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2019 届毕业设计(论文)

DISSERATATION

COOPERATION FROM CHINA TO AFRICA IN SPECIAL CASE


OF MOZAMBIQUE

DISSERTATION TITLE: COOPERATION FROM CHINA TO AFRICA IN SPECIAL


CASE OF MOZAMBIQUE
NAME:MARTIN CLAUDIO DE CARLOS SEVENTINE
STUDENT ID: 2015006704
MAJOR: ECONOMIC AND TRADE
SUPERVISOR: GILLES
PROFESSIONAL TITLE:
SCHOOL: BUSINESS
SUBMIT DATE: 10 th of May 2019
ABSTRACT
The objective of this dissertation is to suggest an explanatory for China long-term strategy for
Africa and to show the role of Chinese aid in the pursuit of its goals, based on cooperation
between China and Mozambique.
The relations between China and Africa is a trend that will continue to develop China has capital
to invest in and technology but it needs raw materials to sustain the industry, continue to increase
export volumes and asset itself in international markets, and Africa provides to China raw
materials, because they don’t have enough infrastructure and technology to exploit them.
It is in this context that relations with Mozambique are intensified, while Chinese commercial
and business involvement in the Mozambican sectors of construction, agriculture and the
extraction of resources such as timber are growing.
Mozambique is interested in exploring the opportunities offered by the Chinese government to
counteract strong dependence on traditional donors. Those opportunities translate into debt
cancellation, preferential donations and lending, technical training in agriculture, and
construction.

Keywords: China, Africa, Mozambique, Cooperation, Aid, Wood, Development, Resources,


Agriculture, Infrastructure
1
INDEX
ABSTRACT…………………………………………………………………………….……..1
INDEX…………………………………………………………………………...…………....2
INTRODUCTION ..................................................................................................................3
1. Purpose of study......................................... .........................................................................3
2. Objectives of the Mozambique Case Study......................................... ...............................3
3. Methodology of analysis ............................................. ......................................................3
CHAPTER I - THEORETICAL CONTEXTUALIZATION .................................................4
Concept and operationalization of Chinese development aid .................................................4
The role of aid in China strategy for Africa ...................................... .....................................5
CHAPTER II -ECONOMIC ENVIRONMENT OF MOZAMBIQUE…………..………….6
1. Historical Context .............................................. ...............................................................6
1.1 Economic situation and investment from China .............................................................7
2. Some of the graphic illustrate the impact of China aid in Mozambique………................8
3. Emerging Business Partners ............................................. .............................................11
CHAPTER III - CASE STUDY: CHINA RELATIONS WITH MOZAMBIQUE ….…...12
1. Principles and objectives of bilateral cooperation ............................................................12
1.1. Role and mechanisms of Chinese aid and importance for Mozambique…...……….….12
2. China construction strategy in Mozambique ....................................................................13
2.1. Opportunities in the area of infrastructure construction in Mozambique ......................13
2.2. China operating mechanism in the construction sector .................................................14
3. China objective in accessing resources such as timber .....................................................15
4. The importance of the Mozambican agricultural sector to China ....................................16
5. Sino-Mozambican trade…………………………………………………………...…..…..18
5.2.Measure agreements taken by Mozambique and China………………...…………..…..22
CHAPTER IV- CHINA AND MOZAMBIQUE USING UNION PAY……………….…....25
CONCLUSION ................................................. ....................................................................28
Perspectives on China cooperation model for Africa: opportunities and risks ......................28
BIBLIOGRAPHY….................. .................................................. .........................................30

INTRODUCTION

Purpose of study
It was necessary for China to continue to grow its economy and expand its prestige has establish
to an intensification of its relationship with Africa, which is reflected in the aid and the
expansion of trade and investment to African countrys with special case of Mozambique and
China economic relation.
In this case, the Chinese relationship with Africa is far from being a temporary . On the oposite,
the objectives showed in the new strategic partnership of China and Africa, we can find in the
document containing "China - Africa" and announced at the Beijing Summit of the Forum for
China - Africa Cooperation.

2. Objectives of the Mozambique Case Study


Mozambique offers new possibilities for China long-term engagement in Africa.
Assuming that energy resources are the main reason for China involvement with the continent, in
sofar as they motivate most of the volume of investment and diplomatic activity, one might think
that Mozambique is a secondary partner for China, since it was not a supplier of energy
resources at that time, such as the African oil-producing countries and China major trading
partners in Africa, such as Angola, Sudan and Nigeria.
the economic and entrepreneurial involvement of China in Mozambique, which has been visible
for some years in sectors such as construction, agriculture and the extraction of forest resources,
with repercussions on aid, trade and investment volumes.
The Mozambican view in terms of economic potential becomes attractive for the business
opportunities it offers in various sectors. This is in line with the financing possibilities
represented by the large flows of development assistance led by developed countries and
international organizations and which reach Mozambique as a result of their good performance
in meeting the requirements for the allocation of international aid.

3. Methodology of analysis
Documentary research includes reports and statistical data produced by government entities, as
well as data and reports produced by information entities of Mozambican and international
organizations, all so from the internet source such us online newspaper ,blogs.
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CHAPTER I - THEORETICAL CONTEXTUALIZATION

1.Concept and operationalization of Chinese development aid

Much of the literature on Chinese aid in Africa refers to the difficulty in defining and quantifying
it, since the Chinese government does not publish a clear definition of the concept or statistics on
foreign aid.
The history of China relations with the African continent is ancient and dates back to the period
before colonial occupation.
This relationship was resumed in the 1950s, after the founding of the People Republic of China
(PRC) in 1949. The opportunity with the Afro-Asian Conference in Bandung in 1955, in which
the PRC established the first diplomatic contacts with representatives of African states and
liberation movements.
Following contacts in Bandung, China sent delegations to Egypt, Sudan, Morocco, Tunisia and
Ethiopia. In 1956 Egypt became the first African country to recognize the PRC and the first
Chinese embassy in Africa was inaugurated in Cairo. In the same year 1956, a department was
set up for African and Arab affairs in the Ministry of Foreign Affairs of the PRC, which had as
its priority diplomatic contacts through high-level visits.
The China relations with Africa have been a more or less constant vector of China foreign policy
since that time, and the approach of China to African countries has since been structured in the
framework of cooperation as a tool for the foreign policy of the states , which results from the
combination of interests in economic relations between the African countrys and China.

