Franco-Chinese common investments in Africa come true.

27 Nov

Tuesday, November 15 President Francois Hollande and Chinese Vice-Prime Minister Francois Hollande signed financial agreements to turn into reality the Franco-Chinese Partnership in Third Markets Declaration signed during the visit to Paris of People’s Republic of China Prime Minister State of Affairs: Li Keqiuang on July 2, 2015. The Partnership will promote co-financing and implementation of joint projects carried out through by French and Chinese transnational companies joint ventures. Projects focus on Asian countries but especially on African continent. The investment will be concentrated in various sectors from the high finance to infrastructures.

Mr. Kai has come to Paris with a strong delegation from China Communist Party Central Committee to sign the contract to create the financing structure of this unprecedented partnership between two historical enemies that for over a decade have severely clashed for the monopoly of African markets. 3,000 m euro have been deposited by the respective central banks in to the CDC International Capital saves, a French financial institution controlled by bank group Caisse des Depots. This is an initial capital destined to reach the two billion euro by 2020. To achieve this goal the governments in Paris and Beijing intend to involve in the initiative of private financial institutions in their respective countries

The economic partnership agreements for the Asian and African markets is based on three principles.

1. The dominant role of private enterprises with the support of public authorities. Companies will be the main players in commercial and industrial partnerships in third countries. They will be subject to the respect of international law, international practices and relevant commercial principles, as well as the laws and regulations of France, China and third countries. Governments will support their private companies providing guidance and coordination to create an enabling environment and conditions for business partnerships.

2. Equal partnership and win-win cooperation. France and China want to contribute to structuring projects for local economies, strengthening their “connectivity” and supporting regional integration. This targets are vital in order to create a win-win situation where benefits will be shared with third Countries in order to avoid popular unrests and develop national economies to create more and better market opportunities for France and China enterprises.

3. Complementarity, mutual benefits, openness and inclusiveness. France and China will engage in partnerships based on their productive, technical and / or financial complementarities. They will encourage their companies to go beyond the traditional subcontracting schemes to give way to new formulas for co-production, co-production and co-financing. In addition to the private sectors, projects in third markets may be carried out by public and semi-public financial institutions and companies. Open to other countries and international and regional organizations, these partnerships could be sought potentially in all regions of the world. Nevertheless, priority will be given to Asia and Africa.

IV. France and China partnership intend to cooperate in the following areas:

1. In the fields of infrastructure and energy, promote environmentally friendly industrial partnerships between Chinese and French companies in third markets. French and Chinese companies will be encouraged to support the development of regional interconnections and the strengthening of the private sector in Europe, Africa and Asia. With regard to cooperation in the field of civil nuclear energy, these fall within the scope of the joint declaration on nuclear energy adopted on 30 June 2015.

2. Support the entry into third country markets of civil aircraft manufactured jointly by France and China.

3. In the field of transport, make the most of the respective strengths in order to strengthen co-operation in the field of high-rail and urban railway, study and discuss regions and potential co-operation. China has already lunch a serial of railway projects that will link several African Countries, increasing the regional economic integration. The railway Ethiopia – Djibouti will permit to Addis Ababa to have an access to the sea, lost after Eritrea secession. This will boom Ethiopian economy and will reduce the present border conflict dangerous situation with Eritrea that has create a war and several minor border military confrontation in the recent past. Another inter regional railways project is focus to link several East African Countries: Uganda, South Sudan, Burundi, Rwanda, Kenya, Tanzania. The main objective is to assure a rapid and cheapest transport of goods linked to East Africa Community economic integration project that will support the political and social regional integration. Chinese East Africa railway network may have positive impact on regional peace. Through the market link increment several regional underground conflict may be mitigate by common economic interests between East Africa Countries. At the moment is not clear if French companies will joint these mega railways projects or will limit to participate only to new railways project in the Continent.

4. In the agricultural sector, France and China desire to make full use of the respective industrial and technical strengths to intensify bilateral cooperation in favor of food security, food safety and agricultural training with a sustainable integrating economic development approach. They hope to increase third Countries environmental performance and common wealth. Specific sectors such as animal husbandry, crop production, and issues such as agro-ecology, agricultural mechanization, rural energy can be the subject of enhanced cooperation. Paris and Beijing are intentioned to straight knowledge cooperation in agricultural with training and scientific research in order to assist developing Countries in raising the level of agricultural production and achieving the sustainable development of agriculture and agri-food industry.

In this sector the two international partners have at the moment different approach. France utilize agricultural investment in Africa to improve French companies expansion on international markets exporting African products with the advantage of free trade agreements between Africa and Europe. These agreements are mainly facilitate French companies that can export in European markets agricultural raw products or agro alimentary products without pay custom taxes. This is artificially increasing French companies competitive advantage respect European agriculture companies that are concentrate their business in Europe. China is more focus to create a strong agricultural market in Africa with the hope to monopolize it for further huge profits. The integration between these two fundamental different business approach will be the mainly problem to resolve in order to assure win-win opportunities in the sector.

