International Affairs Forum
“China did not, does not and will not impose its will or inequality on other countries, as well as do anything that will harm the Africa people” President Hu Jintao of China on a visit to South Africa at the University of Pretoria in February, 2007 (Zhiqun Zhu, 2010).
Despite the long distance, cultural and socio-economic differences between Ghana and China, both countries have worked to deepen cooperation in various fields, enhanced the existing cordial relations between their governments to the mutual benefit of their people.
Relations between the People`s Republic of China and Ghana date back to 1960 when the two countries first established diplomatic relations. Since then Ghana has provided substantial diplomatic support to the People`s Republic of China which has also reciprocated with material and financial support for Ghana's development. In the 1960s Ghana`s first President, Osagyefo Dr. Kwame Nkrumah lobbied for the People`s Republic of China's reinstatement in the United Nations.
President Nkrumah also supported the People`s Republic China during the China-India War in 1962. The overthrow of Dr. Kwame Nkrumah`s government in 1966 led to the withdrawal of around 200 Chinese aid workers and embassy staff in Accra by the Chinese government in Beijing. Bi-lateral relations were restored in January 1972, the National Redemption Council took various steps to normalize Ghana’s relations with China, and diplomatic relations were restored on 29th February, 1972.
China`s rise to economic prominence as a result of it`s rapid and consistent economic growth, its position as the second largest economy in the world, its huge population, market size and vast accumulation of foreign exchange reserve over the years have raised more questions than answers. The demand for raw materials, food crops and enough energy to power the manufacturing base of the resurging Chinese economy has dire consequences on the global economy and sub-Saharan African countries, Ghana inclusive as they serve as a raw material supply hub for China.
It is expected that the resurging economic growth in China would contribute to increase in investment opportunities in the consumer, agricultural, industrial, banking and logistics sectors. However, the developmental prospects of other economies may rather suffer as a result (Tsikata et. al, 2008).
China’s economic prosperity has resulted in a renewed confidence in its leadership to engage the outside world, a position that China has not been in for six centuries. China is assertively engaging with the global political economy, including that of the African continent. In October 2000, Beijing launched the Forum for China-Africa Cooperation (FOCAC) to elevate its relations with Africa and utilize the Forum as a platform with which to coordinate Chinese foreign policy toward the continent (Davies et. al. 2008).
This paper utilizes secondary data from the Middle East and Asia Bureau of the Ministry of Foreign Affairs of Ghana, Ministry of Foreign Affairs of China, the Embassy of Ghana in China, Beijing, news reports on media outfits in Ghana and China on the internet and other sources. There is a lot of well documented literature on China-Africa and China-Ghana relations by several authors which have been reviewed in the course of writing this paper (Davies et. al., 2008; Tsikata et. al., 2008; Idun-Arkhurst & Laing, 2007; Zhu, 2010 e.t.c).
The paper is structured as follows: Section gives an introduction and an overview of the demographic and economic features of the two counties. Section 2 deals with political trade and economic relations, Section 3 discuses Chinese government`s aid, development assistance, debt relief and Cultural Section 4 discusses the challenges ahead and Section 5 which is the final section will be the summary and conclusions.
2.0 Diplomatic ties between China and Ghana
Table 1: Demography and economic characteristics of the two countries
PEOPLE`S REP. OF CHINA
Head of State H. E. Hu Jintao H.E. Prof. J.E Atta-Mills
Capital city Beijing Accra
Independence 1st October, 1949 6th March, 1957
National Day 1st October 6th March
Location East Asia West Africa
Population 1,338,299,512 (2010 est.) 24,391,823 (2010 est.)
Total land size 9,596,961 sq km 238,540 sq km
Income level Upper Middle Income Lower middle income
GDP (current) $5,878,629,246,676 $31,305,891,329 (2010)
GNI per capita, Atlas method $4,260 $1,230 (2010)
FDI (net inflows) 185,080,744,436 (2010 est.) 2,527,350,000 (2010)
GDP growth 10.3% 7.7%
Source: The Wold Bank (www.worldbank.org)
The table above presents historical and recent facts about China and Ghana. This provides a brief description of the differences between the two countries. While the Peoples’ Republic of China attained her political independence in 1949, Ghana had her political independence eight years later. Geographically, China`s land mass and population size far outweighs that of Ghana. While the China is classified as an upper middle income nation, with the GNI per capita of four thousand, two hundred and sixty US dollars, Ghana is classified as a lower middle income nation with the GNI per capita of one thousand, two hundred and thirty US dollars.
2.1 Political relation
Ghana established diplomatic relations with the People’s Republic of China in 1960. The first Chinese Ambassador to Ghana, Mr. Huang Hua, presented his Credentials on 5th July, 1960, while the first Ghanaian Ambassador to China, Mr. Kobina Kessie, assumed duty in Peking on 26th March, 1961.
Ghana’s active co-operation with the P.R China is also reflected in the consistency with which Ghana has followed a policy of recognizing only one China policy, i.e. the People’s Republic of China. Ghana fully supported the People’s Republic of China to retain its UN seat in 1971 and also supported the People`s Republic of China during the Sino-Indian War in 1962.
Since then, there have been other conscious efforts on both sides aimed at ensuring healthy and mutually beneficial political exchanges. The result of which is the celebration of fifty years of diplomatic relations between the two countries last year (2010). The benefits of these five decades of political relations can be felt in almost all other sectors of the Ghanaian economy as would be discussed in the latter part of this paper.
2.2 Exchange of High Level Visits
Ghana after independence in 1957 from British colonial rule, under its first President, Osagyefo Dr. Kwame Nkrumah, enjoyed close friendly relations and active political cooperation with China. The relations were marked by frequent exchange of state visits which are the highest form of diplomatic contact between two nations, and are marked by ceremonial pomp and diplomatic protocol. Dr. Nkrumah personally paid three visits to China in 1961, 1964 and 1966. During these visits he established personal friendships with former Chinese Leaders, Chairman Mao Zedong and Premier Zhou En-Lai.
