- As Bank of England keeps rates at record low as economy slows
China’s trade with African countries rose nearly one-fifth in the first quarter from a year earlier, while its direct investment in the continent soared 64 percent, the Chinese commerce ministry said on Thursday.
Sun Jiwen, spokesperson at the ministry said trade cooperation between China and Africa is “off to a flying start” in 2017, thanks to policy benefits from a cooperative framework laid down by the Chinese and African leaders in South Africa in 2015.
China has a relationship with Africa which pre-dates its current resource-hungry economic boom.
In previous decades, China’s Communist leaders supported national liberation movements and newly independent states across the continent.
Chinese President Xi Jinping announced plans to plough 60 billion dollars into African development projects at a summit in Johannesburg in 2015, saying it would boost agriculture, build roads, ports and railways and cancel some debt.
Sun said China’s total trade with Africa rose 16.8 per cent to 38.8 billion dollars in the first quarter, its first quarterly increase on a yearly basis since 2015.
“That’s mainly thanks to a 46 per cent year-on-year jump in imports from Africa in the first quarter with agricultural imports rising 18 per cent, while Chinese exports recorded a smaller fall of one per cent from a year earlier,” Sun said.
China’s non-financial direct investment to the continent also jumped 64 per cent in the quarter, as countries such as Djibouti, Senegal and South Africa all saw a more than 100 per cent rise in the quarter.
China’s growing investment in the region is also likely to have been buoyed by its ambitious global trading strategy known as the Belt and Road Initiative, which appeared to be gaining traction recently, particularly in parts of East Africa where major infrastructure and defence projects are being built.
China’s trade relations with African countries are often dominated by big natural resource deals, triggering criticism from some quarters that China is only interested in the continent’s mineral and energy wealth
Africans broadly see China as a healthy counterbalance to Western influence but, as ties mature, there are growing calls from policymakers and economists for more balanced trade relations.
In the meantime, the Bank of England decided Thursday to keep its main interest rate at a record low of 0.25 percent as the economy weakens ahead of Britain’s departure from the European Union.
Though higher rates would help limit inflation, which has been rising, the policymakers erred on the side of caution after economic growth more than halved to 0.3 percent in the first quarter compared with the previous three months.
The Monetary Policy Committee voted 7-1 to keep rates on hold, with one member seeking a quarter point increase.
The bank’s governor, Mark Carney, has said volatility and uncertainty would govern the process of Brexit, even though negotiations have yet to begin.
The pound has been volatile since the June 23 vote, at one point losing a fifth of its value. That’s pushing up inflation, which is now 2.3 percent annually, within the central bank’s goal of about 2 percent. Analyst Alan Clarke at Scotiabank has predicted that despite the pound’s recent rebound, inflation will rise above 3 percent this year.
But while higher inflation might suggest higher interest rates, the central bank is worried also about economic growth, which would get further hurt by a rate hike.
“Inflationary pressures and uncertainty around Brexit will persist and rushing into a decision now could be dangerous. The Bank of England’s verdict shows that they are mindful of the possibility of lower growth as companies put investment on hold in the face of this uncertainty,” Kerim Derhalli, CEO of investment app invstr.
In the minutes to Thursday’s decision, the bank said that if the economy performs as expected, its interest rates may be raised “by a somewhat greater extent” than is currently expected in financial markets.
Additional report from Abc News