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Growing China Commercial Presence in Africa, and U.S. Absence, Presents New Challenges

FOR IMMEDIATE RELEASE October 16, 2007

Media Contact Name/Phone: 

Marianna Ohe (202) 565-3200

WASHINGTON, D.C. -- China's growing commercial presence in Africa, and low participation by U.S. companies in the region, present critical challenges to U.S. commercial interests, panelists at a meeting of the Sub-Saharan Africa Advisory Committee (SAAC) of the Export-Import Bank of the United States (Ex-Im Bank) agreed during a public forum at the Bank's headquarters here.

But the panelists also said that U.S.-China-Africa cooperation, to build a framework ensuring Africa uses its resources for economic development, would benefit all trade participants in the region. They asserted that marketing efforts to teach American companies the benefits of doing business in Africa, and steps to enhance the competitiveness of Ex-Im Bank financing, also would help U.S. interests.

Panelists included moderator James H. Lambright, Ex-Im Bank chairman and president; Witney W. Schneidman, president, Schneidman & Associates International, and director, Africa-China-U.S. Trilateral Dialogue Study; Daeman Harris, vice president, Middle East and Africa, U.S. Chamber of Commerce; and Anthony Carroll, vice president, Manchester Trade, Ltd. Also participating in the discussion were members of Ex-Im Bank's SAAC, U.S. exporters, and African public and private sector representatives.

It is important that the United States, China and Africa understand each other so that we may work together to ensure that our trade activities benefit exporters, African buyers and our national interests, Lambright said.

He noted that China-Africa trade is growing much faster than U.S.-Africa trade. In 2006, China-Africa trade totaled $56 billion while U.S.-Africa trade totaled $100 billion, of which $80 billion were African sales to the U.S. In five years, total trade between China and Africa is expected to reach $100 billion.

Schneidman said the Africa-China-U.S. trilateral dialogue, in the course of three meetings over the past year-and-a-half, concluded there is no strategic conflict between the U.S. and China: The fact that the U.S. and China are business competitors is not a negative. It can result in new technologies and skills being brought to Africa, and jobs created there. Africa can benefit from trade with all countries, especially the U.S. and China, to generate revenues to contribute to economic development and stronger institutions.

Schneidman said his organization is working on mechanisms to foster cooperation between the U.S., China and Africa. This could include a permanent trilateral body to address trade, financing and other issues; stakeholder working groups to train Africans and introduce new technologies; and forums to address development, peace and security issues. Global interest in Africa has never been higher, and Africa needs to seize this attention for its long-term benefit, Schneidman said.

The Chamber's Harris noted China's aggressive export promotion in Africa, often linking the purchase of Chinese goods and services to the building of roads and other infrastructure. He called for greater engagement by U.S. companies in Africa, and warned of some negative aspects of Chinese exports, including counterfeit products and theft of intellectual property.

Carroll of Manchester Trade, Ltd., saw China's 20-30-year financing terms and other aggressive marketing strategies as a real threat to U.S. commercial interests. But he added, Here's the good news: Africa's rapid growth offers new opportunities; the U.S. enjoys technology dominance in areas including aviation, transportation and environmental exports; and we can look for new ways to collaborate with China on our respective strengths.

Carroll called on the U.S. and Africa to hold China accountable for leveling the playing field by observing World Trade Organization (WTO) rules, and maybe also the OECD (Organization for Economic Cooperation and Development) rules.

Ex-Im Bank Vice Chair Linda Conlin also stressed the urgency of doubling our efforts to get more U.S. companies to Africa.

Jim Cruse, Ex-Im Bank senior vice president, Office of Policy and Planning, said efforts are underway to improve Ex-Im Bank's financing competitiveness due, in part, to SAAC proposals that were included in Ex-Im Bank's 2006 Competitiveness Report to the U.S. Congress: These proposals shed a light on issues that has facilitated incremental progress.

For example, Cruse noted that many ECAs are coming to share the SAAC's concern with the inability to charge fees for solid corporate borrowers that are lower than sovereign (government) fees.

Ex-Im Bank, the official export-credit agency of the United States, is in its 73rd year of helping finance the sale of U.S. exports, primarily to emerging markets throughout the world, by providing loan guarantees, export-credit insurance and direct loans. For more information, visit www.exim.gov.