The change of Government in Ghana in February 1966, however, resulted in the suspension of diplomatic relations with China for six years. With the overthrow of the Busia Administration in January 1972, the National Redemption Council took various steps to normalize Ghana’s relations with China, and diplomatic relations was restored on 29th February, 1972.
The two countries have nurtured and built on the strong friendly relations from the time diplomatic relations were restored to the mutual benefit of citizens on both sides. Two surviving Ghanaian Heads of state and the sitting Head of state, their Ministers and other Government functionaries have paid uncountable number of official visits to China which have yielded positive benefits to the people of Ghana. Details of official and diplomatic visits undertaken by the Ghanaian are as below;
Former President, Jerry John Rawlings paid a state visit to China in September, 1985. He visited again in December, 1995 as part of a 3-Nation tour to the Far East. He held discussions with senior Chinese Government officials, including the former President Jiang Zemin, and a number of agreements were signed between Ghana and China;
In August 2003, a ten (10)-Member delegation from the Parliamentary Select Committee on Foreign Affairs paid a week-long official visit to China at the invitation of the National People’s Congress (NPC) of China;
The former Minister of Defence, Dr. Kwame Addo Kufuor, MP, led a four (4)-Member delegation to China on an official visit at the invitation of his Chinese counterpart, General Zao Ganchman, in 2003;
Former President, J. A. Kufuor paid a week long state visit to China from 27th October to 3rd November, 2003, as part of a two nation tour of the Far East. During the visit, he held fruitful discussions with former President Jiang Zemin and Prime Minister Zhu Rongi;
In June 2006, the former Minister for Foreign Affairs, Nana Akufo-Addo, MP, paid an official visit to China during which he held bilateral talks with his Chinese counterpart, Mr. Li Zhaoxing President J.A. Kufuor was also in Beijing for the Olympics games in 2008 as an official guest;
In September 2006, the late Kwadwo Baah-Wiredu, then Minister for Finance and Economic Planning, led a multi-sectorial team to China;
In November 2006, former President J.A. Kufuor again led a delegation to participate in the Sino-Africa Summit. During the visit, he met with the Chinese authorities to finalize arrangements for the construction of the Bui Dam to which is expected to generate additional 400Mega Watts of electricity to Ghana 2000 Mega Watts as at now;
In September, 2010, President John Evans Atta Mills paid a state visit to China at the invitation of his Chinese counterpart, H. E. Hu Jintao which offered fresh opportunities for up-scaling the existing bilateral relations between the two countries to a higher pedestal;
A nine (9)-member Parliamentary Select Committee on Foreign Affairs from Ghana paid a working visit to their counterparts in China in the second week in August, 2011.
Former President Osagyefo Dr. Kwame Nkrumah`s visits to China in 1961, 1964 and 1966 were reciprocated by a visit to Ghana by then former Chinese Premier, H.E. Mr. Zhou En-Lai to Ghana together with the then Foreign Minister Chen Yi in January 1964 as part of an African tour. China has dispatched a number of high level government and diplomatic officials to confer with their Ghanaian counterparts.
The table below shows some of the notable personalities from China that have visited Ghana on official assignments after H.E. Mr. Zhou Enlai`s 1964 visit;
Government Delegate Political Portfolio Year of Visit
H.E. Mr. Geng Biao Vice Premier October, 1978
H.E. Mr. Huang Hua Vice Premier and concurrently Foreign Minister December, 1981
H.E. Li Peng Former Chinese Premier October, 1986
Mr. Yang Fuchang Assistant Foreign Minister 1989
H.E. Mr. Qian Qichen State Councillor & Foreign Minister January ,1992
H.E. Chen Muhua Vice Chairwoman of the Standing Committee of the National People's Congress (NPC) and also the Chairwoman of All-China Women's Federation April, 1996
H.E. Mr. Tang Jiaxuan, Former Chinese Foreign Minister June, 1998
H.E. Hu Jintao President February, 1999
H.E. Mr. Wu Yi, Then Vice President, Vice-Premier January, 2000
H.E. Mr. Xu Jialu, Vice Chairman of the NPC Standing Committee May, 2001
H.E. Mr. Yang Wenchang, Vice-Minister of Foreign Affairs June, 2002,
H.E. Hu Jintao President 2003
H.E. Mr. Wei Jianguo, Vice-Minister of Commerce in March, 2004
Dr. Zhou Xiaochuan Governor of the People’s Bank of China February, 2005
H.E. Mr. Li Jinzhang, Assistant Minister of Foreign Affairs 2005
H.E. Wen Jiabao Chinese Premier June, 2006
H.E. Mr. Jia Qinglin Chairman of the Chinese People’s Political Consultative Conference (CPPCC) April, 2007
Mr. Wei Zhang Vice-Chairman of the China
Council for the Promotion of International Trade March 2009
Mr. Fu Cheng Yu Chief Executive Officer of CNOOC
The Chinese Minister for Commerce Mr. Chen Deming paid an official visit to Ghana from 15th to 17th February, 2011. During the visit, he and his delegation held fruitful discussions with the competent officials of the Ministry of finance and Economic Planning as well as the Ministry of Trade and Industry. The delegation also paid a courtesy call on H.E. the President, Prof. John Evans Atta Mills;
The Director General for African Affairs of the Chinese Ministry for Foreign affairs, Ambassador Lei Shaye led a delegation to Ghana in March 2011 to conduct Political Consultations between the two Foreign Ministries;
Chinese Parliamentary delegation led by Hon. Zhou Tienong, Vice Chairman of the Standing Committee of the National People’s Congress of China was in Ghana in the second week of November, 2011. During the visit the Vice President, H.E. John Dramani Mahama granted audience to the delegation on 11th November, 2011. The delegation held discussions with their counterparts at the Parliament House same day;
China and Ghana have exhibited true friendship during the fifty (50) years of relations which have culminated in a number of agreements between the two countries, notable among them is diplomatic cooperation; the two countries have agreed to support each other in issues concerning sovereignty and territorial integrity. The most important facet of this agreement is Ghana`s adherence to the “One China Policy” which sees Taiwan as an inalienable part of the People`s Republic of China.
