China-Africa Summit -- Opportunity for growth in Africa

November 8, 2006

At the weekend Summit of the Forum on China-Africa Cooperation (FOCAC), leaders of 48 of the 53 African countries gathered in Beijing to solidify a strategy of mutual cooperation. Chinese and African businesses signed 14 agreements that totaled $1.9 billion. China also extended $5 billion in loans, agreed to forgive past debts, and will double its aid to Africa by 2009. In addition, a joint China-Africa Chamber of Commerce will be set up to facilitate business.

What It Means:

This was the highest level conference between African and Chinese leaders ever. China’s interest in Africa is clearly to gain preferential access to natural resources, including oil. In return, African countries will benefit from China’s training and support for their entrance into the World Trade Organization. This strategic alliance will provide mutual economic growth for all emerging market countries involved.

Action Steps:

For the average investor, the stock markets in China or any African country are not regulated enough to warrant investment in a particular company. Therefore, the best way to capitalize on the growth that these agreements will foster would be to invest in a good South Pacific or emerging markets fund. Check with your financial planner to find one that meets your needs.

Source: China Online People’s Daily web site