By Peter Sinkamba President, The Green Party
In Proverbs 29:18, the Bible tells us that where there is no vision, the people perish.
Indeed, this biblical teaching correctly illustrates the on-going public demonization of China.
In my view, Government is fully responsible for the Zambia-China fallout for two reasons. First, Government has demonstrated lack of vision to harness the Zambia-China trade relations for mutual benefit. Secondly, Government has exhibited lack transparency on the Zambia-China trade thereby unjustifiably offending the public.
It is a pity that the nation has found itself in this mess. No doubt about it, Zambia needs China. The fallout is fatal economically and socially because at the moment, Zambia’s main trading partner is China, followed by South Africa, and Congo-Kinshasa.
Of course, the trade between Zambia and China is driven by copper. Reduced overseas sales of copper in the last few months have driven the monthly decline in merchandise exports, and has been exacerbated further by lower copper prices which have been hit by the intensifying U.S.–China trade dispute. And as a nation, we are slowly but surely feeling the pinch.
What is comforting is that China is seeking to further expand trade with Africa as a way to reduce risk from the U.S. trade dispute, a strategy which was made loud and clear at a two-day summit hosted by China a fortnight ago in Beijing.
No doubt about it, expanding imports from Africa could help China to spread the risk presented by the U.S.-China trade war.
For this reason, China looks to Africa as one of the biggest trading partners. This is evidenced by value of trade with the continent for the January-July period which grew 20% year-on-year, with imports jumping 30% to $56.8 billion and exports to Africa climbing 10% to $59.3 billion.
The growth in China’s exports to Africa has been driven by several factors, including the increasing difficulty of selling to the U.S., as well as expanded exports of solar power equipment to the continent. In addition, China shipped more automobiles and auto parts to African countries as well.
What is comforting further is that at the Forum on China-Africa Cooperation, the two sides adopted a joint statement and a three-year action plan, laying out plans to deepen cooperation in various fields.
Priority areas of cooperation agreed upon at the summit include boosting trade, nurturing African industry, and strengthening security.
Chinese President Xi Jinping stressed the importance of opposing protectionism and supporting free trade. President Xi also called on African leaders to work together for both sides to develop and prosper together.
Against this background, it is imperative that Zambia abandons the status quo of simply exporting unprocessed copper and importing large amounts of factory-made goods from China.
Instead, Zambia should develop a Zambia-China trade strategy which promotes local production of finished copper and cobalt products in Zambia for the African and global market, such as solar power equipment, batteries for electric cars, and other products, thereby creating local jobs and wealth for the nation.
Secondly, Zambia imports a lot of trucks from China. Through a trade strategy, Zambia could emulate what other African governments have done, such as the Algerian Government, which wooed Chinese truck maker Shaanxi Automobile Group in May this year and has started up an Algerian truck assembly plant through a local joint venture.
Zambia could also emulate the South African Government strategy where State-owned Beijing Automotive Industry Corp., or BAIC, was wooed in July this year to open a passenger vehicle assembly plant in South Africa.
It is folly to think that Zambia can completely cut off trade relations with China. It is no secret that Beijing continues to pour money into Africa, with foreign direct investment totalling about $40 billion cumulatively — close to America’s leading figure of $57 billion.
With the U.S. and Europe growing hesitant to make infrastructure loans to Africa, China’s more proactive lending has made it an even more valuable partner. The question is: on what terms?
At the summit, China tripled its offerings of grants and interest-free loans to Africa as Xi sought to dispel fears that borrowers would fall into so-called “debt traps” — as was the case with Sri Lanka, which was forced to hand Beijing control of a key port last year. Such assistance comprised $15 billion, or about a quarter of a $60 billion aid package Xi pledged to the continent, compared to $5 billion in another package of the same value China offered three years ago.
The offer of $60 billion aid package grants and interest-free loans could anchor Zambia’s strategy. Without a well-thought out strategy, Zambia stands to lose out on this package. This is my point of departure.
What I was expecting from Government leaders that went to attend the summit in China is a well-thought out explanation to the public on what transpired at the summit, and an elaboration on benefits that could accrue to the country.
Sadly, all I have seen is petty defence of Chinese loans without a clear-cut justification and strategy for the future trade relations. And herein lies our tragedy as a nation: where there is no vision, the people perish.
If only Government could develop a Zambia-China trade strategy to tap into the $60 billion package, as well as being transparent on the trade deals so far procured from China, this country is headed for even more economic and social decay.
Secondly, without winning back public confidence in Zambia-China trade relations, I foresee China looking more in the direction of South Africa, Angola and Zimbabwe than Zambia. Believe you me, time will tell