This agreement forms the basis of all bilateral and cooperation since China refuses to maintain diplomatic (as well as economic) ties with any country that recognizes Taiwan as an independent nation. China and Ghana have also agreed to explore means of greater cooperation at the United Nations, World Trade Organization and other international and regional organizations (Tsikata et. al., 2008)
3.0 Trade and economic relations between the P.R China and Ghana
Economic relations between Ghana and China date back to the early 1960s when the two countries established diplomatic relations. However, Chinese projects were summarily abandoned in 1966 when Ghana`s first President Dr. Kwame Nkrumah’s Government was overthrown. Relations were restored in 1972 and attempts have been made since to re-habilitate some of the projects and China has since been providing both technical and financial assistance in the form of loans and grants to support the socio-economic development efforts of Ghana.
China`s financial assistance packages to Ghana in the framework of bilateral cooperation covers the most important and crucial sectors such as health, food and agriculture, education, defence, culture, roads and building industry. This section looks at trade, investment and technical and financial assistance and debt relief to Ghana.
China demonstrated commitment to Ghana`s economic development. This reflects the statement made by Chinese President, Hu Jintao on a visit to South Africa as stated in Zhu (2010);
“Unlike former colonies, that treated Africa in a condescending way, China considers itself part of the developing word. The new strategic partnership with Africa is based on political equality and mutual trust. Says President Hu Jintao, and economic cooperation between China and Africa is a “win-win”.
3.1Bi-lateral trade between the P.R China and Ghana:
Bilateral trade between China and Ghana has been positively skewed in favour of China; this is evidenced by the huge trade deficit of -1,113.88 in the name of Ghana. Ghana’s imports from China include light industrial manufactured products such as motor vehicles and part, machinery and parts, bicycles, pharmaceutical products, household goods, electrical products, food items (rice, tea, e.t.c), sports goods, stationary, chemicals, clothing, textiles and other assorted goods and exports primary and semi-processed products such as cocoa beans and timber, wood products, copper scrap, lead scrap, fishing nets, natural sheets, aluminium scrap, veneer sheets, assorted handicrafts, Shea nuts, brass scrap, cashew nuts, common salt, shark fins and zinc waste/ scrap. (Ghana Embassy, Beijing)
According to a news item attributed to Xinhua News Agency (www.china.org.cn), China was Ghana`s fifth trading partner In 2003. However, data from the Ministry of Commerce of the People`s Republic of China (MOFCOM) and the International Monetary Fund (IMF) indicated that in 2010 apart from the European Union (EU) China is the Ghana`s second trading partner in terms of trade volume. Imports from China in 2010 represented 17.6 percent of total imports, greater than imports from the United States of America which stood 8.9 percent and imports from the European Union`s 25 percent of total imports.
Bilateral economic and trade volume between China and Ghana in 2010 hit US$2.06 billion breaking through US$2.0 billion for the first time and up by 27.5 percent year on year basis. At a recent trade and investment fair to promote trade between Ghanaian businesses and their Chinese counterparts in Accra, the Chinese Economic and Commercial Counsellor at the Chinese in Ghana projected that trade between two nations to hit an all time high of US$3.0 billion at the end this year, 2011.
A study of the bilateral trade between the two countries indicates that exports to China from Ghana are made up of raw materials relatively low. On the other hand, China exports a lot of manufactured products to Ghana some of which could have been produced in Ghana. This obviously impacts negatively on the industrial sector of Ghana since most of the manufactured products from China are relatively cheaper, in view if this, a lot of wholesalers, retailers and consumers prefer “made in China” products to Ghanaian manufactured products.
The local industries which originally are poorly resourced in terms of machinery, technology and finance are subjected to stiff competition both internally and external which at the end of the day impacts negatively on the industrialization drive of the Ghanaian economy. Ghana and China have resolved to boost trade ties and make it balanced. Ghana is expected to take advantage of China` s decision to open up its markets to African products, China has increased the number of export items that qualify for zero tariffs from 190 to 440 (Tsikata et. al, 2008).
The important role of trade has long been established by Adams Smith in 1776 in his book “The wealth of nations” which many regard as the beginning of economics as a discipline (Krugman & Wells, 2009). According to Adam Smith, “people can get more of what they want through trade than they could if they tried to be self-sufficient”. I call on Ghanaian authorities to pursue a trade policy that seeks to identify areas where it has comparative advantage in order derive optimum benefits from its trade with China.
3.2 Investment opportunities between the P.R China and Ghana:
It is a stated policy of the government of China to encourage and support investment in Africa, including through the provision of preferential loans and buyer credits (China, 2006). A greater part of Chinese foreign direct investments have gone to major oil producing countries like Angola, Nigeria, Libya, Sudan e.t.c. Meanwhile Ghana, Tanzania, Senegal and other non-major oil producers have not been let out entirely.
The government of Ghana has been on a drive to attract foreign direct investment (FDI) into the Ghanaian economy to serve as a catalyst for economic growth. The economy of Ghana experienced stagnation for almost three (3) decades after the overthrow of the government of Dr. Kwame Nkrumah in 1966. Attempts to put the economy on sound footing has seen the country gone through a series of economic reforms from the early 1980s up to 1992 when multi-party democracy was restored.
Successive governments after 1992 have pursued vigorous investment friendly policies to attract foreign investment which has been proven by many economists to have the potential to help bridge the gap between savings and investment in capital-scarce economies, brings with it modern technology transfers, generating employment and proven effective in promoting growth and productivity in countries that have enough skilled workers and infrastructure.
Securing Chinese investments has been at the core of every presidential and official Ghanaian delegation that has visited China. Ghana`s priority investment areas are oil and gas services, energy, infrastructure, agriculture and agri-business, manufacturing and industry, tourism, information technology, health and financial services, e.t.c. China is one of ten (10) countries selected by the Ghana Investment Promotion Centre (GIPC) for increased and focused investment generation activity under its Investor Targeting Strategy.
With China`s “open reform” policy and “going global” strategy adopted in the 1980s coupled with its remarkable economic growth and might, Chinese companies are encouraged to invest abroad. The strategy also seeks to encourage Chinese firms to “cut their teeth” in international markets and enhance China`s global power status (africapractice, 2007).
