Chinese exports to Eritrea rise to $37.7 million in 2006

April 17, 2007 (ASMARA) — China’s exports to Eritrea leapt 369 percent in 2006 to $37.7 million, the top Chinese trade diplomat in Asmara said on Tuesday.

Machinery for infrastructure and telecommunications projects were the main thrust of the increase, Zhou Geping, China’s economic and commercial counsellor for Eritrea, said in an interview.

“In 2005, the bilateral trade volume kept at a comparably low level. In 2006, China has overtaken and become the first commodity partner of Eritrea,” Zhou told Reuters without giving a comparative figure for Chinese exports to the country in 2005.

“It’s the speediest growth rate among the COMESA countries (Common Market for Eastern and Southern Africa) with China,” he added, referring to the 20-member trade body.

By comparison, Eritrean exports to the Asian giant were only $720,000, Zhou said.

In an effort to boost its fast-growing economy, China has been giving low interest loans, debt relief and other economic incentives to some of the world’s poorest but resource-rich economies without the normal hitches prescribed by Western aid.

Last year China loaned Eritrea $23 million to develop telephone systems, and in January, China’s Foreign Minister Li Zhaoxing partially cancelled Eritrea’s foreign debt during a visit.

COURTING AFRICA

Despite rapid growth following official independence in 1993, Eritrea’s economy has stagnated after a 1998-2000 border war with Ethiopia that killed 70,000 people.

Frustrated by the world’s failure to force Ethiopian compliance with a subsequent 2002 border ruling, Eritrea has been turning its back on many in the international community.

Analysts say Asmara is relying on mine operations for gold and other minerals — expected to begin in 2008 — to reverse the country’s economic problems.

Zhou said Eritrea went from a rank of eighteenth for China’s trade partners with COMESA countries to fifteenth in 2006.

“I hope that China-Eritrea cooperation including trade will reach a new level in 2007. From early this year until the end of February trade volume has already reached $12 million,” Zhou said.

Trade links between fast-growing economic powerhouse China and Africa have taken a leap forward, with trade jumping 40 percent last year to $55.5 billion.

In January, Beijing said it would lend the continent $3 billion in preferential credit over three years and double its aid and interest-free loans.

Some Western observers say China’s growing role in Africa helps support dubious governments, and also risks plunging some countries in the continent into another vicious circle of indebtedness.

(Reuters)