5. In the health field, France and China will fight together against emerging infectious diseases and major epidemics. French and Chinese pharmaceutical industry will actively participate in the analysis of epidemics and the sharing of information. Strengthening collaboration in these areas will have a positive impact on the third Countries only if inclusive and efficient public health systems will be assured to the population by African governments. If not French and Chinese health investments will be profit to private hospital industries in East Africa monopolized by Indian corporations.

6. In the area of combating climate change, France and China wish to explore the possibility of establishing several projects in third Countries, in particular in developing countries, in the field of renewable energies. Energy efficiency, prevention, alert and disaster reduction will be the core of the intervention. France and China welcome and support efforts to accelerate the development of renewable energy in Africa and developing countries in the run-up to COP21 and COP22.

7. The finance and insurance sectors may facilitate the establishment of partnerships between French and Chinese companies in third countries, in particular: encouraging partnerships between Chinese and French financial institutions in accordance with market principles and multilateral practices; establish mechanisms for regular dialogue and information sharing among these institutions; actively develop cooperation modalities such as co-financing, parallel loans, equity investments, risk-sharing and technical assistance; develop the use of innovative financing instruments involving public and private funds in the framework of cooperation projects. The common objective is to foster the creation of a fair and open governance framework and business climate for the investment projects concerned. France and China intend to straight financial cooperation with third-party institutions in order to diversify sources of financing and provide necessary financing facilities for common industrial projects. Financial and insurance cooperation may stop the development of finance and insurance African companies now days mainly controlled by Islamic institution in North Africa, Nigeria financing holding in West Africa and Kenyan and South African bank system in East and South Africa. African financial holding lobbies may force African governments to impose nationalistic measures to protect local finance environment under menace by French and Chinese financial holdings.

Both international partner underline the importance of the Franco-Chinese High-Level Economic and Financial Dialogue and other mechanisms of dialogue and cooperation between France and China at the multilateral and bilateral level. Their interactions and coordination with international organizations, including the UN, the International Monetary Fund, the World Bank and the regional multilateral development banks, in particular the new Asian Investment Bank (AIIB), should be enhanced and enhanced. in order to associate them with cooperation projects in third markets. French and Chinese companies will be encouraged to actively discuss opportunities to jointly response to international calls for tenders.

The Franco Chinese economic alliance if will be consolidated, is destinate to become one of the key players for productive investments in Africa. An alliance that will force Paris and Beijing to review their foreign policies on the Continent. They will be discussed all the antagonistic or unclear positions regarding relations with African countries. The two world powers will have to find compromises and common policies towards issues such Zimbabwe and Burundi. Two Countries where France and China foreign policies are currently deep different.

For France, the Franco Chinese Partnership in Third Markets implementation is a way out of the political and military logic of confrontation with the Red Dragon. A logic which is gradually moving away from trade wars and military conflicts virtually unsustainable for Parsi. For China, this alliance represents a rare opportunity to break the western front against the Chinese expansion in Africa. It’s an unexpected opportunity to access to advanced technologies. This economic agreement will permit China to slow down its very expensive military engagement in Africa. Military efforts already evident with the military cooperation agreements with Djibouti that will permit China to open its first military base in Africa. Chinese military engagement in Africa is underlined too by the first Chinese military adventure in South Sudan (2014) that is turning into a resounding failure inserted into the failure of the peacekeeping operation of the United Nations.

The Paris Beijing Financial economic axis represents a break on the policy of secret wars promoted in the last twenty years by the Bush, Clinton, Obama administrations to contain China’s advanced in Africa. Policy that will likely be maintained by the newly elected president Donald Trump. At the moment, no official reaction from the White House has been reported. The American Berlusconi is engaged in the creation of the presidential team.

The Paris Beijing axis is also a France obvious lack of confidence on European Union foreign policy of the. A foreign policy that has never managed to become common but always entrusted to guide European Power interests: Great Britain, France, Germany. With BREXIT earthquake (very favorable for Africa) and the end of the axis Berlin – Paris, France is forced to support alone the necessity to continue French African colonies domination. Colonies increasingly rebellious.

Africa is vital to prevent the French economic collapse. In face of the European Union economic treaties – Africa failure Paris seem determinate to straight the alliance with Red Dragon in order to don’t lose Africa natural resources forever. An alliance that will bring to France concrete benefits in the medium term but will increase China’s power in the world. A long-term alliance that could benefit the Asian power only.

The Paris Beijing axis can represent certain advantages for African countries. First of all the reduction of instability and conflicts created by Western powers for geopolitical domination reasons, the downsizing of the French colonial role in Africa and the possibility of access to alternative investment fonts to World Bank and IMF. These benefits will only last a few decades if the African Union will not be able to exploit foreign partners to start their own industrial revolution, strengthen the continental union process and stood on international arena as the fourth independent political and economic center. Failure to reach these target will put Africa at risk to be crushed by the imperialist logic of old and new colonial powers.

Fulvio Beltrami
Journalist, Uganda
@Fulviobeltrami

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