Chinese investment in Ghana has increased significantly over the past decade. Most of the investments are mostly in agriculture, manufacturing, general trading, tourism, construction and engineering works. The influx of direct investment from China has witnessed the registration of more the Chinese companies in Ghana, notable amongst them are; Huawei, Sino Hydro Corporation, China Building Engineering Corporation, China Hydraulic Engineering and Power Company for Foreign Business, China Telecommunication Construction Corporation, Guangzhou International Company and Shaanxi Building Engineering Corporation, China National Offshore Oil Cooperation (CNOOC), Shenzhen Energy Group e.t.c.
China`s non-financial direct investment in Ghana at the end of 2010 was US$219 million while its contractual value of contracted projects and labour services for the same period amounted to US$4.53 billion (Ghana embassy, Beijing)
To underscore the healthy bilateral relations between the two countries, Ghana has been selected as the headquarters for the China-Africa Development Fund (CADFUND) which was announced by President Hu Jintao at the opening of the 2006 Beijing Summit of the Forum on China-Africa Cooperation (FOCAC).
The objective of the Fund is to progressively create financial resources to the tune of five (5) billion US Dollars to encourage Chinese companies to invest in Africa and provide support to them. The Ghana Representative office of the CADFUND which is expected to serve the whole West African sub-region was inaugurated at the Movenpick Ambassador Hotel in Accra on 11th November 2011.
The Chinese government`s investment projects in Ghana cuts across all the major sectors of the Ghanaian economy and is well appreciated by the government and people of Ghana. The following are some of the completed public sector projects that were implemented with funds from the Chinese Government:
National Theatre Project, Nobewam Irrigation Project – Phase II (Maintenance and Equipment Requirement), Afife Irrigation Project, Juapong Cotton Textile,Vocational Training Centre-Dansoman, University of Ghana Drama Studio, Grain Silos Project, Dangbe East District Hospital, Police and Military Barracks Project, Ofankor – Nsawam Project commissioned in June 2006, Office Complex for Ministry of Defence, The Sunon Asogli Power Plant, Kumasi Youth Centre Project (on-going), US$562 million dollars Development of Bui Hydro Electric Power Project (on-going), US$150 million Ghana Telecom Network Expansion Project (on-going), US$15 million dollars Office Complex Building for the Ministry of Foreign Affairs and Regional Integration (on-going), US$2.6 billion Ghana Railway Project (feasibility concluded).
Chinese companies registered a total 249 projects between 1994 and 2006. 34 percent of the projects were in the manufacturing sector whiles 19 percent were in general trade. According to the Department of Commerce of PRC (DCPRC), in 2007 China topped Ghana’s FDIs with a total of 316 registered projects (statistics are accumulated). It also ranked fourth with a total value of $219 million investments. According to GIPC, in the first half of 2009 China remained first in the list of countries with 21 projects registered and ranked second with a total value of $8.18 million. With the low-interest loans accompanying the Chinese investment aimed at helping the local government with infrastructure construction and expected job creation, the Ghanaian government is in a better position to stabilize its economy. (www.jamestown).
China has the second highest number of registered projects (54) in the first three quarters of the year (January to September, 2011) after India and is the second country on the list of top ten investor countries with estimated value of registered projects at US$100.70 million (Ghana Investment Promotion Council).
Despite the fact that China has the second highest number registered projects (13.6 percent of all registered projects) its share of the foreign direct investment in monetary value as a percentage of total foreign direct investment in Ghana is very minimal (2.38 percent). Records indicate that a greater portion of Chinese investment goes to the manufacturing and general trade sectors. Chinese investment has been very insignificant in the agriculture, service and tourism sectors which have the potential of providing less skilled jobs where a greater majority of Ghanaians stands to benefit from.
A lot of reservations have been raised about the impact that the Chinese manufacturing companies will have on local manufacturing companies (Idun-Arkhurst & Laing, 2007, Tsikata et. al, 2008 & Osei, 2010). While acknowledging the creation of jobs, technology transfers, tax revenue to government, it is believed that local manufacturers (small and medium sized companies) may not be able to compete with these relatively well resourced Chinese companies and consequently drive them out of business.
The two countries have resolved to promote mutual investment and explore new areas for investment.
3.3 Aid, development assistance and debt relief
China’s engagement of African countries is driven by a number of political, economic and arguably also social drivers. Whilst the objectives of the broader bilateral relationships may be easier to identify, the different tools used to develop and leverage these relationships are harder to differentiate. Aid and development assistance are tools, used as part of a broader strategy, to meet these objectives (Davies et. al, 2008).
China often uses grants, loans and debt relief, donations, technical assistance as well as commercial investments and preferential trade access in order to gain access to strategic resource assets or to build stronger political ties and also spreads in influence.
As at December, 2006, China had spent over US$5.5 Billion in aid to African countries Ghana included and pledged to double aid to Africa by 2009. China has in recent years become a significant development partner to Ghana, providing increasing amounts of aid comprising loans, grants and technical assistance (Tsikata et. al, 2008).
By September 2005, total Chinese Financial assistance to Ghana was approximately 720,390,000 Million Yuan (US$100,557,000) which can be categorized into the following: Interest-Free Loans amounting to 483,390,000 Million Yuan (US$69.57 Million), Interest-subsidized Loans amounting to 200.00 Million Yuan (US$28.5 Million), Grants amounting to 37.00 Million Yuan (US$5.3 Million)
President John Evans Atta Mills` state visit to China in September, 2010, culminated in the granting of close to about 13 billion US Dollars development assistance from the Chinese government to Ghana. The visit also offered fresh opportunities for deepening of the existing bilateral relations between the two countries to their mutual benefit. This section looks at Chinese financial assistance to Ghana in detail.
