TradeMark Southern Africa

Windhoek:  Africa should rethink its relationship with China and end current trade practices under which raw materials are being spirited out of the continent with little benefits to technological and industrial capacity.  Namibia has booming trade and political relations with China, which has emerged as the world's second largest economy and could be the biggest as soon as 2018.  Despite the cosy relations, Namibia has said Chinese investors should add value to raw materials domestically.

Chinese investors are also being urged to establish joint venture manufacturing entities.

The relationship between China and Africa should be win-win, Edward Kamboua from Namibia's Ministry of Trade and Industry - told a delegation of Chinese business executives that was in the country this week.  Kamboua, the Undersecretary for Trade and Commerce, said: 'We wish that the relationships we have established with friendly nations like China are translated into a mind-set shift, able to create a new culture of value addition to our natural resources.'

By 2010, Sino-Namibia trade stood at around US$713 million, 60 percent higher than in 2000.  Trade between the two countries has grown, on average, by 20 percent over the past decade.  Chinese direct investment in Namibia was around US$52.3 million by 2010.

There are 27 Chinese state owned companies operating in Namibia in construction, mining, engineering, information technology and financial services.

Kamboua said the trade was heavily tilted in China's favour, with little trickle-down benefits to the Namibian economy in terms of investing in infrastructure and building the country's manufacturing base.

'Namibia wants to see a new approach and strategy in respect of investment promotion. We want to see an economic strategy anchored in beneficiation of minerals and value addition to natural resources through partnerships and joint ventures with Chinese investors or business people,' Kamboua said.

Namibia, like most African countries where Chinese investors are actively involved, offers huge incentives for setting up manufacturing factories.

'This means that manufacturing opportunities should be explored before raw material exports are considered. As a young and developing nation our most important challenge is to become creative and innovative, and it is in these aspects that we should engage our friends so that we can adapt our processes in order to remain competitive international,' Kamboua said.

China has emerged as a major buyer of Namibian uranium, copper and zinc.  The Chinese and Namibian governments are finalizing legal documents to enable agricultural produce from the latter to debut on the Chinese market soon.

This was revealed by China's Ambassador to Namibia Wei Ruixing. Ambassador Ruixing said there was scope for improving current business relations between the two countries.  'We are now facing an unprecedented opportunity to expand the economic and trade co-operation between China and Namibia,' he said.

However, concern still remains on Chinese investors' lack of appetite to enter manufacturing, which African countries argue will help technological transfer and boost employment levels.

Businessman and executive chairman of the Hangala Group, Leake Hangala, said: 'We would like to see ourselves creating a strong manufacturing and industrialized economy that will create jobs and enhance the living standards of our people, as well as provide goods and services that can compete well on the global market.

'Thus we are looking forward to working with our Chinese counterparts in a relationship that will contribute to the industrial development of our economy, a relationship that will transfer innovative skills to our people, a relationship that will economically and socially empower and sustain the livelihoods of our and a relationship that builds on mutual benefits.'