8 Things Critics of China’s Belt & Road Initiative are Not Telling You

CAMAL’s Managing Director Mr Walter Ruigu wrote the article attached to give a better understanding on Belt & Road initiative.

”I attended the second meeting of the Belt & Road Initiative (BRI) in Beijing a couple weeks ago. The event was a more subdued affair compared to the previous meeting and similar multilateral forums such as FOCAC. This was partly in response to the ever-growing list of negative narratives that have been lobbed at the initiative that range from references to ‘debt traps,’ new colonialism and other labels that often leave readers perplexed at what exactly is going on. I would like to point out essential components of the BRI that critics are missing. Belt & Road

CAMAL opens office in Shenzhen to serve growing Africa demand

CAMAL Group loading cargo in Guangzhou, China for our client in Ivory Coast.

CAMAL opens an office in Shenzhen as we continue to improve our services for our Clients. The Office will give access to Guangdong province especially, Guangzhou, Foshan, Zhuhai and environs. Shenzhen is a transport hub in China as it has one of the best modern ports in the Country Shenzhen being one of the most fast growing cities in China, there are many opportunities which CAMAL has identified and delegated them to the new office. The port will see to it that;

  • CAMAL clients will see improved lead time due to the efficiency of port activities in Shenzhen.
  • The goods imported from China through CAMAL get to the clients in good shape because of the improved modern way of handling containers.
  • There is smooth loading of cargo to client’s destination.

Port of Shenzhen consists of facilities in the following areas: Da Chan Bay, Shekou, Chiwan, Mawan, Yantian, Dongjiaotou, Fuyong, Xiadong, Shayuchong and Neihe this means that the loading of any cargo procured from the mentioned places will get to the port in due time.

CAMAL has been doing business in China for a long time; the firm understands the distribution of manufacturers and suppliers in different parts of China. From Shenzhen office, CAMAL will be able to help clients procure from the following cities,

  • Guangdong Zhongshan: Machinery and electronics, Packaging, Lighting,
  • Dongguan: Electronic products
  • Guangzhou: Automobile
  • Shenzhen: Electronic products
  • Yunfu: Stone, Kitchenware

The advantage of using Shenzhen office for your procurement purpose include:

  • CAMAL has a technical team which has lived in China and they have deeper understanding of products in this part of China.
  • CAMAL will do the negotiation on your behalf so there will be no language barrier between you and the supplier.
  • CAMAL will help you inspect the cargo before it is shipped to ensure you have the right products.

The firm will also ensure that the clients who have interests in technology are best served by the institutions which have specialized in that field. CAMAL has seen the need to be part of the firms pushing for advancement in technology because this is the only way firms out there will focus on cost cutting at the same time being efficient in production. Shenzhen office is  also connected to a chain of construction machinery suppliers i.e. the yellow machines and also construction materials i.e. tiles, prefabs and many more.

Other than assisting the clients to procure from Shenzhen and other cities in China, Shenzhen office will assist it’s the client to carry out successful trips to the supplier. These trips are aimed at assisting the client to meet the service provider and understand how the business can cut cost by procuring from China.

Shenzhen Port. Picture Courtesy of Wikipedia

Shenzhen office will be run by CAMAL’s head of Operations Mr. Razack Magagi. Feel free to reach out for  by writing to shenzhen@camaltd.com

KNCCI Marsabit County gets investors from China courtesy of CAMAL

CAMAL recently organised a trip to China for KNCCI Marsabit Chamber where the delegates had special interests in getting investors and also meeting suppliers. The 5 days trip was aimed at value addition to the Chamber and the office in China delivered beyond expectation.

CAMAL facilitated- KNCCI Marsabit and Guangdong Chamber of Commerce, B2B meeting with Chinese investors. The firm witnessed Signing of an MOU, exploring business cooperation and investment areas in Marsabit County. The talks held were aimed at identifying potential business opportunities from Marsabit

KNCCI Marsabit signing MOU with Chinese investors courtesy of CAMAL

 

The Chamber also had some interest in meeting construction material suppliers in China. CAMAL took the delegates to a company where they showed special interest in procurement of construction materials such as tiles, prefabs materials etc.

 

KNCCI Marsabit meeting with Chinese construction, energy and building materials companies.CAMAL also took KNCCI Marsabit to visit Solar panel factory. The Chamber had requested CAMAL to facilitate this meeting as they had a project which involved solar energy and they wanted to know where they can get them from. The meeting was successful with the supplier promising to work with CAMAL to deliver high quality products to the Marsabit County as soon as the order is placed.