The Chinese government through its Ministry of Commerce grants interest-free loans, interest subsidized preferential (concessional) loans to many developing countries as financial aid. Ghana has benefited immensely from the largesse of the China. Between 1964 and 1970 Ghana received close to US$43 million in grants, loans and technical assistance. Ghana`s first major cooperative agreement with China which was signed 1983 ended in 2004. Contracts Amounting to US$390 Million were executed with assistance from the Chinese government most of them in physical infrastructure development like road and building construction as well as water supply project which are handled by Chinese companies.
Ghana has benefited from loans in various forms for different purpose; the following is a few of them that are deemed very significant by the author:
In October 1998, the Government of Ghana and the Chinese Government concluded a loan agreement – the Interest-Subsidized Preferential Loan Agreement of RMB 150,000,000 million (US$18.0 Million). The two Governments agreed to utilize the facility for the benefit of joint venture enterprises.
Interest-free loan of US$99 million for the construction of landing sites for fishing communities and the Afife rice project by the Chinese government.
In November, 2003, The Chinese government granted an interest-free loan of RMB 180,000,000 million (approximately US$22.5 Million) to the Government of Ghana to finance the reconstruction of the 17.4 km Ofankor- Nsawam stretch of the Accra-Kumasi Highway by China Railway Construction Corporation, which links the southern sector to the northern sector of the country.
In August, 2005, Ghana has received an interest-free loan of RMB 20 million (¢ 22.195 billion) from the Chinese government. The agreement to this effect was signed by Hon. Li Jinzhang, Assistant Minister for Foreign Affairs of China who and Hon. Kwadwo Baah-Wiredu, Minister of Finance and Economic Planning.
In 2006, the Chinese government granted a US$30 Million concessionary loan to the government of Ghana to finance the 1st phase of National Communication Backbone Network Project which aims link all 10 regional capitals & 36 townships with fibre optic network. Another US$30 Million concessionary loan was granted for the implementation of a dedicated communication system for the security agencies in Ghana.
In 2007 the Chinese government agreed to extend a loan of US$562 Million comprising buyer credit facility of $292 million from China EXIM Bank and a concessionary loan of US$270 Million by the Chinese government also through EXIM Bank to the government of Ghana to cover the cost of constructing a dam and power station to help solve the acute power outages in Ghana.
The President of Ghana of H. E. Prof. John Evans Atta Mills` State visit the People’s Republic of China, in September, 2010 recorded a lot of benefits to Ghana in the form of investments, loans, grants as well as aid and donations. Agreements signed during the visit include:
Agreement on the Economic and Technical Cooperation between the Government of the People’s Republic of China to provide the Government of the Republic of Ghana with an interest-free loan of RMB 40,000,00 million (forty million Renmimbi Yuan only) within a period of 10 years from October 1, 2010 to September 30, 2020 was signed.
An agreement was signed under which China will provide Ghana with a loan of US$260.0 million, as a preferential buyers’ credit loan, with the following terms (2% interest, 20 years repayment period) to support the ongoing rehabilitation of the Kpong Water works. The preferential buyer’s credit would be administered by the China EXIM bank on behalf of the government of the People’s Republic of China.
A Framework Agreement was signed to provide Ghana with a multi-year development finance cooperation platform (the “comprehensive Project Finance facility”), under which China Development Bank would initially make available a tranche of US$3.0 billion equivalent, to finance infrastructure components of flagship industrial projects that are thematically linked to H.E the President’s, “ Better Ghana Agenda”.
Grants awarded by the PRC government tend to be disbursed in kind, through various projects, as requested by the recipient country. This is viewed in Chinese policy-making circles as preferable, given the continent’s history with cash disbursements by traditional donors (Davies et. al., 2008). Ghana has benefited from an uncountable number of grants from the Chinese government especially within the last three decades. Below are a few of them;
The construction of the military and police barracks in Accra financed through a grant of US$3.9 Million from the Chinese government was completed in 2004.
The Chinese government made available a military assistance grant of RMB 10 million ($1.2m) to the Ghana Armed Forces. Ghana's Defense Minister Dr. Kwame Addo-Kufuor initialled the agreement on behalf of the Ghana Armed Forces while Maj. Gen. Zhang Bangdon, Director of Foreign Affairs of the Office of National Defence of the People's Republic of China initialled for his country in Accra in March, 2004. The grant was to be used to purchase vehicles to beef up the Ghana Armed Force's transportation needs as well as for peacekeeping operations.
The Chinese government signed a RMB 20 million grant agreement (2.4 million dollars) with the government of Ghana on 16th December, 2004 for the implementation of projects on behalf of their respective governments. The Ambassador of the People's Republic of China to Ghana and Minister of State in Charge of Economic Planning of Ghana singed for their respective governments.
The Chinese government assisted Ghana with a grant of US$7.5 million to construct a new office complex for the Ministry of Defense in Accra. The contract which was on 6th May, 2005, by the Chinese ambassador to Ghana and the Minister of Defense of Ghana has been completed and commissioned in April, 2007.
The Chinese government has built a 100-bed General Hospital with a malaria research centre located at Teshie Tsuibleo in Accra, the capital of Ghana. The project which was in furtherance of the Beijing Summit of the Forum on China-Africa Co-operation was constructed at a cost of about US$ 7.5 million grant from the Chinese government.
In September 2005, China disbursed a grant of US$80,000 for the pre- feasibility studies carried out on the Ghana Railway Project in December 2005 by a team of Chinese experts.
Ghana benefited from a grant of US$2.00 Million also from the Chinese government to refurbish the National Theatre of Ghana which is was constructed by the Chinese government in the early 1990`s and has been a symbol of the China-Ghana friendship.
Under the framework of the Beijing Forum on China Africa Cooperation in 2006 and also as an example of the friendly bilateral relationship that existed between Ghana and China, the Chinese government built three model schools in three different regions of Ghana at total cost of US$ 2.2 million.
H. E. President John Evans Atta Mills in his recent visit to China in September, 2010 signed an agreement on Economic and Technical Cooperation between Ghana and China under which China was to provide RMB 60,000,000 million (Sixty Million Renmimbi Yuan Only) grant to Ghana.