"Bilateralism" means negotiations or dialogue between two states, which may lead to bilateral
agreements on cooperation or trade between them.
This has been the preferential aspect of relationship, with advantages in that it favors
personalized relations with the African countrys.
Around all those historical steps i there is a quote wich call my attention , speaking to the state-
run press agency Xinhua, Masisi said, “To China, her president and citizens, we admire and
hold you in very high regard! Keep the innovation, friendliness and international outlook as
bright as the Chinese spirit!”

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2.The role of aid in China strategy for Africa
However, at that time, China was present in the infrastructure sector, with construction in the
area of transport, agriculture and industry, as well as the sending of medical teams and the
awarding of scholarships to African students, giving to them opportunity to have good eduction,
because at that time most of the African countrys they are coming out of war so they had most of
the infrastructure destroid , schools, hospitals ,buildings.
The most emblematic and ambitious engineering work undertaken by China in Africa in this
period where the construction lasted from 1967 to 1975, was the railway line between Tanzania
and Zambia called (TANZAM). At the time, this project translated a political measure with
economic consequences, aimed at providing a transport line from Zambia mineral-rich inner
region and facilitating its export via Tanzania, in order to avoid the then neighboring colonial
regimes ( Angola and Mozambique) or hostile (Zimbabwe and South Africa).
"For decades, China and Africa have treated each other with sincerity and friendship. We are a
community with a shared future and common interests, featuring solidarity and win-win
cooperation, based on the principles of sincerity, real results, affinity and good faith and the
approach of upholding justice and pursuing shared interests." (Excerpts from Xi's signed article
titled) .
The representative in Mozambique of the Industrial and Commercial Bank of China (ICBC), Sun
Gang Pep, told the ‘Mozambique-China’ workshop that China is interested in increasing
investments in the areas of natural resources, namely oil and gas.
“The Chinese investments may amount to more than US$100 million,” he said at the meeting
promoted by Standard Bank in Maputo.
The head of ICBC also recalled that trade between Mozambique and China increased
significantly in 2018, reaching approximately US$168 million, an increase of 2.24% compared
to the same period of 2017.
“Chinese investment in Mozambique is increasing with each passing year. Trade between the
two countries is at a satisfactory pace and in the coming years will be further enhanced by the
increase in investment in several areas,” he said.
“According to the data we have, about 70 percent of foreign direct investment in Mozambique
goes to natural resources, mainly for oil and gas, and we, as a commercial and industrial bank,
are going to finance projects in these areas as well,” he noted.
Sun Gang Pep also said that, “Through its strategic partnership with Standard Bank, ICBC will
explore opportunities to expand cooperation to new business areas and to assist the Chinese
business community in Mozambique.”
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CHAPTER II - ECONOMIC ENVIRONMENT OF MOZAMBIQUE

1. Historical Context
Relations between China and Mozambique date back to the 1960s, when China offered support
to Frelimo in its war against Portuguese colonialism. In November 2006, Mozambique became
the 13th African country included in China official list of recommended tourism destinations,
because geographicaly Mozambique is on the Indi Ocean side haveving beautiful view on is cost
side.
The choice of market economy allowed the country to establish privileged links with the
international community and donor countries. Also contributing to this influx of support is the
fact that the country is considered an example of post-conflict transition and its acceptance of the
rules and conditions arising from the financing of those international institutions.
China has not taken a passive attitude in this situation. Given the countrys potential in natural
resources, Beijing has been helping and supporting its with Mozambique in all sectors that
have or may be of interest to the Chinese economy; thus, pardoned part of the debt that should
have been paid until 1999 and supported several projects, as previously mentioned.
In addition, the PRC actively pursues the so-called trade diplomacy, using its embassy in
Mozambique to gather all available information on business opportunities. In 2006, during
President Guebuza visit to China, Chinese President Hu Jiantao announced the inclusion of
Mozambique in the list of tourist destinations approved by the Government as a way to
strengthen bilateral cooperation between the two countries and stimulate mutual development.

It is interesting to note that, according to some analysts, cooperation between China and
Mozambique, in particular the pattern of trade relations, takes different forms of cooperation
with Angola or with other African countries such as Nigeria or Sudan. Among other factors, the
fact that "many senior government officials have learned in China and have not forgotten the
solidarity" offered by the Asian country during the years of struggle for independence.
Another important aspect of this difference was the decision taken by the Mozambican
Government in late 2006 to make Mandarin a compulsory language in secondary education
alongside English and French , those facts made me mention what the Presidente of Zimbabwe
said he used those words : "No matter how the international situation changes and to what stage
China develops, China will, as always, stand with all developing countries, including African
countries, and be a sincere friend and a reliable partner of Africa. President of Zimbabwe
Emmerson Mnangagwa
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1.1. Economic situation and investment from China.
Mozambique is considered by donors and the international community at large as an example of
post-conflict transition and reconciliation success, with a very significant economic and social
performance.
For a large part of the last decade, the country recorded economic growth rates above 8% ,
mainly as a result of the impulse provided by the implementation of mega-projects financed by
foreign capital and also by the flows of development aid.
Mozambique economic potential rests primarily on agriculture, the country has enormous
potential for agricultural production, providing arable land to be exploited and considerable
water reserves, natural resources such as coal,gold,aluminuim,natural gas,diamond, hydroelectric
power,Mozambique has the potential to supply the Southern African region with electricity,
tourism, exploration of the iron-port transport infrastructure and industry.
The natural resources and mining sector represents an area of growing investment interest in
Mozambique. The country comprises reserves in coal, natural gas and potentially oil, titanium,
copper, graphite, gold, marble, iron ore, pegmatite, diatomite, bentonite, tantalite, precious and
semi-precious stones, bauxite, granite, phosphates, beryllium , mica and precious woods.
The reform of the law and regulations governing mining activity and its opening up to private
investment and the introduction of Land Registry contributed to the development of the sector,
as they provided better knowledge and information on the potential of the country. As a result,
production in the extractive industry has grown significantly, notably in terms of natural gas,
coal and minerals.
With the considerable increase in license and mining applications, including requests from
Chinese companies.
"As the saying goes, 'Numerous grains of earth make a mountain, numerous drops of water form
an ocean.' As long as we keep advancing China-Africa cooperation, we will make even bigger
achievements." (Excerpts from the joint interview Xi gave to media from BRICS countries in the
Great Hall of the People on March 19, 2013.) this quote take us to understand that the
cooperation or the union in case of the two countrys can make them bigger in achievements
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2. Some of
the graphic
illustrate
the impact
of China aid
in