KNCCI Marsabit Visit to Solar Panel factory in China courtesy of CAMAL

CAMAL will continue to organise such trips for the client to understand better opportunities and how CAMAL can assist them to procure from China after or during the trip. CAMAL’s value addition include;

  1. Identification of reliable suppliers for our clients;
  2. Carrying out factory due diligence  on behalf of the Client;
  3. Engaging with the potential investors;
  4. Advising the Client on how to procure Products from China;
  5. Facilitating preliminary discussions by having an interpreter who understands Chinese and English well to get rid of language barrier.

What Will the US-China Trade War Mean for Africa?

Ethiopia’s economy is in a period of transition; much has been privatized, but major sectors remain under government control, such as financial services and telecommunications.  Alemu sees the trade war as an incentive to continue economic reforms: “[I]t is the moment of truth for Ethiopia to rethink its trade practices and become a full participant of international and global trade to benefit from [the] U.S.-China trade war.”

On the other hand, a leading authority in Nigeria, Africa’s largest country by population, finds opportunity for his country as a result of the trade war.

If one casts the trade war as simply a confrontation between the world’s two largest economies, then the trade war “would impact the global economy negatively,” Director General of the Lagos Chamber of Commerce and Industry Muda Yusuf told This Day Live.

But, he continues, out of this comes a positive opportunity for Nigeria.

Increased tariffs on Chinese goods going into the United States “will create supply gaps in the U.S. market.” In other words, exports from other countries become “more competitive” thanks to the tariffs on China. Yusuf sees this as an advantage favoring Nigeria.

“Within the context of the African Growth and Opportunities Act [AGOA], this situation presents new opportunities for Nigerian export in the United States market,” Yusuf says.  It remains for Nigeria to position itself to take advantage of the opening.

According to the International Centre for Trade and Sustainable Development (ICTSD), AGOA is a “unilateral scheme of preferences dating back to 2000, and has served as the bedrock of trade relations between the U.S. and sub-Saharan Africa. It grants eligible African countries duty-free access to the US markets for thousands of products.” The law is currently extended to 2025.

By utilizing AGOA mechanisms to fill the partial vacuum that may be created as a result of slowing exports from China to the United States, Nigeria (in Yusuf’s case) and dozens of other sub-Saharan countries could take advantage of the U.S.-China trade war in areas where they have the ability to produce competing goods.

In addition, Chinese investors themselves may look for “alternative destinations” for their own investments, in order to circumvent tariffs on goods originating from China.  That, of course, depends on the quality of the investment environment that Nigeria can provide.

An executive from the Hong Kong-based Standard Chartered Bank also sees opportunities for African countries opening up in the Chinese market. As Reuters put it, summarizing Carmen Ling, Managing Director and Global Head of RMB Solutions, “China is likely to boost imports from African countries as it seeks new sources of commodities in the wake of a trade war with the United States.”

“We believe that countries like Kenya and Nigeria will benefit because China will look to import more from Africa; some agricultural products from Kenya, some oil products from Nigeria,” Ling predicted.

Suggesting a longer-term effect of the trade war, Ling added, “Trade flow patterns will change because China will need to look for new trade partners.”

Even in this small sample, it’s clear that African analysts see a mixture of harm and opportunity coming their way as the result of the trade war between the United States and China. Harm comes from the potential of China dumping cheap products into domestic African markets, and concerns over the possibility of reduced export opportunities to China due to soft demand. But there is also optimism about opportunities to fill the exports gap to the United States, and even to fill some commodities export gaps left by the United States in China itself.

But perhaps the most lasting positive consequence of this trade war could be to energize African policymakers and stakeholders to redouble efforts at economic reform, as Ethiopia’s Alemu suggested. The trade war may provide African countries with even greater incentives to reduce dependence on major country investments and aid, and to create investment environments that allow countries like Uganda, Nigeria, and Ethiopia to become part of the global supply chain on their own terms, rather than on the terms of others with differing and even conflicting long-term interests.

To complete reading this article please visit the original page The Diplomat

 

CAMAL-end to end procurement solutions.