An agreement was also signed during H.E. President John Atta Mills` visit under which China will provide Ghana with a loan of US$260.0 million, as a preferential buyers’ credit loan, with the following terms (2% interest, 20 years repayment period) to support the ongoing rehabilitation of the Kpong Water works. The preferential buyer’s credit would be administered by the China EXIM bank on behalf of the government of the People’s Republic of China.
The Chinese Government’s grants totalling 21.5 million RMB ($US3.07 Million) remain unutilized. The amount has been earmarked for rural water supply projects (construction of boreholes). Modalities are being worked out between the two Governments for the implementation of the projects.
3.5 Debt relief
Debt relief features prominently in the framework of the Forum of China-Africa Cooperation in 2000. President Hu Jintao announced at the Beijing China-Africa Summit in 2006 that China will cancel all debt in the form of interest-free government loans that matured at the end of 2005 owed by the heavily indebted poor countries (HIPCs) and the least developed countries (LDCs) in Africa that have diplomatic relations with China.
So far, China has granted two debt relief packages to Ghana. In 2003 it cancelled $66 million bilateral debt to Ghana and a further $24 million in 2007. During an official friendly visit to Ghana by H.E. Jia Qinglin, Chairman (Speaker) of the Chinese People's Political Consultative Conference (CPPCC), from 18th to 20th April, 2007, he disclosed that, China has decided to cancel part of Ghana government`s debt owed to China which was due at the end of 2005.
3.6 Technical assistance
China has also provided technical assistance to African states across a wide-ranging spectrum. A regular influx of teachers, medical personnel, and agricultural experts have provided core expertise in the fields of education, health, agriculture, environmental conservation, military and processing. Technical assistance from China is often in the form of turnkey joint ventures, where cooperation brings the broadening of relations and further cooperation in other areas (Davies et. al., 2008).
Technical cooperation between the Governments of Ghana and China centres mainly on training offered in China as well as technical support on Chinese funded projects in the country. The Technical Cooperation among Developing Countries (TCDC), jointly sponsored by UNDP and the Government of China, is aimed at enhancing private sector human resource capacity in Ghana. Short training courses are offered annually under this programme. The courses cover areas such as Agriculture, Energy, Environment and Information Technology and Human Resource Development.
Ghana recognises China`s advancement and great strides made in the area of traditional/herbal medicine. in an effort to improve traditional health practices in Ghana, to upgrade the status of herbal medicines and preparations for export and to train health practitioners the Acting Director of Alternative Medicine at the Ministry of Health and a Medical Officer from the Mampong Traditional Medicine Research Institute participated in two training programmes in Beijing In 2005. One Pharmacist also participated in a separate programme during the same year.
As part of a cultural and educational exchange programme Ghana has been a recipient of Chinese government scholarships from the 1960s. Currently there are more than 700 Ghanaian students studying in China in various fields of study and 34 Ghanaians are sponsored by the Chinese government to study in China every year.
In December, 2006 the Government of China dispatched two Chinese trainers/coaches to train Ghanaian school children for gymnastic displays during Ghana’s 50th Independence anniversary celebrations.
China has also provided technical training through seminars on agriculture, management, healthcare and traditional acupuncture for various ministry officials. Some 80 officials had attended these seminars between January and June 2007.
In August, 2010 the Government of China sent a medical team to Korle-Bu Teaching Hospital to provide medical assistance to the Ghanaians. The Chinese, Chinese doctors were expected to work together with their Ghanaian colleagues will share skills and expertise to contribute to the enhancement of general standard of medical care and improvement of the livelihood of the Ghanaian public.
Among the Chinese medical team were outstanding doctors and medical practitioners in China, with many years of clinical experience. They offered consultancy, some operated clinical practices in various areas such as General Surgery, Cardiology, Orthopaedics, Neurology, Urology, Radiotherapy, Oncology, Anaesthesiology, Paediatrics and Chinese Acupuncture.
H. E. the President Prof. John Evans Atta Mills on a state visit to China in September, 2010 signed an agreement for Technical Cooperation with China under which 40 Million Yuan would be accessed by Ghana within ten years starting from October 1st 2010 to 30th September 2020.
3.7 Aids and donations
China’s aid policy is guided by the principles of lisuonengji and liangli erxing, meaning that overseas aid should be within China’s capacity and fiscal capabilities. The PRC Government also uses aid as part of a package of tools to support Chinese companies in expanding export markets and business scope overseas. China’s “Go Out” Strategy, launched in 2002, aims to create a number of “national champions”, globally competitive enterprises which will act as foreign commercial policy vehicles for the PRC (Davies et. al, 2008).
Ghana has received aid and donations in various forms from the Chinese government, below are just a few of them that are deemed significant;
China presented consignment of tableware and carpets as her contribution to the government of Ghana towards the hosting hosted the Non-Aligned Ministerial Conference in Accra in 1991.
In July, 1995 China responded to the appeal by the Ghana Government to help rehabilitate the victims of the floods in Accra by donating an amount of US$30,000 to the Ministry of Foreign Affairs.
In June 1999, China once again presented items worth US$30,000 to the Ministry of Foreign Affairs. These items included computers and printers, refrigerators, air conditioners and television sets.
On April, 2010 the Chinese Embassy in Ghana donated around 600 books to the University of Ghana. These books cover various aspects of ancient and modern China, ranging from philosophy, history, politics and economy to culture & arts, religion, sports, medicine as well as geography and tourism etc. Dr. C.K.N Badasu of the Department of Modern Languages of the University of Ghana received the books on behalf of the University.
His Excellency, President Mills visit in September, 2010 also secured for Ghana, donation of medical equipment and materials worth RMB 10, 000,000 million There was another donation of RMB 10,000,000 million medical materials for the anti malaria centre.
Exchange of letters on provision of medical equipment and materials free of charge RMB 10,000,000 million (Ten Million Renmimbi Yuan only), for the china- aided General Hospital built the Chinese government.
Exchange of letters between the Government of the People’s Republic of China and the Government of Ghana, on the provision of anti-malaria medicines free of charge RMB 3,000,000 million (Three Million Renmimbi Yuan only).