Mozambique

Fig.1 Source :IESE - Institute for Social and Economic Studies


The graph illustrates the Chinese investment by sector in Mozambique, The blue color represent
Agricultor and Agro-industry sector 2% , the red part is the Construction sector with 21%, the
Green part is the Industry with 71% and the purply part is service with 6 %. That means have
been more active on industry and construction sector, in my opionion that have been improving a
lot for Mozambique development because now we started making cars in Mozambique , electric
scooters, solar
painels, and more
machinery to improve
the agriculture sector .
Fig.2 Source :IESE - Institute for Social and Economic Studies
The graph illustrates the Chinese investment by Province in Mozambique , the red part with
89% is Maputo province the capital city , the blue part with 5% is Inhambane province , the
green part with 5% is Nampula province and the purply part with 1% is Niassa.
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China imvested more in Maputo all so because of the infrastructure, China has already invested
in 69 major projects and is also the only foreign investor to create an investment promotion
centre in Maputo. Around 30 Chinese companies are currently based in Maputo where they
conduct work funded not only by Chinese policy banks but also the World Bank, the
Mozambican government and private enterprises. China Henan International Cooperation Group
(CHICO) has carried out a number of infrastructure projects in the country. CHICO concluded
the construction of the Moamba Bridge over the Incomáti River in Maputo province. The bridge
is 300 metres long, 10 metres wide and is built on 11 pillars two metres above the level of the
2000 flood that destroyed the previous bridge. The project cost was US$ 8 million and the
construction was completed in 18 months so far we can se that Maputo have been the major
point location for the
investiments.

Fig.3 Source :IESE - Institute for Social and Economic Studies


The graph illustrate the job opportunity by sector: the red part with 34% is construction , the
blue part with 9% is agriculture and agro-industry, the purply part with 9% is services and the
green part with 48% is industry. The industry and the construction sector they are more in terms
of employment because us we can on Fig.1 china invested more in industry and construction
which is good in my opion because if the country need to develop we must improve in the
industry for more technology and machinery ,and in the construction to build more roads
,realway , bridge, buildings.
“We make the future sustainable when we invest in the poor, not when we insist on their
suffering”. Bill Gates . Gates was trying to say that Afracan countrys with the support of China
they both can make Africa better for the future cooperations .

Fig.4 Source :IESE - Institute for Social and Economic Studies


The graph illustrates the job by province: on the blue part is Maputo province with 77%, on the
purply part with 7% is Niassa province, on the green part with 10% is Nampula province and red
part with 6% IS Inhambane province.
In the country there are companies with international dimension in the area of prospecting and
mining, and the most viable mining projects are those that are already under construction or have
already secured funding.
Examples of this are the large investments in the exploitation of natural gas deposits (Pande and
Temane), coal (Moatize) and heavy sands (coastal deposits in Moma, in the coastal zone of
Nampula province and in Chibuto district, Gaza province ). In this case, large projects are mainly
led by South Africa (Sasol), Brazil (CVRD), Australia (BHP Billiton), which won the Limpopo
Corridor Sands project, and Ireland (Kenmare), which won the Moma heavy sands project,
which consists of a mine with considerable reserves of titanium, ilmenite and rutile ore. The
Highland African Mining Company (HAMC) has been operating the Marropino columbium-
tantalite mine in Zambézia province since 2003.
Since many concessions for the exploitation of resources have, however, been allocated to
multinational companies, such as large investments in the exploitation of natural gas, coal and
heavy sands deposits, CHINA has opted to wait a new position in terms of large investment in
this sector. Under private investment, in there were five Chinese companies operating in
different areas of prospecting and research for coal (Tete province), precious and semi-precious
stones (Nampula provinces, Zambezia) and gold (Zambezia). The Africa Yuxiao Mining
Development Company of the Chinese group Jinan Yuxiao Group Co., which is engaged in
research and exploitation of mineral resources, including the industrial process, was registered in
Mozambique to prospect and research for ilminite, titanium and zircon in the district of
Inharrime, province of Inhambane.

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In the area of hydrocarbons, China did not compete for the latest rounds of allocation of permits
for the exploration of the Rovuma basin, during which several blocks were awarded.
For international oil company prospecting still in the area of energy, the Mozambican
government is also betting on alternative energies and biofuels, seeking to attract investment in
this area.
Mozambique intends to become a producer of biofuels, thereby reducing its dependence on
imported fuel and increasing its exports. Reflecting this effort are the projects developed by
companies such as Ecomoz, Mafudiesel, Sabiol and Procana.
The country oil resources are being prospected, which will last for 5 to 10 years until it can
evolve into exploration.
The sectors that have shown the most performance in the economy in recent years are
agriculture, construction, transport and communications and, more recently, fisheries, trade and
tourism.
The industrial sector accounts for the highest percentage (about 70-75%) of the value of
exports manifested in customs.
There is also a strong export sector in the area of agricultural, forestry and fishery resources
(tobacco, sugar, wood, cotton, shrimp, cashew). The main destination of wood is China and
cashew nut India. At present, the main export products are aluminum, electricity and natural gas.
The aluminum constitutes about 55% to 60% of total Mozambican exports to the European
Union (the Netherlands). Electricity (8.3%) and natural gas (5.7%) are mainly destined for South
Africa. These results reflect the impact of mega-projects implemented by foreign companies
such as Mozal Aluminum Foundry (South African, Australian, Japanese and Mozambican
consortium), which started production in 2000, which doubled after the project was completed in
2016; and the Pande and Temane gas exploration by the Sasol Natural Gas Project (South
African investment). Both projects played a significant role in the country strong economic
growth in recent years, with an impact on the construction sector.
Construction is the fastest growing sector in previous years and continues to be the most
dynamic sector as a result of large foreign investment projects as well as infrastructure
rehabilitation, financed by donors and some private investors.