  • CAMAL has continued to assist clients from various parts to procure from China. The firm understands  every business is striving to cut on cost during its procurement cycle without going for low quality products. CAMAL is a solution finding firm for such businesses.
  • CAMAL has build relationships with the manufacturers in China and has the ability to find you the best suppliers China has. Recently, CAMAL conducted a factory visit in Shanghai to inspect the quality of the product before shipping them to the client. This was for a client who procured weighing equipment  in bulk for supermarkets.

CAMAL- Inspecting the cargo before shipping

  • CAMAL has rich experience in procurement. The firm has technical experts who understand Client expectation. The engineers in China will ensure the client get what he/she ordered. CAMAL sometimes works with other inspection bodies like SGS to ensure the factory is competent in production.
CAMAL- Confirming product before loading
  • CAMAL also offers advice on the best loading ports when procuring from China. CAMAL has done successful shipping from China, this puts CAMAL in a better position to advice the client the best port to use depending on the nature of the products being shipped.

What is the progress on China-Africa Cooperation?

There is great need to monitor the progress of China-Africa cooperation. In the recent past, people across Africa have been having different opinions concerning the benefit, losses and worries of China investing in Africa. CAMAL being on the forefront of procurement from China and investment advisory, the firm has been analyzing these relations closely since they started. The success of these relations will be realized by making Africa better in terms of development.

CAMAL’s Managing Director Mr. Walter Ruigu has a deeper understanding of China economy.  Being a first class procurement firm, CAMAL believes that  from a macroeconomic perspective , China-Africa trade relations continue to boom in both directions. The future of the trade looks positive because the two parties are complimenting each other.

  • It is true to say that the RMB depreciation against the USD has affected business in one way or the other . China has benefited because the exporters are working with RMB but they are being paid by USD which higher.
  • China market being one of the largest consumer of the soybeans from USA, has been suffering because of the high tariffs that USA has imposed on the produce. China is now looking for other sources where they can be getting the soybeans as an alternative to the existing problem. Africa however has not yet tapped the full potential of these supplies as the areas which produce this commodity is under the terrorists Boko Haram in Nigeria.
  • Russia is giving land to Chinese for them to be able to cultivate and export more to china. The existing trade war is changing the global supply chain.
  • Africa should work on quality and standard products if the exports from the continent will be  accepted in the Chinese market.
  • There are strict laws in China concerning what they are importing. Actually, if china gets faulty products, they can end the supplies  from that country because of a single firm which has not meet the standards. China has had these restrictions to protect the local industries. The restrictions do not necessarily affect Africa, the restrictions cut across the globe.
  • China just like any other country has companies that are producing with an aim of making profit.In China, there has been a mindset of targeting high volumes and low profits. There is also large fragmentation of Chinese private owned companies wanting to do business with Africa. Most firms are looking for specific projects and business opportunities.
  • There is a lot of competition from other countries i.e. Turkey, India and Russia especially for the industrial Chemicals; the depreciation of the RMB has made the prices competitive.
  • The reason why the numbers have gone down in from the macro perspective is China’s economy has shifted from one that was focused on fixed asset investment to one that is now focused on domestic consumption. Long before this happened, the commodities were moving from Africa to China to feed the economy. A good example is Angola which used to export petroleum to China but this has decreased but this situation does not mean the relations are worsening, this is only getting better.

You can listen to the whole interview and get more insight about the matter. Courtesy of Eric Olander for Africa-China reporting Project interview and Managing director

What will China gain from the growing cooperation with Africa?

The discussions in the recent past have been inclined on how Africa is set to fall in the “debt trap” which many people think is what China wants. Well this is not the case because it’s not 100% about Africa gaining from China. It goes without saying that, when two parties enter into an agreement of any sort, and then there are mutual benefits in that agreement. This happens to be exactly the same thing happening in the China-Africa cooperation. CAMAL has been attending the forums which are aimed at bringing a better continent with the Asian country.

Many people have continued to see the impact China is having in Africa in terms of development and poverty alleviation in Africa. Africa has been able to influence policy formulation in China thanks to the relations. If you want to fight any negative idea in a country you have to deal with the source of that problem first.  A good example of this is the when Africa became united and said it’s illegal to do ivory trading, China adhered to that and being one of the biggest market of ivory from Africa, then the elephants and rhinos are now safer than before.