President Hu Jintao of China immediately sent a message to President John Evans Atta Mills, expressing sympathy and support to the Ghanaian Government and People on behalf of the Chinese Government and People when severe floods hit Accra, Ghana recently has evoked great concern among the Chinese People. The Red Cross Society of China donated US$ 50,000 cash to its Ghanaian counterpart on 24th November, 2010.
In July, 2010 China presented 100,000 commemorative stamps to the Ghana Post to symbolize the existing warm relations between Ghana and China, and to promote mutual understanding and closer cooperation between the peoples of the two countries.
On 21st June, 2011, H.E. Ambassador Gong Jianzhong presented a batch of sports equipment to the Ministry of Youth and Sports on behalf of the Chinese Government at the Chinese Embassy. The donated items include the sports equipment used in some Olympic disciplines such as football, basketball, volleyball, badminton and table tennis. Mr. Clement Kofi Humado, Minister for Youth and Sports, received the items on behalf of the Government of Ghana and expressed his profound gratitude to Ambassador Gong Jianzhong.
On 27th July, 2011, H.E. Ambassador Gong Jianzhong presented a sum of 23,122 Ghana Cedis as a donation by China Disabled People's Performing Art Troupe (CDPPAT) to the Ministry of Employment and Social Welfare of the Republic of Ghana. The donation is composed of the performance proceeds and silver collection during the "My Dream" Show by CDPPAT that hit Accra 3 months ago. Hon. Mr. Enoch Teye Mensah, Minister of Employment and Social Welfare received the donation, while Hon. Mr. Alexander Asum-Ahensah, Minister of Chieftaincy and Culture were also present.
Hon. Alexander Asum-Ahensah happily recalled the wonderful performance that amazed Ghanaians greatly. He referred to the performance as an important part of the implementation of the Cultural Agreement between Ghana and China. He expressed gratitude to CDPPAT for their support for the ongoing sustainable project in aid of physically challenged in the country. He believed that the positive impact of the performances could greatly encourage and instill in them the "can do spirit".
4.0 Cultural cooperation between the P.R China and Ghana
Since establishment of diplomatic relations, exchange and cooperation in the field of culture and arts has always been an important part of the bilateral relations. And cultural exchanges have not only greatly enhanced traditional friendship and mutual understanding between the two peoples, but have also helped enrich the respective culture of the two countries.
A Cultural Agreement with China was signed in December 1981, under which Chinese Cultural Troupes visited Ghana in 1981, 1985 and 1990, for song and dance events as well as acrobatic displays. Ghana, in turn, successfully mounted a two-week cultural arts and crafts exhibition in 1985 at the Beijing Gallery. The Chinese also held a successful Art and Craft Exhibition in Accra, in November, 1991. Ghanaian students have also benefited from Chinese Government Scholarships under the Agreement.
In February, 2003, the State-owned China Central Television (CCTV) sent a Twelve-Member media crew to Ghana as part of a tour to some African countries that culminated in the production of a documentary film titled, “A Passage to Africa”. The film sought to deepen Chinese People’s understanding of African culture and history.
Under the framework of Forum on China Africa Cooperation, the Arts Performance Troupe from Gansu Province of China visited Ghana from 4th -8th May 2009. During the visit, the Troupe staged three performances at National Theatre in Accra and put up displays including acrobatics, music, magic and martial arts. During the visit, the head of the Troupe paid a courtesy call upon the Mr. Alexander Asum-Ahensah, Minister of Chieftaincy and Culture of Ghana and the Troupe member visited Nkrumah Memorial Park and other historical sites.
In June 2010, the former Ambassador of China to Ghana, H. E. Mr. Yu Wundze signed, on behalf of the Chinese Government, a Cultural Agreement with the Minister of Chieftaincy and Culture, Hon. Alexander Asum-Ahensan, for a more closer cooperation in the area of arts and culture between the two countries.
On 2nd September, 2010, the First Chinese Film Festival in celebration of the 50th Anniversary of China-Ghana diplomatic relations opens in the Silver bird Movie House in Accra, the Capital city of Ghana. The four-day event which was opened to the general public was free of charge. The six films to be screened are My Sunshine Lane, Assembly, Maimait's 2008, Ye Wen (lp Men), Walking to School and Forever Enthralled.
The Chinese Ambassador to Ghana H.E. Gong said the films reflect the past and present, rural and urban lives of the Chinese society and hoped that they will go a long way in helping the Ghanaian people better understand Chinese culture, the spirit of the Chinese people and modern society of China. It was attended by friends from the Chinese government, members of the diplomatic corps ordinary Ghanaians as well as Chinese students and representatives of the Chinese community in Accra attended the opening ceremony
On 18th January, 2011, H.E. Gong Jianzhong and his wife Her Excellency Mrs. Ernestina Naadu Mills, the First Lady of the Republic of Ghana, together with 50 students from Nima Basic School to the Chinese Embassy for the celebration of the Chinese New Year. He made a brief introduction of the Chinese New Year; the gathering was aimed at encouraging the selected kids of various backgrounds to learn more about China while exposing them to Chinese culture.
China-Ghana relations like any other form of relationship be it blood, marital or friendly has seen its ups and downs in the course of the five decades from 1960s to this present time. From the days of the overthrow of Ghana`s first President which saw the withdrawal of Chinese aid workers and embassy staff in Accra by Beijing in 1966 through the restoration of bi-lateral and diplomatic relations in January 1972 up to now. It is worth stating that while government to government cooperation and intercourse is at the highest level, the same can not be said of private and individual interaction among citizens of the two countries.
In the case of Ghana, whiles Ghanaians are known to be hospitable and accommodating when it comes to welcoming foreigners, there seem to be a lot of suspicion and mistrust towards Chinese business practices and the activities of some Chinese citizens in Ghana. While some of the reasons for this apprehension are justified, others are just misplaced perceptions borne out of cultural and lifestyle difference.
For example Ghanaian businessmen and entrepreneurs see the presence of cheaper and relatively good Chinese products on the market as a threat to the local manufacturing capabilities and competitiveness. The government of Ghana was taken to task in 2007 when it awarded a lucrative contract to a Chinese textile to print a large quantity of cloth for Ghana`s 50th Independence Anniversary celebrations. The government responded by saying that no Ghanaian textile company had the capacity in terms of size to execute that large size contract and delivery time was also a factor.