3. Emerging Business Partners


The stability of the country associated with the adoption of a market economy reinforced the
interest of the international community for Mozambique and attracted new aid partners as well as
trade partners. In addition to China, Mozambique counts among its emerging trading partners
with countries such as South Africa, Brazil and India.
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CHAPTER III - CASE STUDY: CHINA RELATIONS WITH MOZAMBIQUE

1. Principles and objectives of bilateral cooperation


Bilateral cooperation between China and Mozambique is based on reciprocity and mutually
beneficial aid, a principle which implies that there is an exchange of the main resources available
in Mozambique, namely timber, agriculture, mineral resources and financing and construction of
infrastructures. The execution of the works will be carried out by the Chinese companies and of
any partnerships established with local companies.
To the China investment in construction, forestry, agricultural and fishery resources are
opportunities at the moment, while mineral resources may be a possibility for investment in the
near future.

1.1. Role and mechanisms of Chinese aid and importance for Mozambique
The forms of external assistance that China has granted to Mozambique are the donations to
support social, humanitarian, human resources and emergency development projects, and
interest-free loans for projects with social benefits, mainly allocated to infrastructure projects
structures.

2. China construction strategy in Mozambique


In recent years, construction was the area of business that registered the greatest growth and
dynamism, mainly through the implementation of industrial scale projects. The sector should
continue to expand with the continuation of road rehabilitation works and infrastructure
sponsored by international donors and with the implementation of investments in the areas of
mines, telecommunications and energy.
In the energy sector, the government has sought to attract investment for the construction of
infrastructures, in order to expand the Mozambican hydroelectric potential.
 For this development area is projected the expansion of Cahora Bassa production capacity, with
the construction of the north central Cahora Bassa and the Mpanda Nkuwa dam. Two other
major projects are also planned, such as the construction of a gas-fired thermoelectric plant in
Temane, Inhambane province, and a coal-fired power station in Moatize, Tete

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The industrial and rail transport sector offers as well as investment opportunities in
infrastructures, through the reactivation and expansion of development corridors, namely
Maputo, Beira, Limpopo and Nacala.
SADC members are located inland and require efficient regional connections to access the sea.
In Mozambique, the development and expansion of the transport system as well as the sea ports
is an opportunity for Chinese companies to assert themselves on the ground by building
infrastructure in the urban, commercial and industrial segments.
With these Mozambique could strengthen its potential as a hub for transport operations
throughout Southern Africa, while China could benefit from facilitating access to the markets of
hinterland countries and the flow of raw materials.

2.1 Opportunities in the area of infrastructure construction in Mozambique


The presence of Chinese companies in construction began to be noticeable and, consequently,
has been the subject of several studies and reports, especially since 2006, that the sector in which
the Chinese companies were distinguishing in Mozambique was the one of the construction.
Chinese firms were ahead of the works on more than one-third of the countrys roads and led
about 12 rehabilitation projects for the urban sanitation and water supply network in the cities of
Maputo, Beira and Quelimane, worth about 80 million US dollars.
SADC members are located inland and require efficient regional connections to access the sea.
In Mozambique, the development and expansion of the transportation system as well as sea ports
is an opportunity for Chinese companies to assert themselves on the ground by building
infrastructure in the urban, commercial and industrial segments. With these
Mozambique could enhance its potential as a hub for transport operations throughout Southern
Africa, while China could benefit from facilitating access to the markets of the hinterland
countries and the flow of raw materials.
The presence of the Chinese companies in the construction began to be notorious and
consequently it was the object of several studies and reports, mainly, from 2006. The Sal &
Caldeira Advogados and Consultores study, sponsored by the Embassy of Norway, of 2007, that
the sector in which the Chinese companies were distinguishing in Mozambique was the one of
the construction.
At the time of publication of that report, Chinese firms were at the head of the works on more
than one-third of the country's roads137 and led about 12 rehabilitation projects for the urban
sanitation and water supply network in the cities of Maputo, Beira and Quelimane, worth about
80 million US dollars. These facts were found in a study by Emmy Bosten, which referred to the
involvement of Chinese companies in the construction sector as "the principle of broader long-
term collaboration between the two countries".
13

‘’Africa has been rising for a long time. I hope we will eventually get to a point
where we have risen.’’ Albert Kobina Essien is the Group Chief Executive Officer of
Ecobank Transnational

2.2 China operating mechanism in the construction sector


China had to devise a strategy appropriate to the current situation in the Mozambican market, so
that its companies could succeed.
The Mozambican construction sector is characterized by the presence of Western and South
African companies, heavily deployed in the field as a result of a long relationship dating back to
the colonial period.
The Chinese strategy was to cultivate influences with the Mozambican government and to take
advantage of China comparative economic advantages, which allow it to offer highly
competitive prices achieved on the basis of low-cost skilled labor, reduction in management
costs, availability of capital through Chinese state-owned banks and access to raw materials at
minimum costs through supply chains from China.
Infrastructure projects funded by the Chinese government through loans or financial aid to
developing countries have provided the circumstances for Chinese enterprises to enter and settle
in the country.
This process was followed by participation in projects won in international competitions.
Development Bank, and other institutions; projects obtained through bilateral bilateral
government agreements; projects obtained through local clients; and projects obtained through
local representations of Chinese companies.
Once established locally, Chinese companies become investors in the construction market,
competing for projects financed with foreign direct investment and expanding their activity to
other sectors, not only in Mozambique but also in the region.

In this process, the embassy of the People Republic of China in Maputo has played a key role as
intermediary in spreading business opportunities for China construction companies. Alexandre
Carriço explains that even when the construction of infrastructures does not result from loans
from China but from other Mozambican international or governmental entities, "Chinese
diplomatic personnel transmit to China all information regarding the requirements associated
with the competition public tender of the works, and the proposals of the Chinese companies also
delivered through the diplomatic channel "
14
Execution of works financed by ExIm Bank of China requires that the work for which the loan is
intended be granted to Chinese companies, so that the Chinese government opens competitions
in China limited to the participation of Chinese firms.

The winning companies, in turn, import from China most of the resources for construction,
including materials, equipment and labor.
This policy of "linking" loans to the purchase of equipment and materials in the country of origin
of the credit is similar to the practice of traditional donors and facilitates the companies involved
in their entry into the local market where they can apply for commercial contracts
Most of the companies present in Mozambique already have some deployment and experience in
the African continent and need to continue to expand in the region, as is the case with Anhui
Foreign Construction Group (AFFEC), China Metallurgical Construction Corporation (MCC),
China Geo-Engineering Corporation, China Henan International Cooperation Group (CHICO) e
a Sinohydro.