China has been speculated to be colonizing Africa slowly by coming up with attractive monetary deals which will entice African leaders to allow China to invest in their countries. Mainly, China is pushing for the cooperation with Africa, for the following reasons,

  • Political connection with Africa. China knows that Africa represents over 50 votes in the United Nations and other international organizations.
  • China’s quest for new Markets. As the domestic market become saturated while more and more Chinese are going global, Africa represents a new market for the products produced.
  • As the Chinese economy continues to grow, there are certain products that Africa can provide depending on the demand from China. A good example is the Minerals from Africa. More Chinese are coming to buy Manganese and Marble from Africa and CAMAL has continued to connect the suppliers in Africa to the buyers in China. More and more suppliers are now trusting CAMAL to do the negotiations with china and bringing them buyers from China.

For those who are for the idea that China is out to colonize Africa, there is need to understand that the companies in China operate like any other Company in the world. The end product should bring profit to the company. This is the reasons why, companies in China are working closely with CAMAL to help them cut on cost by getting their raw material from Africa in order to ensure that the locals in Africa where the minerals are being mined benefit in one way or the other. If these relations were not for a good reason, then the number of countries in FOCAC would be less. From the previous engagements, only one country is not in the China-Africa cooperation.

China is set to adopt innovative technology which comes from Africa. A good example is the M-PESA innovation from Kenya. This technology has continued to wow other countries across the world, china being one of them. To support more of these innovations, China has established innovation centers in different parts of Africa where Chinese are offering different projects to the locals to see to it that they embrace the available technology from China.  This has mainly been happening in the Agricultural sector.

China has also benefited from Africa in terms of techniques of environment conservation. Due to industrialization in China, there has been an increase in the pollution levels making the cities in China a health threat. However china has visited some of the African countries such as South Africa which is one of the most industrialized countries in the continent and learns how they manage pollution in the country.

Generally we can say that both parties are gaining from the relations and if this continues in the future, China and Africa should have more benefits for each other. CAMAL continues to push for more exports from Africa to China; the firm believes that china should build more capacity in Africa to facilitate the standard they require because the resources are there. The procurement by China from Africa should not necessarily revolve on raw materials but also finished products. The best thing about the cooperation China is having with Africa is that it has brought competition among the super powers.  More European countries are now investing heavily in Africa to match what China is doing and this means more development for Africa.

You can watch the interview CAMAL’s Managing Director Mr Walter Ruigu had with CGTN about this topic

 

CAMAL’s Managing Director reviews the achievements of FOCAC2015

 

China- Africa cooperation has been going on for some time now. CAMAL’s Managing Director Mr. Walter Ruigu was spent some time to review the progress of FOCAC2015 which was held in South Africa. The theme was how to facilitate the movement or transfer of the industrial knowledge from China to Africa.

  1. From the macroeconomic perspective, the conference was successful because China stepped up the pledges from $20 billion to $60 billion which will be in different forms, they will increase financial funding to develop the SMEs
  2. China will offer more training support to African Students who will learn more about technology.
  3. From a company level FOCAC2015 could have done more as the attendance was mainly done by the Government state owned companies instead of firms from Africa. Africa should have more of these forums so that we can they can be a step in the same direction with China.
  4. China’s economy has been slowing down in that China has moved from economy that was based on investment and to fixed asset to domestic consumption. This means that Africa being a large trader in Commodity trading, the continent has been suffering from the economic fluctuation of the prices of these commodities.
  5. The Chinese manufacturing sector has been operating in over capacity i.e. the steel industry; this means there is need to move some of these industries in Africa. However, there is a lot of information which would help the industries in China to move to Africa. Many small medium enterprises are closing down because they do not know how to move to Africa because they do not have the regulations of the country they would want to move to.
  6. The companies in Africa need to engage with China at a macroeconomic level for them to benefit. Once the African companies engage with the big companies in China, definitely the issues of infrastructure will be addressed. China is able to integrate many companies to come up with one common industry.
  7. The market in china cannot be gauged by looking at the population, this is because of the difference in the consumption pattern and the marketing plans. African countries have to research more on Chinese market. Africa should focus on value addition so that export can be increase to China.

Comparing this with FOCAC2018, there has been an improvement as many companies came on board and attended the forum. Unlike in 2015, more countries are sending companies in china to carryout market research, procurement purposes and to get investors. CAMAL continues to be on the forefront to see that clients from African Continent get the best from china. CAMAL also continues to link more industries from China to the African market making it easy for entrepreneurs to source from China. The theme of these forums has been to see to it that Africa has achieved economic growth through these relations in the long-run.