Unfair Chinese business practices in Ghana, human rights abuses, the import of unskilled Chinese labour into Ghana instead of using local labour, presence of illegal Chinese population due to overstayed visas and no resident permits, activities of illegal Chinese miners mining companies, and the presence of fake, pirated and sub-standard Chinese products on the Ghanaian market are some of the worries.
Below are a few news items (clipping) published in Ghanaian media about activities of unscrupulous Chinese businesses and citizens in Ghana that contribute to the misgivings of some Ghanaians toward Chinese people and products;
The China/Africa relationship – A new form of economic enslavement? – Dr. Kwame Osei http://www.modernghana.com/news/287383/1/the-chinaafrika-relationship-a-new-form-of-economi.html, date accessed, 4th January, 2012.
The Chinese incursion of Ghana – in the national interest? – Dr. Kwame Osei http://www.modernghana.com/news/326153/1/the-chinese-incursion-of-ghana-in-the-national-int.html, date accessed, 4thJanuary, 2012.
Five Chinese arrested for illegal mining at Wassa Akropong, http://www.ghanatoghana.com/Ghanahomepage/chinese-arrested-illegal-mining-wassa-akropong, date accessed 4th January, 2012.
Chinese Galamsey operators arrested, http://www.ghanaweb.com/GhanaHomePage/NewsArchive/artikel.php?ID=223528 date accessed, 4th January, 2012.
Call for measures to rein in illegal miners, http://www.ghana.gov.gh/index.php/news/general-news/9500-call-for-measures-to-rein-in-illegal-miners-, date accessed, 5th January, 2012.
Unfair trade practices; China hits back, http://www.xfmnewscenter.com/news/news.php?cat=Business&title=Unfair+trade+practices%3B+China+hits+back, date accessed, 5th January, 2012.
Four Chinese arrested for illegal mining
http://www.ghanatoghana.com/Ghanahomepage/four-chinese-arrested-for-engaging-in-illegal-gold-mining, date accessed, 4th January, 2012
On the Chinese side, it estimated that close to about 2000 Ghanaians resident in China. Close to 50 percent of this number are students or teachers who live in China for longer periods, about 45percent of this number are business people who come to China purposely for business and return back home as and when thy are done with their business dealings and there are about 5 percent that the embassy calls “Ghanaian passport holder” because they are citizens of other African countries but hold Ghanaian passports.
According to the Ghana embassy in Beijing, one major challenge is the absence of a recognized institutions in China that handles trade related disputes taking into account the fact the language barrier and cultural difference creates a lot of misinterpretation and misunderstanding in business transactions which is one of the most important aspects of the China – Ghana relations that both governments seek to promote.
The are not much incidents of negative activities of Ghanaians in China apart from the arrest of a few of Ghanaians and “Ghanaian passport holders” for drug trafficking, rape, assault, fraud and over-stayed visas.
6.0 Summary and Conclusions
It is evident that trade and investment financial between China and Ghana has witnessed tremendous increase in the last two decades, however, it still remains negligible compared China`s engagement with other African countries like Nigeria, Sudan, Angola, Ethiopia, Zambia, Zimbabwe, South Africa e.t.c. There is more room for increasing the level of engagement between the two countries.
Chinese government aid to Ghana has also increased tremendously in the last two decades, however greater part of the aid is directed towards critical infrastructure development, energy telecommunications and information, Communication and Technology (ICT) sectors. The government of Ghana may wish to request more Chinese aid in the area of agriculture since the sectoe employs over 40 percent of the active labour force of Ghana`s population.
It was established that most of the Chinese government aided projects were executed by Chinese companies with about 90 percent of the project labour imported from China. To benefit from technology transfer and job creation, the government of Ghana should emphasize on the use of local labour in future contracts with Chinese government and companies.
It came to light that contrary to the drive by the government to woo in more Chinese investors to set up base in Ghana and the moderate gains made in that respect, the ordinary Ghanaian entreprenuers are worried about the competition it brings and their ability to survive it. To develop the capacity of local businesses and enhance the survival of local industries, the Ghana government may consider negotiating a quota system on specific products from China as has been done by South Africa in the textiles industry.
It was established that greater part of Ghanaian are suspicious of Chinese products due the presence of unwholesome and sub-standard Chinese products on the market. To address the concern, Ghanaian legal, standards, regulatory and security institutions should devise means of ensuring that products that are produced by Chinese companies or brought into the country from China meet the required standards.
It came to light that lack of information, language and cultural differences contributes to most of the misunderstanding and breaking of local regulations between by citizens of both countries. To address this, both the Chinese and Ghanaian governments should educate and their citizens on procedures, requirements, rules and regulations for doing business or investment in each others country as well as institutions for accessing support and redress if necessary.
Relations between China and Ghana can best be described by a comment made by Mr Zhao Shiren, Counsellor at the Chinese Embassy in Accra at a photo exhibition and reception in Accra in July, 2010 to celebrate 50-years of Ghana-China diplomatic relations.
He said peoples of the two countries were galvanized by the bright future awaiting them saying "We know that our mission is yet to be accomplished and the journey cannot only be sustained by what we have achieved. It must be the calling and cause of every Chinese and Ghanaian". He called on Ghanaians and Chinese to "always carry on and forward, working to perfect the journey for the sake of our shared destiny. Lets us join hands and work together for a better and closer China-Ghana cooperation and write a new chapter of friendship between our two peoples". (http://www.ghanaweb.com/GhanaHomePage/NewsArchive/artikel.php?ID=186311)
The above demonstrate the important contribution of China to Ghana`s economic development and economic growth and emphasizes the need for the Government of Ghana to continue to dialogue with the Beijing at all levels.
Citing a line from a classical Chinese poem which goes "… friendship defies distance thousand of miles apart as friends are, still neighbours in each other's heart". Long live China - Ghana relations, long live the peoples of China and Ghana.