Public tenders launched by the Mozambican authorities, which are generally open to any
candidate, have provided an opportunity for the participation of Chinese contractors, who tend to
be successful. The quality of the works, compliance with deadlines and highly competitive low
prices around 25% or 50% below the market.
Although there are still a number of infrastructure projects to which Chinese contractors do not
have access due to constraints imposed by funders, Chinese companies are gaining ground in the
more specialized market segments that have been neglected by other foreign companies .
Through public tenders launched by the Mozambican authorities, Chinese contractors are
expanding their participation in the construction of roads and bridges and rehabilitation of urban
water distribution and sanitation systems) are the main reasons presented by the Mozambican
government authorities to give preference to Chinese contractors, to the detriment of the
Mozambican, Portuguese and South African companies established decades ago in the country.

3. China objective in accessing resources such as wood


Timber is one of the most exported products, with most of the forest resources extracted in the
country (88%) going to China, which places Mozambique among its largest suppliers of tropical
timber in Africa. Mozambique is a country with strong wood extraction potential, the country
productive forest covers about 20 million hectares, or 25% of the country land area.

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The north of the country has a great potential in natural resources and it is in this area that the
activity of cutting and marketing of wood is concentrated. The provinces of Sofala, Zambézia
and Cabo Delgado are those that have registered an increase in the activity of forestry, resulting
in an increase in the number of licenses for forest exploitation of native species.
These provinces are also regions with great potential for timber species such as Panga or
Jambirre (millettia stuhlmannii) and Chanfuta (afzelia quanzensies), widely used for the
manufacture of floors, furniture and construction in general.
Mozambican wood is relevant in the context of China strong economic growth and the reduction
of its domestic logging activity, especially since the early 1990
Although Chinese demand is boosting Mozambican foreign trade with positive results in terms
of overall export volume, wood is exported mainly in unprocessed logs. This type of export does
not promote local industrial capacities, job creation or the development of rural communities,
and has little effect in terms of improving the well-being of the population, since it transfers most
of the advantages of a poor country as it is Mozambique to China that becomes the main
beneficiary of this process. . China is the world's largest importer of wood, which is mainly
purchased raw for processing in Chinese (construction, furniture, paper and other) industries and
sold on the Chinese domestic market or for re-export to Europe, USA and Japan at low import
costs.
Increased demand and exports of forest products are increasing pressure on forest management
systems and networks for control and monitoring of logging and trade in timber, with
consequences for increasing illegal and unsustainable harvesting and trade, loss of biodiversity
and abuse of the rights of forest-dependent communities.

4.The importance to China of the Mozambican agricultural sector


Mozambique has a great economic potential in agriculture and this is the sector established by
Chinese cooperation as one of the priorities, along with the development of infrastructures.
Both countries agreed to designate the training of agricultural technicians and technical
cooperation and technology transfer as Mozambique is expected to benefit from Chinese
technical expertise
and to promote research and research to increase domestic rice production in order to meet the
country's food , to ensure the nutritional needs of the population and, in a more ambitious
perspective , to ensure the export of the surplus, supplying the domestic Chinese market, with
beneficial effects in terms of balance of payments. China's action in neighboring countries such
as Zambia (where it develops intensive agricultural production projects). as well as its
positioning in terms of cooperation priorities in Mozambique, show that China is working to find
16
It is in this context that Mozambique gains relevance for China. Agriculture is one of the sectors
that has benefited from Chinese business expansion in Mozambique, with Chinese companies
making a presence with Chinese private investment support. It was in this context that a
partnership between Mozambican, Macanese and Portuguese companies.

The Zambezi Valley is one of the areas considered of interest for Chinese investment because of
its high economic potential. The region covers an area of 225,000 square kilometers 22.5 million
hectares or 27.7% of Mozambique's surface area, with 52% of the country's water resources
covering four provinces Tete, Zambézia, Sofala and Manica. established in 2005 for the
prospection, detection and census of the economic potential of natural resources and raising
capital for the development of the Zambezi Valley region. The purpose of the partnership was to
mobilize a concessional credit facility in China for the procurement of equipment and services
which, through the Zambezi Valley Development Office (GPZ), should benefit farmers and
entrepreneurs in the agricultural and agribusiness in the four provinces of the Zambezi Valley.

This partnership is made up of Geocapital, a consortium based in Macao and majority-owned by


Macao businessman Stanley Ho; SIGIR (Integrated Resource Management Company), linked to
the commercial interests of GPZ, and Mozacapital, a financial company formed by Mozambican
investors, which inaugurated in June 2008 a private investment bank, Moza Banco (51% of
Mozacapital and 49% of Geocapital), which is focused on investment and offers specialized
services for corporate and private banking in the agro-forestry, natural resources (mining and
tourism), telecommunications, real estate, construction of commercial infrastructure and energy.
"No matter how the international situation changes and to what stage China develops, China
will, as always, stand with all developing countries, including African countries, and be a
sincere friend and a reliable partner of Africa." (Excerpts from Xi's talks with Zimbabwean
President Emmerson Mnangagwa at the Great Hall of the People in Beijing on April 3, 2018.)

17
5.Sino-Mozambican trade
As illustrated in the graph below, Sino-Mozambican trade has grown rapidly over the past
decade. The trade volume in 2008 reached US$ 442.7 million, an increase of 48 percent
compared to the previous year.bThe increase is largely due to increasing Chinese imports of
Mozambican oil seeds, sawn wood products and chromium ore.

Graph 1: Sino-Mozambican trade 1995-2008


Source: World Trade Atlas data
From 1995 to 2008 China exported more to Mozambique ,products avaliated in million dollar,
compared to the import from Mozambique, China have been eancresing the import , not us
much us the export from China to Mozambique.
Mozambican imports from China (see graph 2 below) are dominated by manufactured goods,
largely vehicles and parts, electrical appliances and iron and steel articles. It can be noted that
vehicles and parts as well as iron and steel articles have increased their share in the import
profile over the last year.
We have to consider that China have been exporting more product to Mozammbique and there is
a reason why , in terms of manufacturing Mozambique was developing too slow, and China was
not only the economic relation country but all so the focal market with the best product price .

