIT and the secretariat of SADC signed cooperation documents.Founded in 1980， the Southern African Development Community， SADC for short， is an association set up by Angola， Botswana and other 15 countries in Mid-South Africa. SADC occupies an area of 33% and a population of 27% in Africa， while contributes about one third of the GDP of Africa. According to the statistics， the trade value between China and SADC totaled 61.5 billion US dollars in 2010， accounting for 48.4% of that between China and Africa. By February 2011， the direct investment in SADC from China topped US$9.9 billion， including US$4.977 billion of non-financial investments. At present， China has overtaken the United States and European Union， and become the largest trading partner of SADC. SADC is widely recognized as the area in Africa with the highest level of economy and integration. As a whole， SADC plays a role of guidance and demonstration in the development of Africa. Therefore， strengthening the cooperation with SADC has a significant meaning to Sino-African cooperation.According to Chinese vice premier Wang Qishan， in recent years China and SADC made great progresses in cooperation in economy and trade， investment and other fields， and the cooperation has brought tangible benefits for both parties. Last year， China and SADC bilateral trade amounted to US$61 billion， accounting for nearly half of that between China and Africa， meaning China has become an important trade partner and source of investments for SADC. He further said that China will continue to help SADC countries enhance the ability of independent development， within the capacity of China. China is on the “12th Five-year” plan， and SADC is participating in the planning of North to South African economic development corridor， which will bring new opportunities for practical cooperation. He stressed that enterprises are the mainstay for both parties’ economic cooperation， and China government is willing to create a favorable environment for enterprises together with SADC countries. Meanwhile， he expressed the hope that entrepreneurs can take the chance of the forum， to strengthen the communications， improve the understanding， deepen the cooperation and promote the development of new strategic partnership between China and Africa.Rotating chairman and president of Namibia， Pohamba said in his speech that， many Chinese investors have participated in important strategic construction projects of various fields of SADC economy， such as infrastructure， communication， mining， energy， and agricultural development. In cooperation with China， SADC is urgent to promote the bilateral trade， to make more convenient for technology transfer， for further expansion of manufacturing industry and improvement of regional industrialization. He said:“We encourage investors and entrepreneurs from both China and SADC to expand existing cooperation， increase the investment， develop opportunities， and promote bilateral trade and cooperation. I believe that this forum will help in establishing a win-win partnership.” He also said that SADC values this forum as a good opportunity for entrepreneurs and investors from China and SADC to set up long-term mutualbeneficial cooperation relationship， and he wished more Chinese investors to develop businesses in SADC countries and contribute in promoting the industrialization of SADC. According to Pohamba， SADC is trying on custom union and unified market and currency to promote regional integration.Chairman of China Council for the Promotion of International Trade， Wan Jifei said that， SADC play a role of guidance and demonstration in the development of Africa as it is the area with higher level of economic development and integration in Africa. Enterprises of China and SADC have wide cooperation， and especially they have a good cooperative foundation in energy， infrastructure， manufacturing， agriculture， finance and so on. The great potential in manufacturing， rich natural resources and improving infrastructure in SADC are quite attractive for Chinese enterprises.Qu Xing， director of China Institute of International Studies， believes that the cooperation between China and SADC is of importance in SinoAfrican cooperation. He said: “The 14 members of Southern African Development Community actually share one third of African population， territory and producing economy， while contribute nearly one half of the trade volume between China and Africa. Secondly， these countries are relatively more developed and more integrated than other African countries， while have a stable economic and political environment. Therefore， they have greater development potential， and can focus on infrastructure construction， which China is good at.”At present， China and SADC has had wide cooperation， and made good cooperative foundation especially in energy， infrastructure， manufacturing， agriculture， financial industry， tourism and service industry， etc. More and more Chinese enterprises and capital are entering SADC market. Qu Xing believes that the economic and trade cooperation between China and SADC which are all of developing countries has brought substantial benefits for both sides: “The projects under development by China can provide suitable technologies and implementation practices， etc. for developing counties. Meanwhile， China participating in project bidding lowers the bids from western countries， which actually help SADC cooperate with various countries in the world with more reasonable prices and more favorable conditions. So， we can say that both direct cooperation between China and SADC and participation of China in the competition can contribute to SADC’s development.”Great potential in manufacturing industry， rich mineral resources and improving infrastructure are important factors that attract Chinese enterprises to invest and develop businesses in SADC countries. James Benote， chief executive operator of AfrAsia Bank， said， the free trade area established by SADC in 2008 also provides investors with great opportunities. He said， Mauritius， a member of SADC， signed tax preferential agreements with 43 African countries， and it can be a portal for Chinese enterprises to invest in Africa， especially in the Southern Africa.As an integrated economic entity， SADC plays a role of guidance and demonstration in the development of Africa. SADC intends to begin the implementation of an integrated regional infrastructure plan. In June 2009， Common Market for Eastern and Southern Africa (COMESA) officially established a customs union; in April 2009， SADC， COMESA and East African Community， the three organizations in Africa decided to spend 5 to 10 years in overall planning “North to South Africa Economic Development Corridor”， striving to establish a low cost， high profitable transportation artery with perfect infrastructure， from the capital of Tanzania， Dar-es-Salaam in Northern Africa to Durban of South Africa.Nghimtina， minister of engineering and transport of Namibia that holds SADC’s rotating presidency， said that the integration of Southern Africa will promote the economic and trade cooperation between China and the southern Africa. “Several closed countries won’t provide information and business opportunities to China. Now， we join together， and Chinese merchants can learn opportunities of different industries in different countries more easily and clearer. Integration can help investments in any southern African country radiate all the other countries in this region， which brings Chinese enterprises profitable opportunities.” SADC representative attending the form recognized that Chinese capital and enterprises’ participating in these huge plans is very important. “In the future， the Southern Africa can build manufacturing industries that export to China. We hope to have ‘50 to 50’ mutual-beneficial cooperation， and benefit all people，”Nghimtina said. SADC once estimated that currency would be unified in 2016 to 2018 in southern Africa. However， South Africa said that due to the negative influence on the single currency by European debt crisis， the plan may be put off. To this， Nghimtina explained that SADC will keep on gradual promotion of single currency， but the plan may not be accomplished overnight. SADC needs to get all member countries get prepared psychologically.“Unified visa may be realized as early moves in integration，” he said. Even so， business people express an optimistic caution. Many Chinese entrepreneurs put forward problems they encountered in Africa at the forum， such as personal safety and property security， difficulty in getting work visas， and changeable local laws and regulations. An entrepreneur complained directly to the minister from a SADC country， saying that he encountered an armed robbery at the capital of the nation. The board chairman of trade and culture company said he was still worried about the regional political upheaval. In addition， due to the imperfect financial system in southern Africa， there are difficulties in payment safety and fund liquidity. He believes that there are both opportunity and risks in investing in Africa， and enterprises see the success of Sino-African economic cooperation depends on the progress in Sino-African political and diplomatic cooperation. This board chairman trade may be the better choice for now.After the forum， 200 plus Chinese and SADC entrepreneur representatives from agriculture， infrastructure， tourism， manufacturing， communications and other fields had negotiations.