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Last Updated: Friday, 6 January 2006, 12:38 GMT
China-Africa trade jumps by 39%
Oil pipeline
China has invested heavily in African oil
Trade between China and African nations jumped 39% to $32.17bn (18bn) in the first 10 months of last year, official Chinese customs figures have revealed.

Representing a record high, analysts said the surge was fuelled by China's increased imports of African oil, most notably from Sudan.

Africa is also buying more Chinese-made goods, the figures show.

China is investing heavily in African oil exploration to help meet its rapidly-growing consumption.

In 2003 it overtook Japan to become the world's second-biggest consumer of petroleum products after the US.

The US Energy Information Administration (EIA) adds that China accounted for 40% of the total growth in global oil demand over the past four years.

African investments

According to the figures for the first 10 months of last year, China's exports to Africa totalled $15.25bn, while the country's imports from Africa were $16.92bn.

Africa has become more important for China as a source of the raw materials needed by the Chinese manufacturing sector
Duncan Innes-Ker, Economist Intelligence Unit

Yu Yingfu, an official from the Chinese Ministry of Commerce, said China-Africa trade had increased since the start of a new era of cooperation that began with 2000's China-Africa Forum.

Since then China has scrapped tariffs on 190 kinds of imported goods from 28 of the least developed African countries, and Chinese firms have greatly increased investments in Africa - most notably in the oil sector.

In the first 10 months of 2005 alone, Chinese companies invested a total of $175m in African countries, according to the official figures.

Chinese firms are also taking on significantly more construction projects in Africa, most notably infrastructure works.

Some analysts say China is doing this to aid trade and the movement of goods.

'Less constrained'

"Africa has become more important for China as a source of the raw materials needed by the Chinese manufacturing sector," said Duncan Innes-Ker of the Economist Intelligence Unit.

"Oil is central to this, primarily Sudanese oil and trying to develop new oil sources in West Africa.

"In terms of Sudan, it is needs to be seen as the biggest producer of African oil outside of Nigeria."

Mr Innes-Ker added that China was well ahead of Western nations regarding Sudanese oil contracts.

In light of the ongoing violence and human rights concerns in Sudan, he speculated that "Chinese firms are a little less ethically constrained" than their Western counterparts.

Mr Innes-Ker added that Chinese textiles and clothing firms were also investing heavily in Africa at the moment as a way to get around US and European Union limits on Chinese exports in this sector.


SEE ALSO:
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20 Dec 05 |  Business
China to maintain 'rapid growth'
29 Nov 05 |  Business
China unveils new growth model
12 Oct 05 |  Asia-Pacific
China's global hunt for oil
09 Mar 05 |  Business


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