18
It is a big challenge for Mozambique , to Grow and develop as fast as China did, and that is the
most important step for the economic situation of the country us Bill Gate said. "It’s clear to
everyone how big and complicated the challenges are. But it’s just as clear that people with
bravery, energy, intellect, passion, and stamina can face big, complicated challenges and
overcome them. There is so much more work to be done to create a future in which we can all
live together. But there are also so many people who are eager to get to work." Bill Gates

Graph 2: Composition of Mozambique top-20 imports from China 1995-2008


Source: World Trade Atlas data, CCS analysis
Mozambique exports to China are dominated by wood and wood products. A smaller share of
China import profile with Mozambique is comprised of vegetable products and chromium,
titanium . On the Graphic 1, we talked about the reason why Mozambique imported all those
product illustrated on the graphic 2, and we with the support of chinese construction company we
needed to import most of equipment and material from china. Because of the the best market
price and all so cooperation with chinese company in the industry , construction , those are the
main sector with more impact of china aid .
“Markets are constantly in a state of uncertainty and flux and money is made by discounting the
obvious and betting on the unexpected.” George Soros

19
Graph 3: Composition of Mozambique top-20 exports to China 1995-2008

Source: World Trade Atlas data, CCS analysis: Mozambique have been exporting to China more
wood and seafood in the 1995,1998, 1997, and from 2000 to 2008 we have the wood products
us most imported from Mozambique to China.
Trade between Mozambique and China reached 2.515 billion US dollars last year, an increase of
over 35 per cent on 2017.
According to figures published by the Chinese customs service, exports from Mozambique to
China grew by 23 per cent to 651 million dollars, whilst imports increased by forty per cent to
1.86 billion dollars. This makes Mozambique the fourth largest trading partner that China has in
the Lusophone world after Brazil, Angola, and Portugal.
According to the Ministry of Planning, the China Development Bank, currently financing
several projects in Southern Africa, is said to want to base its regional office in Maputo,
with the objective of subsequently going into Zambia, Zimbabwe and Malawi. The idea is
to create a centre for financial decision making and regional integration by securing funds
for the construction of railways to the interior and into other countries. China is perceived
to be using Mozambique as an entry platform into SADC, because of its geographic location,
ports, resources and infrastructure necessary to ensure the flow of commodities for
export.
China has also become a major buyer of Mozambican timber; despite local regulations
forbidding the export of unprocessed logs, which aim to force foreign countries hoping to gain
access to Mozambican resources to invest in setting up processing facilities in the country, many
logs are exported illegally. Chinese businessmen are not typically involved in the actual practise
of logging; instead, it is performed mainly by locals, who then bring the logs to buyers in port
cities.

20
 China has also become an increasingly important player in Mozambique construction industry;
over one-third of Mozambique new road construction is now carried out by Chinese contractors.
Contractors from other countries, who have been losing out on business due to their higher costs,
complain that the Chinese contractors make no effort to transfer skills or technology to locals,
and do not make use of local or regional labour subcontractors, instead preferring to import and
manage their own workers. However, Chinese-run construction sites are better-organised and
have a lower rate of pilferage. In the first 10 months of 2018, the value of trade was US$1.1
billion, with Mozambique being the 23rd largest trading partner of China. From all those big
steps of cooperation we could say ‘’The African continent is rising. We must ensure that our
poorer and vulnerable neighbours are carried along. We must ensure this growth is inclusive.
We must ensure there is maximum inclusiveness through creating opportunities for people to
create opportunities for themselves.’’Ebele Jonathan, President of Nigeria

"China-Africa relations have today reached a stage of growth unmatched in history. We should
scale the heights, look afar and take bold steps. Let us join hands, pool the vision and strength of
the 2.4 billion Chinese and Africans and open a new era of China-Africa win-win cooperation
and common development." (Excerpts from Xi's speech titled "Open a New Era of China-Africa
Win-Win Cooperation and Common Development" at the opening ceremony of the
Johannesburg Summit of the Forum on China-Africa Cooperation in South Africa on December
4, 2015.)
21
5.2.Measure agreements taken by Mozambique and China
Agreement on Economic and Technical Cooperation. Grant by the China government of a loan
without interest and free agreement on the Submission to Mozambique of a Chinese team of
doctors, followed by biannual protocols for the replacement of the teams.
-Cultural Cooperation Agreement of 12 October 1984, followed by biannual plans for the
implementation of cooperation measures.
- Exchange between colleges and universities and provision of scholarships to Mozambican
students.
- China has been promoting knowledge of the Chinese language and culture abroad through the
funding of foreign institutions for the creation of distinct teaching units known by "Confucius
Institute". Mozambique had set up a "Confucius Institute" at the Institute of Languages for the
training of Mozambicans in Chinese language and culture. So far the scholarship that China
provide to Mozambican students , they come to china to study in chinese language and for the
future is good because we have many Chinise industry in Mozambique , and those students can
get job when they return home .
- construction of school infrastructure.
- in the cultural area, cooperation will include the training of conservation and cultural heritage
restoration technicians and cultural managers, the grant by China of cash donations for cultural
conservation projects and the acquisition of musical instruments.

- Trade Agreement and Agreement on the Promotion and Reciprocal Protection of Investment
and Double Taxation, signed at the first session of the Joint Economic and Trade Commission
between the Republic of Mozambique and the Peoples Republic of China, on 6 July 2001
- Memorandum of Understanding on Cooperation in Agriculture between the Ministry of
Agriculture and Rural Development of the Republic of Mozambique and the Ministry of
Agriculture of the People's Republic of China.
Increase scientific and technical cooperation in the field of agriculture and livestock through the
establishment of Joint Development Agricultural Programs in the areas of forests, rice
production, biotechnology, agricultural and livestock production and disease and pest control,
and research. The Parties agreed to promote the exchange of experts and to promote bilateral
investment in agriculture, food processing and agricultural technology exchange.

22
-Memorandum of Understanding between the Ministry of Tourism of the Republic of
Mozambique and the National Tourism Authority of the People's Republic of China on the
facilitation of group travel to Mozambique of Chinese tourists.
In the area of Tourism, China has elected Mozambique as a tourist destination for Chinese
citizens. Mozambique thus joined a list of African countries classified as a "recommended"
tourist destination for Chinese tourists.
Through this statute, the Chinese state allows its citizens to visit other countries without
authorization of departure, through government-authorized travel agencies. Estimates point to
China being the world's largest source of tourists by 2020, with more than 115 million Chinese
traveling abroad, which represents an interesting investment potential.

