Despite rapid growth in Sino-African trade in recent years, the size of bilateral trade "can not match the good political relations between the two sides," said Zeng Qiang, analyst with the China Institute of Contemporary International Relations.

Last year, bilateral trade was US$6.5 billion, accounting for a mere 1.9 percent of China's total foreign trade in 1999.

However, gradual economic recovery in recent years and the rich resources in the continent are painting brisk prospects for Sino-African co-operation.

Observers believe that the soon to be opened Sino-African Forum will become a major push to bilateral trade relations.

The forum, to be opened on October 10 in Beijing, will be participated by foreign ministers and foreign trade ministers from China and more than 40 African countries.

Dahiru Abubakar, Nigeria's ambassador to China, acknowledged that despite some drawbacks such as trade imbalances, there are still bright prospects for raising the level of economic co-operation between Africa and China, "especially now that there is awareness of and the political will to tackle the problems."

Jin Bosheng, researcher with the Chinese Academy of International Trade and Economic Co-operation, agreed that there is room to increase bilateral trade with Africa.

"Judging from the economic situation on both sides there is still room for future development of Sino-African trade," Jin told a recent international seminar on Sino-African trade.

Africa is likely to become a region of big potential for China to utilize natural resources abroad.

Dubbed the world's resources house, Africa is rich in major minerals such as diamonds, gold, manganese and cobalt. Many of the resources have not yet been fully tapped. The continent also boasts abundent animal and plant resources.

In contrast, China faces a possible shortage of some mineral resources and its robust economic growth is forcing it to better utilize resources abroad.

"Africa can provide natural resources urgently needed by China," Jin said.

Meanwhile, Africa has been a big market for Chinese contractors and labour service exporters.

In the first half of this year, China clinched 573 contracting and labour service contracts with Africa with a total value of US$1.2 billion.

Africa is not only a commodity market with huge potential, but also an investment market that needs to be fully tapped, said Zeng of the China Institute for Contemporary International Relations.

With the overall political situation in Africa stabilizing, many of African countries are now carrying out opening-up policies, trying to improve the investment climate to attract foreign investment.

"It is time for Chinese enterprises to invest in Africa," he said.

Actually, many Chinese enterprises have already started their investment on the continent.

According to the Ministry of Foreign Trade and Economic Co-operation, China had launched 480 ventures in 47 countries in Africa with total contractual investment of US$820 million and Chinese investment of US$530 million as of the end of June.

However, few of the enterprises doing business in Africa are large companies.

Zeng suggest China should focus its investment in Africa in agriculture, processing and manufacturing industries.

Although Africa, with a vast land area and good natural conditions, has a solid basis for agricultural development, most African countries are still food deficient and heavily rely on outside assistance.

In contrast, China, with only 7 percent of the world's arable land, successfully feeds 22 percent of the world's population.

"China has strong advantages in intensive cultivation, agricultural irrigation, fine seed breeding, cultivation technique, and development and application of medium and small-scale farm tools," Zeng said.

He suggested the Chinese Government and enterprises select countries with better basic conditions to set up food production bases either by leasing or contracting or purchasing land. Managers and administrators of the bases should be sent from China.

In industrial investment, Zeng said that Chinese enterprises should take technology and equipment investments as the key form of investment in Africa since China is also a developing country that needs capital for its own economic development.

In this way, Chinese enterprises can launch joint ventures in Africa to better tap local market.

"Some of the products can also be exported to European and American market via the African countries," he added.

(China Daily 10/01/2000)