Chinese president Xi Jinping attended the 2018 Beijing Summit of the Forum on China-Africa Cooperation (FOCAC) this week. Xi pledged to fully deliver the $60bn in pledged loans and promised an additional $60bn, while also raising the prospect of debt forgiveness for the most financially challenged countries in the African continent.
Before the FOCAC, Xi also met António Guterres, the United Nations secretary general, on September 2, Chinese state media reported. Xi called the UN the "flag of unilateralism", adding that a stronger UN would shield the world from rising unilateralism and protectionism. He did not refer to the US directly or to the ongoing tit-for-tat war of tariffs between the two countries.
He also seemed to address criticisms of China's lending practices in Africa.
"We will make unremitting efforts and do a good job as long as we believe it benefits African countries and people," Xi said.
In the opening speech at the FOCAC, he made new pledges, including an industrial promotion initiative, an infrastructure connectivity initiative, as well as facilitating African entities' funding access to China’s market and Chinese financial institutions.
"We will facilitate bond issuance by African countries and their financial institutions in China," said Xi. "On the basis of following multilateral rules and procedures, we will support African countries in making better use of financing resources of the Asian Infrastructure Investment Bank, the New Development Bank and the Silk Road Fund."
Chen Siqing, chairman of Bank of China, hosted a number of top African heads of state during the visit for the FOCAC, including Burkina Faso president Roch Marc Christian Kaboré, according to a September 3 press release. The statement noted that the bank has already established operations in seven African countries, namely South Africa, Zambia, Mauritius, Angola, Kenya, Morocco and Tanzania, and that Bank of China has a Rmb32bn ($4.7bn) balance of corporate loans in Africa.
Economic relations between China and Africa have increasingly been in focus. China has become Africa's largest economic partner, with trade growing in nominal terms by 20% a year since 2000, and foreign direct investment growing by 40% a year, according to an article by Miriam Altman, a member of South Africa's National Planning Commission, published in Chinese state media on September 5.
Industrial and Commercial Bank of China's $5.5bn acquisition of a 20% stake in South Africa's Standard Bank in 2008 was the largest single FDI transaction by China in Africa to date. However, the article also noted that China and South Africa are increasingly competing for exports to the rest of the continent, where China has pulled ahead in exports in particular to the Sub-Saharan region, where it now accounts for 25% of imports from the region, versus South Africa's 17%.
"More balanced trade must be a top priority for both parties," said Altman. "Access to Chinese markets will also be important."
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AmCham HK published a letter addressed to the Hong Kong government on August 31. The document states that for Hong Kong to fit China's evolving global role it needs a "well thought positioning , communication and execution strategy".
AmCham HK said some of Hong Kong's initiatives hold promise, including the plans for Greater Bay Area integration, an area that includes Hong Kong, Shenzhen and several cities of China's southern Guangdong province. But it also chastised the local government on political issues.
"While AmCham has celebrated the successful implementation of 'One Country, Two Systems' over the past 20 years, there is a lack of understanding of the framework both at home and abroad that must be addressed," the statement read. "AmCham’s business sentiment survey published in May this year found a widespread perception that Hong Kong’s core values — in particular, press freedom, free speech and an unbiased judiciary — are being eroded."
The organisation also addressed Hong Kong's position in the budding trade war between China and the US, stating that the city can remain an important partner of the US in trade and investment.
"Given this key relationship, AmCham believes that Hong Kong will weather the trade storm, aided by an increase in dialogue. We would like to see more higher-level exchanges between the United States and Hong Kong to foster understanding and build on our shared values. AmCham would warmly welcome and support a visit by the chief executive to the US in the near future to promote Hong Kong."
As for the financial sector, AmCham HK noted that the Stock Connect and Bond Connect have been helpful developments, but that member organisations expect more.
"[I]nvestors are eagerly awaiting additional access opportunities – in particular, the inclusion of additional securities and the launch of IPO Connect and ETF Connect platforms. However, we strongly recommend consultation with international market participants in Hong Kong regarding global best practices to ensure that both risks and potential unintended consequences are fully assessed before any announcements are made."
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The HKEX reminded market participants active on the Stock Connect to be prepared for the implementation of investor ID requirements on September 18, according to a September 4 circular. The requirements will see market participants provide the mapping date of broker-to-client assigned numbers, and client identification data for the brokers' clients, the exchange said.