Editor's note: Shen Shiwei is a research fellow of the Charhar Institute and former government relations and business consultant for Chinese enterprises overseas investment. The article reflects the author's opinion, and not necessarily the views of CGTN.
China is Angola's largest trading partner while Angola is China's second largest trading partner in Africa. As for today, China-Angola bonds are far beyond economic engagement.
'A help in need is a friend indeed'
The 35 years of China-Angola diplomatic ties date back to pre-independent Angola.
The Forum on China-Africa Cooperation (FOCAC) - Round Table Conference at the Great Hall of the People in Beijing, China, September 4, 2018. /VCG Photo.
When China and Angola re-launched economic cooperation, Angola was almost destroyed by its 27-years of civil war.
To rebuild the nation, Angola needed huge financial and technical input and to finalize its heavy debt burden to Western countries during its bloody civil war. But Angola's efforts to seek financial support from the Paris Club did not yield the desired results.
When Western countries shut the door, China gave a helping hand, and agreed to finance Angola's national reconstruction project and became Angola's industrial accelerator.
With Chinese financial and technology support, Angola has rebuilt much of its urgently needed infrastructure – from roads, bridges, railways and airports to hospitals, schools and housing which were destroyed during the civil war.
To solve an acute shortage of housing and to promote socio-economic development, the first phase of Kilamba Kiaxi, a 3.5 billion US dollar social housing project on the southern suburbs of Luanda, was constructed by China's CITIC Construction Co.
Driven by a booming oil industry, Angola registered a double-digit economic growth, making it one of the fastest growing economies in Africa in its post-war reconstruction.
The 1,344-kilometer Benguela Railway built by China Railway Construction Corp has reconnected Angola's Atlantic port of Lobito on the west to the eastern border town of Luau, as well as to rail networks in the Democratic Republic of the Congo, Zambia and beyond. The railway is the fastest line in Angola.
All these contributed to the commercial model of oil for credit finance, which is quite mature in the international financial market.
Chinese finance and technology have accelerated Angola's booming oil industry. Since 2007, Angola became Africa's top oil producers and a member of OPEC. In return, the oil guaranteed Angola sovereign fund and international finance could inject more funds to other related sectors. Today, Angola is standing at a critical stage of economic rebuilding and industrialization.
Helping in Angola's diversified transformation
An abundant natural resource is a double-edged sword in national development.
As oil accounts for more than 95 percent of Angola's exports and government revenues. With a steep fall in oil prices in recent years, the Angolan economy has been hit hard. Angola's currency and external debt face mounting pressure.
Chinese railway workers interact with villagers while taking a break from work in Luanda, Angola, April 1, 2007. /VCG Photo.
Although the oil price has rebounded recently, Angola does need to diversify its economic structure and increase manufacturing capacity. The government is hoping to improve the business environment and attract foreign direct investment in its non-oil sectors so as to increase productivity.
As for China-Angola non-oil sector cooperation, agriculture is one of the priorities. Angola is a large importer of foods, even though it has abundant fertile land. China-Angola agricultural cooperation can reduce its costs of importing foods, rebuild Angola's agricultural system and improve its food security.
The Longa Rice Planting Agro-Industrial Farm, Camacupa Agro-Industrial Farm, and Cuimba Agro-Industrial Farm agreed by China CAMC Engineering Co., Ltd and the Angolan Ministry for Agriculture, Rural Development, Fishing, and the Environment have introduced the advanced farming business model that plants mostly maize, soybean, rice, and wheat.
The agricultural investment has helped the Angolan government become less reliant on its oil industry. Chinese investment is ready to share its advanced irrigation storage, processing, and other suitable agricultural technologies and management experience. In October 2016, an agreement on Chinese aid China-Angola Agriculture Demonstration Center was inked.
Luanda Bay, Angola /VCG Photo.
Besides that, Angola has the potential to become a successful model for Sino-African industrial cooperation. In the years to come, Angola's non-oil sector is projected to grow faster than the oil sector.
As for financing cooperation, the Bank of China has launched its new branch in the capital, Luanda, to serve Chinese enterprises in the country while supporting Angolan businesses to develop the Chinese market at the same time.
Multiple mechanisms to inject more momentum
Beyond bilateral coordination mechanisms, China has strengthened its economic, trade and investment cooperation with Angola via multilateral frameworks like the Forum for Economic and Trade Cooperation between China and Portuguese-speaking countries (Macao), known as Forum Macao, in recent years.
The forum has been dedicated to enhancing interconnection among China and Portuguese-speaking countries (PSCs) in various sectors. Angola is one of the main destinations for Chinese investment.
Vehicles produced in China are exported from Lianyungang port to Angola, February 25, 2017. /VCG Photo.
In October 2016, during the 5th Ministerial Conference of the Forum held in Macao, China announced that it would adopt 18 new measures in the next three years to boost relations between China and the PSCs in such sectors as production capacity, infrastructure, maritime cooperation, cultural exchanges, as well as training.
At present, both China and Angola implemented anti-corruption efforts to improve good governance. The Angolan government led by President Joao Lourenco is trying its best to rid itself of corruption.
Therefore, frequent sharing between Angolan ruling party, the People's Movement for the Liberation of Angola (MPLA), and the Communist Party of China, is quite essential in strengthening leadership in economic and social transformation.
It is for sure that Angolan President Joao Lourenco's visit to Beijing shortly after attending the Beijing summit of the FOCAC this September will help upgrade the strong bonds.
(Cover: Chinese railway workers put tracks in Dondo, Angola, April 4, 2007. /VCG Photo. )
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