Lilongwe: Malawi’s trade volume with the People’s Republic of China hit a record high of $100 million (K25 billion) in 2011, representing a 400 percent jump over 2010, the Chinese Ambassador Pan Hejun has said. Pan disclosed the figure in Lilongwe during a press briefing on the Forum on China-Africa Cooperation (Focac) which is a platform for collective dialogue and effective mechanism for practical cooperation between China and Africa.
"Trade between Malawi and China was small before Malawi joined Focac in 2009, but as I am talking now, trade volume is estimated at $100 million which is an increase of over 400 percent," he said.
Such a growth in trade volume implies the deepening of trade ties between Lilongwe and Beijing, which in the long-term will see Malawi growing its export base to outpace the appetite most Malawians have for imported goods.
That aside, it signals a wake-up call to local exporters of an existing huge market access in Asia and China in particular.
Pan said Malawi, like other African countries, continues to export 95 percent of its export products duty free and urged the country to utilise such an opportunity to scale up its export base.
The ambassador challenged Malawi that China boasts of over 1.3 billion people which, he said, has translated into increased demand for goods and services from outside economies such as Malawi.
"For the last five years, we have been in the forefront as Chinese Embassy in promoting market access for Malawi exporters and also for Chinese investors to come and invest in Malawi," said the ambassador.
He said Malawi should also expect a surge in terms of foreign direct investment (FDI) inflow from China which he said will help create jobs and grow the economy, among other benefits.
Pan repeated that his office is encouraging serious investors to start large-scale business ventures in Malawi. He added: "Chinese policy is to promote serious FDI inflow."
At continental level, Pan said by the end of April 2012, China’s direct investment in Africa exceeded $15.4 billion.
Since 2009, he said China has become the largest trade partner for Africa with an estimated trade volume of $166.3 billion, representing an increase of 31 percent year on year.
He said the China-Malawi relations have also benefited a lot from the Facoc mechanism under which a series of projects and programmes have been launched.
"Every year, we provide around 30 government scholarships to Malawi students and around 200 short-term training opportunities to Malawian people from all walks of life," he said
Minister of Industry and Trade John Bande said in an interview on Tuesday that the increase in the value of trade is evidence that Malawi has now become a safe destination for investors. "This trend will go on because of the political will that is there and reforms that are being carried out," said the minister.
Despite economic hardships that Malawi experienced last year, the country’s investments rose beyond the forecast levels, according to a 2012 government annual economic report.
One major factor explaining the increased FDI inflow is the political relations between Malawi and China that have boosted confidence of investors to invest in Malawi.
About 62 percent of total investment pledges of $967.5 million in 2011 originated from Asia with China and India emerging as prime origins of investors according to the annual report.
- Related article: They are Chinese vendors not investors, says the Chinese ambassador
Chinese nationals flooding to rural areas to do businesses are mere vendors and not investors, Chinese Ambassador to Malawi Pan Hejun said on Monday in Lilongwe. Ambassador Hejun further said it is up to the Malawi government to thoroughly screen the Chinese nationals willing to invest in the country.
"These are small vendors and investors and why should your government allow them to do business. They are capitalising on government's failure to screen foreign traders," said Ambassador Hejun.
His remarks come amid a mounting resentment for such 'Chinese vendors' by local traders, accusing them of monopolizing businesses.
Ambassador Hejun acknowledged that under government trade and investment laws, foreign traders are not allowed to do businesses in district trading centres.
He said he supports the decision to relocate such traders into cities or towns. “Rules should be respected and we don’t encourage these traders to go into rural areas," he said.
Malawian traders in district trading centres have for the past months been protesting the presence of foreign traders in their areas.
Apart from Chinese nationals, some of the foreigners doing businesses in rural areas are Burundians.