-Agreement on Export Tariffs: In 2007, the China government announced an increase in the
number of Mozambican products exempt from export tariffs from 190 to 442. Following the
Beijing Summit of the China-Africa Cooperation Forum in 2006, a general Sino-African
agreement was the application of zero tariffs on 466 African export products, within the
framework of the Beijing Action Plan. These agreements, however, given the weak industrial
capacity and local supply, have little impact on the increase of Mozambican exports.

- Cooperation Agreement for the Area of Science and Technology and Innovation: Increased
agricultural research activities, with the establishment of the Center for Research and Transfer of
Agricultural Technologies in the Boane district and the implementation of the Technological
Park in Moamba district, both in the province of Maputo. The Technological Park aims to
concentrate teaching and research institutions and attract researchers to develop agricultural and
animal production techniques.
- Establishment of a research center for health science in communicable diseases.
- training of Mozambican staff at master's and doctoral levels in China.
“My model for business is The Beatles. They were four guys who kept each other’s kind of
negative tendencies in check. They balanced each other, and the total was greater than the sum
of the parts. That’s how I see business: Great things in business are never done by one person,
they’re done by a team of people.” Steve Jobs

.
23

China as the country of origin of Foreign Direct Investment (FDI) in Mozambique

Table.1 Source: Information obtained from the Mozambican Investment Promotion Center
(CPI) and updated in Johanna Jansson and Carine Kiala - Patterns of Chinese investment, aid and
trade in Mozambique. China have been Supporting Mozambique , in many Projects and all so
direct investments, we can see that from 2003 to 2008 China got best position 2007 with more
projects , than the other years . which means China invested more in 2007 in Mozambique .

Trade between China and Mozambique


Table.2 Source: Information obtained from various sources and updated in Johanna Jansson and
Carine Kiala - Patterns of Chinese investment, aid and trade in Mozambique. South Africa:
Center for Chinese Studies, University of Stellenbosch.
This table is showing us the trading relation between Mozambique and China , in terms of
numbers , the trading between both countrys have been growing from 2002 to 2008 ,in one side
giving more opportunities to the countrys , to cooperate more
24
CHAPTER IV- CHINA AND MOZAMBIQUE USING UNION PAY
In China: African business
African commercial activity in China is also thriving at a local level. In Guangdong, the
manufacturing heart of the country, hubs such as Guangzhou Yuexiu and Baiyun districts are
focal point with small African businesses. Trading is the main line of work for many in China to
purchase inexpensive goods from wholesale markets, shops, and factories throughout the country
to sell them back in Africa. And most of the time or 90% of those investor they use bank cards
from African Banks with VISA system which charge more in terms of commission to take the
money from the ATM machine in Chinese Yuan and buuy the goods .The goods sourced in
China by African traders are mainly textiles, cosmetics, and electronic products. A number of
business-people are also present to act as intermediaries between investors in African and
Chinese factories.
“The key to trading success is emotional discipline. If intelligence were the key, there would be a
lot more people making money trading… I know this will sound like a cliche, but the single most
important reason that people lose money in the financial markets is that they don’t cut their
losses short.” Victor Sperandeo

China UnionPay bank cards now accepted in Mozambique


Millennium bim is Mozambique commercial Bank. They will issue credit cards from Chinese
financial institution UnionPay, the leading provider of credit card services and payment systems
worldwide. The bank will make UnionPay debit and credit cards and related services available in
Mozambique, this fact will open a new opportunity of transaction facility and payments ,
between Chinese business investments and in Mozambique , all so for Mozambican business
investments in China.
The agreement between Millennium bim and UnionPay was signed on September 2 2018 in
Beijing during a business meeting organised by the Agency for the Promotion of Investment and
Exports (APIEX), the Confederation of Economic Associations (CTA) and the embassy of
Mozambique in China. The meeting of Mozambican and Chinese entrepreneurs was held within
the framework of the China-Africa summit, which was attended by Filipe Jacinto Nyusi,
President of the Republic of Mozambique.
The Memorandum of Understanding between the two companies also creates a long-term
relationship between the two financial institutions, facilitating Millennium bim clients’ access to
the Chinese market.
Founded in 2002 and headquartered in Shanghai, China, UnionPay currently manages more than
five billion cards in more than 150 countries around the world. It is currently the world leading
financial and payment services company.
25
According to Millennium bim Moisés Jorge, “this is a very important agreement for the bank
because it allows access to a strategic market for Mozambique, which has huge growth. It is also
the first step in a partnership between Millennium bim and UnionPay which will undoubtedly
have enormous benefits for our customers,” he added.

The aim of Millennium bim is to remain at the forefront of innovation by providing its customers
with the best services in the best conditions.

Millennium bim is the largest financial group in Mozambique, and currently has 1.8 million
customers, an indication of the confidence of Mozambicans have in the bank contribution to
banking, financial inclusion, and its support for investment and development in the Mozambican
economy.
Cai Jianbo, CEO of UnionPay International meets with Ms Esselina Macome, Executive Director
of the Bank of Mozambique and her delegation in Shanghai. Relevant leaders of Sociedade
Interbancária de Moçambique (hereinafter referred to as “SIMO”), a bank card switching
institution in Mozambique, accompany the visit.
Executive Director Esselina introduces the central bank desirability on the construction of
payment system infrastructure in the context of economic and financial integration of
Mozambique, and emphasizes the significance of the construction work. She says, the Bank of
Mozambique hopes to learn about what UnionPay has been doing in building its payment
switching network, increasing bank card popularization, reducing social payment cost, and
supporting rural financial development, and is looking forward to the cooperation with UnionPay
on UnionPay card services.