Attached is a file with an audio where CAMAL’s Managing Director Mr. Walter sheds more light on what Africa needs to do for a smooth cooperation with China.

 

CAMAL attended F0CAC2018 in Beijing.

 

Forum on China-Africa Cooperation 2018 was held in Beijing where various Heads of State from Africa represented their countries in this forum. Chinese President Xi Jingping opened the forum on 3rd of September 2018. Most Africans were eager to know how their countries would benefit from these relations.  CAMAL attended the opening ceremony where Xi Jingping delivered a keynote speech at the opening ceremony of the 2018 Beijing Summit of the Forum on China-Africa Cooperation.

Africa Heads of states during FOCAC2018 in Beijing China

Chinese President Xi Jinping pledged $60 billion in financing for projects in Africa in the form of assistance, investment and loans, as China furthers efforts to link the continent’s economic prospects to its own. Some of what $60 billion will do can be broken down to:-

  • Xi said the figure includes $15 billion in grants, interest-free loans and concessional loans, $20 billion in credit lines, $10 billion for “development financing” and $5 billion to buy imports from Africa.
  • He added that he will encourage companies to invest at least $10 billion in Africa over the next three years.
  • Xi said China was planning initiatives in eight areas, including providing $147 million in emergency food aid, sending 500 agricultural experts to Africa, and providing scholarships, vocational training and trade promotion opportunities.
  • President Xi Jingping promoted Beijing’s initiative to build ports and other infrastructure as a tool for “common prosperity” in a world facing challenges from trade protectionism.
  • China will implement 50 agricultural assistance programmes, provide 1 billion of emergency humanitarian food assistance to African countries affected by natural disasters, send 500 senior agriculture experts to Africa, and train entrepreneurs in Agri-business.
  • China pledged it will implement 50 trade facilitation programmes for Africa, as well as undertake 50 projects for green development and ecological and environmental protection.
  • Tailor-made programmes to train 1,000 high-calibre Africans will also be put in place. 50,000 government scholarships and 50,000 training opportunities for seminars and workshops will be offered.
  • On the other hand, 50 medical and health aid programmes for Africa will be upgraded.
  • Xi said that we should build a China-Africa community with a shared future that promotes harmony between man and nature. The Earth is the only place which we mankind call home. China will work with Africa to pursue green, low-carbon, circular and sustainable development and protect our lush mountains and lucid waters and all living beings on our planet.

China has continued to push for cooperation with Africa to help the African states achieve economic independence in the long-run.This initiative has been achieved by financing projects in Africa. A good example is the infrastructure development where china has continued to bring modern technology in this sector. The presidents in attendance were positive that Africa was taking off towards a better future of economic growth.

CAMAL Group has been doing business in China for more than 8 years and has seen China’s economy grow overtime. FOCAC2018 has opened many opportunities where people from Africa will be  allowed to do business in China. CAMAL has helped some of it’s clients  get foreign investment from china hence creating a positive economic impact.

CAMAL will continue to bring serious investors to Africa and also help the African produce get market overseas. As Xi jingping finished his speech he  insisted by saying that there is need for China and Africa to work together in order to conserve the environment, CAMAL continues to push for environmental hygiene by organising trips where African countries can come to China and benchmark on environmental conservation and how china manufactures the waste treatment plants. With the growing African population, there is need to take care of the environment at all costs.

As the bond between China and Africa becomes stronger, there is need to evaluate  the economy and check the available opportunities in the market because Africa has untapped potential. There are many benefits which can be reaped by business firms, investors and organisations that are in their take-off stage matching towards economic independence. This phase will spearhead development in countries which will channel the loans for development purposes. We just hope that the loans will bring productivity because it is a debt which will be paid later even though president Xi Jingping said that China will write-off some loans for some countries depending on how the economy is doing.

 

CAMAL makes its entry into Ethiopian market

 

CAMAL’s MD, Walter Ruigu interviewed by Ethiopian Broadcasting Corporation on opportunities for Ethiopian companies in/with China

 

CAMAL saw a lot of opportunity in Ethiopia especially from the industrialisation drive from government.

China Trade Week Vice President Sean Xiao and CAMAL MD and Sales Manager at CAMAL’s booth. CAMAL sees Ethiopia as a key regional market

CAMAL looks forward to working in Ethiopia.

For any inquiries, please email: info@camaltd.com