Preserving the free trade system
The success of the Algeria-China economic partnership could serve as a model of cooperation with other developing countries on the continent
In order to better understand the problems that have emerged with the globalization of international relations and international trade, it is necessary to recall that the world is currently experiencing an upheaval in the way international trade is taking shape. The fundamentals of trade are being called into question by, in particular, the United States administration, which has revised upwards customs tariffs with all countries that trade with it. And the rates are not a simple upward adjustment, but sometimes dissuasive, like those in the case of China.
It is important to emphasize that the founding agreement of the World Trade Organization on Jan 1, 1995, is to use trade as a means of improving people's living standards, creating jobs and promoting sustainable development.
Moreover, the second G20 Development Working Group meeting in April called for safeguarding the multilateral trade system, opposing unilateralism and trade protectionism. Chinese representatives emphasized that international trade is a key driver of global development. They stated that the US government's recent push for "reciprocal tariffs" has seriously undermined the international trading system, disrupted global industry and supply chains, and dealt a lasting blow to the world economy.
China has called for enhanced cooperation among all parties to resolve trade disputes through consultations based on equality, mutual respect and mutual benefit. China's courage and determination have drawn worldwide attention to uphold international fairness and justice, as well as safeguard the global economic and trade order. On their part, African countries' commitment to the fundamental principles of sovereignty, fairness and justice is welcomed. China and Africa have firmly expressed their opposition to any concessions at the expense of other countries' interests.
In the face of attempts by some countries to disrupt the existing international economic and trade order through tariff measures that undermine the common good, the multilateral trading system is under its gravest threat since its inception. Safeguarding the multilateral trading system, primarily embodied by the WTO, is crucial for global economic stability and growth. It involves upholding the system's core principles, strengthening its rules and addressing challenges to its effectiveness. This includes promoting open, non-discriminatory and predictable trade relations, as well as fostering cooperation among nations to manage trade tensions and ensure inclusive development.
In order to further consolidate the multidimensional ties between China and Africa, the 2024 Summit of the Forum on China-Africa Cooperation was held in Beijing. At the forum, Chinese President Xi Jinping announced to the heads of state and government China's promises to engage more with Africa. He said that "China and Africa's joint pursuit of modernization will set off a wave of modernization in the Global South".
This cooperation spirit also echoes with Algeria-China cooperation. The intensifying political cooperation and deepening economic partnership between Algeria and China are being deployed in specific projects recently.
Algerian President Abdelmadjid Tebboune paid a state visit to China in July 2023. He met with President Xi, and the two leaders discussed strengthening cooperation between their countries. It is in this spirit of enhanced cooperation that the Algerian Investment Promotion Agency has approved 42 Chinese investment projects worth $4.5 billion since creating the agency in November 2022 until last March.
These projects are divided to direct investments (22 projects) and partnership projects between Chinese companies and national operators (20 projects), most of them in the industrial sector, which testifies to the growing interest of Chinese operators in direct investment in Algeria. Industry is the main sector benefiting from these investments, but other sectors such as automotive, agriculture and technology are also concerned. Investments take the form of factories, joint ventures and partnerships with local companies. For instance, a car production plant in partnership with Chery is planned with an investment of $110 million in Bordj Bou Arreridj. A joint venture between Fondal and Jetour will produce vehicles in Batna. And a partnership between the Iris group and Chery for the creation of a factory in Algiers is expected to create 1,200 direct jobs.
Apart from deepening economic relations between Algeria and China, these investments aim to strengthen Algerian industry, create jobs and facilitate technology transfer.
At the same time Algeria is seeking to attract foreign investment to diversify its economy and boost growth against the backdrop of the frictions arising from protectionist measures resurfacing in the global economy, coupled with political tensions, which contributes to instability in trade flows.
Algeria should further deepen its ties with China and other Global South countries to accelerate its industrial transformation in the spirit of cooperation and strengthened partnership. Just as Chinese Premier Li Qiang said at the 16th Annual Meeting of the New Champions, also known as the Summer Davos, in Tianjin in June, "the global economy is deeply integrated. We all have a stake in each other's success. No country can grow and prosper in isolation from the world". And with the goal of building a community with a shared future for mankind, the success of Algeria and China's economic partnership could serve as a model of cooperation with other developing countries on the continent.
The author is an emeritus professor at the University of Tlemcen, Algeria, a senior researcher at the China-Africa Economic and Trade Research Institute at Zhejiang Gongshang University and a counselor of China-Africa Bridge. The author contributed this article to China Watch, a think tank powered by China Daily.
Contact the editor at editor@chinawatch.cn.