CEO Cai Jianbo outlines the development situations of UnionPay card international business,
introduces the UnionPay practice in assisting the central bank of China with the promotion of
“Funong” cards and mobile payment products in the domestic market, and shares UnionPay’s
experience in building the bank card switching network. He says, UnionPay will provide
UnionPay card services in Mozambique under the guidance of the Bank of Mozambique and in
accordance with local regulatory policies.
Recently, UnionPay International will accelerate the cooperation with Simo and other local
institutions to jointly improve the local card acceptance environment, design UnionPay card
products fitted for the needs of Mozambique market, and provide local residents with safe and
convenient services for everyday spending, overseas payment, labor-related remittance. By
taking advantage of UnionPay’s global card acceptance network and products.
26
The Mozambican ambassador considered that the People Republic of China is a strategic
partner for Mozambique’s development process, particularly in infrastructure and energy
projects, considering its experience and capacity in terms of state-of-the-art technology,
resources investment and know-how.
Ali also said in the interview that China, which is a strategic partner of Mozambique, can
financially support the improvement of the rail and port infrastructure of the three main
development corridors (Maputo, Beira and Nacala) that allow access to the sea from land-locked
countries, such as Zambia, Malawi, Zimbabwe and Swaziland.
The Mozambican diplomat also said that Mozambique plans to build new rail-port infrastructure,
such as the Macese and Techobanine port project, linking Botswana, South Africa, Swaziland
and Mozambique and the Beira-Machipanda rail link between Mozambique and Zimbabwe.
Aires Ali said that “it is the Government of Mozambique concern to mobilise resources to
improve the existing infrastructure in these corridors to respond to new demand resulting from its
intensive use in the transport and handling of a variety of cargo, which includes the export of
products from new discoveries in Mozambique, namely coal and gas, among others, and the
import of a variety of consumer goods and for the development of industry in Mozambique and
hinterland countries.”
“As we can see, these are projects that require a lot of funding and, once again, China as a
strategic partner of Mozambique is taking in them,” he said.
The ambassador said that there are encouraging results of Sino-Mozambican cooperation in rice
production in Gaza Province (Wanbao Project in Xai-xai and the Chókwé Irrigation Area) and
also revealed that there are other projects in the pipeline on rice in Sofala province and on agro-
processing in Mozambique.
“Mozambique can take advantage of China – Belt and Road – initiative by creating industrial
parks, building access roads, linking production centres and commercial and consumer centres
by promoting the value chain for products through the transfer of technologies and promoting
employment and well-being of the Mozambican population,” he concluded.

If you engage in agriculture, you have the best chance of moving the largest number
out of extreme poverty all at once.
Sipho Moyo, Director, Africa, of the The ONE Campaign

27
CONCLUSION
Perspectives on China cooperation model for Africa: opportunities and risks China need to
continue to thrive in its labor-intensive and export-oriented economy model goods has boosted
its strategy of integration and expansion into the world economy. This urgency of growth
initially had as a priority access to the major world markets of Europe, the United States and
Japan, where China has gained space as a result of the high competitiveness of its low-cost
products such as clothing, footwear, furniture, plastic articles and electronic equipment.
China is a country rich in raw materials; however, its continued economic growth depends on
access to resources in addition to the domestic reserves it provides. On the other hand, the most
populous country in the world needs to find alternative sources of supply of agricultural products
in order to supply its domestic market. Sub-Saharan Africa, which includes Mozambique,
provides water resources and considerable tracts of fertile land for agriculture.
In this context, China involvement with the African market in natural resources and raw
materials, and consequently the relations between China and Africa, is likely to continue to
develop in the medium and long term. China needs to have a prominent position in accessing A
frican countries mineral, forestry, agricultural and fishery resources to sustain its industry,
continue to increase export volumes and assert itself in international markets. To this end,
China maintain deepen economic, cultural relations with African countries.
The existence of convergent interests and complementary needs drives the growth of economic
links between China and Africa. China, on the one hand, exports products that are affordable to
the low purchasing power of Africans, but whose production creates a strong demand for raw
materials. China offers technology, knowledge, capital and market experience and needs to
expand and diversify markets, in order to establish itself in the international market, especially
in the construction sector.
China growing commercial and business expansion in Mozambique, which is not an oil-
supplying country such as Angola, Nigeria or Sudan, demonstrates that China has an interest and
need in shaping its cooperative relations based on the raw materials , without being the most
obvious energy resources. On the other hand, the consolidation of bilateral relations with
Mozambique and the maintenance of its and ensure continuity and increased trade and
investment. Complementarity of the Chinese and African economies.

28

Mozambique has an interest in maintaining good relations with China and in exploring the
opportunities offered by the Chinese government, which translate into debt cancellation, grant
and preferential lending, technical capacity building to increase agricultural production (rice)
with the aim of guaranteeing the country food security and supply of low-cost construction
projects. The Mozambican government has sought to mobilize Chinese funding to rehabilitate
and build its infrastructure network. Mozambique strategic objective is to expand its energy
potential by building dams and hydroelectric and thermoelectric power plants to consolidate its
position in Southern Africa as the region leading energy supplier.

China can be a relevant factor in terms of diversifying the source of aid and appears to be an
important partner in financing the additional investment needs and making it possible to exploit
economic potential that may be underutilized. The World Bank recognized China vocation for
the construction of infrastructures of scale, with an impact on the development of public works in
African countries, and in this context signed a Memorandum of Understanding with ExIm Bank
of China in 2007 with the intention to improve joint cooperation between the two institutions
with a view to investing in the transport and energy sectors, in particular in countries such as
Mozambique, Ghana and Uganda.
China is operating in Mozambique using a different approach to that seen in its engagement
with other African countries, because of Mozambique long-term geostrategic value in
East and Southern Africa. Mozambique is strategically located to provide its neighbouring
landlocked countries of Malawi, Zambia and Zimbabwe with the benefits of a 2 000 km
coastline and several deepwater ports, making the country an important transport provider
and trade conduit for its hinterland. Mozambique is therefore an entry point for maritime
access from the Maputo corridor to the Walvis Bay corridor. Several of Mozambique ports
are currently being refurbished and upgraded, with the expectation that they will become
a shipping gateway for East Africa. The port of Pemba could come to compete with Dar
es Salaam and Mombasa, because of its deep harbour that does not require dredging and
allows it to handle large cargo ships. The rehabilitation of the harbour infrastructure of
Quelimane in the province of Zambezia and that of Nacala in Nampula province are also
potential projects that could be financed and constructed by the Chinese.
Its important to mention that China and Mozambique had new agreement on the monetary and
financial area , such us the introduction of Chinese bank system , Union Pay in Mozambique .
The commercial Bank Millenium Bim in Mozambique will be providing soon Union Pay and
Visa Cards , in my point of view that will help Mozambican people to develop more and more
the business with China , because the access to the chinese currency RMB (Chinese Yuan)

29
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