News and Views

Japan Seeks African Trade Inroads at Summit as China Dominates

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Japanese Prime Minister Shinzo Abe will meet one-on-one with 40 African leaders this weekend as his government looks to catch up with China in pursuing resources, markets and influence on the continent.

Abe is set to lay out his Africa policy in a speech at the June 1-3 Tokyo International Conference on African Development, attended by officials from about 50 nations. The meeting, held every five years, has been the biggest African development event outside the continent itself since it began in 1993.

Africa’s economic growth is luring Japanese exporters, while the government wants to tap the natural gas and oil there after the 2011 Fukushima disaster led to the closing of Japan’s nuclear plants. Chinese firms fueled $138.6 billion in China-Africa trade in 2011, nearly five times Japan’s commerce with the continent, according to the Ministry of Foreign Affairs, citing International Monetary Fund data.

“China has become a far greater presence than Japan in Africa — it’s overwhelming,” said Kazuyoshi Aoki, a professor at Nihon University in Tokyo who specializes in African matters. “The difference lies in the level of determination. There’s a different perception of Africa’s importance.”

Abe hasn’t visited Africa since taking office in December, in contrast with Chinese President Xi Jinping, who stopped in Tanzania, the Congo Republic and South Africa in March as part of his first trip abroad less than a month into office.

While in Africa, Xi reiterated a pledge for $20 billion in loans over the next two years. China also paid for and built the African Union’s $200 million headquarters in Addis Ababa, Ethiopia that opened last year.

Current Purchases

Most of Japan’s current purchases from Africa consist of metals and fuels, including 10 percent of last year’s liquefied natural gas imports, according to Ministry of Finance data compiled by Bloomberg. Japan exports mostly vehicles and machinery, according to the Japan External Trade Organization.

Japan is now also seeking rare earth minerals, and agreed with South Africa this month to extend joint exploration for the elements used in high-tech manufacturing as Japan seeks to escape its reliance on imports from China.

The conference renews focus on Africa as a business partner and not just an aid recipient. For the first time, corporations will be invited to an official session, Masaji Matsuyama, a parliamentary senior vice-minister for foreign affairs who holds responsibility for Africa, said in an interview yesterday.

Abe will hold individual meetings with 40 African leaders, the Ministry of Foreign Affairs said. President Jacob Zuma of South Africa is attending, alongside the presidents of Uganda and Zambia.

Private Sector

“The number one request from African nations is promotion of trade and investment,” Matsuyama said. He said the government’s role will be to smooth the way by investing in infrastructure and sealing accords to protect private investments from the risk of sudden nationalization.

Japan reached an investment agreement with Mozambique that will be announced soon, he added. Abe will pledge Y1 trillion ($9.9 billion) in aid over 5 years for African states, Kyodo News reported today, citing his remarks to be made to the conference.

Abe stresses the role of the private sector in building ties with Africa. The conference will emphasize “public-private partnerships and enlisting private-sector support to ensure that African countries and communities have efficient markets on a nationwide, region-wide and continent-wide scale,” Abe wrote in an opinion piece in the Wall Street Journal.

’Invisible’ Japan

Japan has missed opportunities for overseas investment while China became more aggressive abroad, Singaporean Prime Minister Lee Hsien Loong told a conference in Tokyo this month. He said leaders turned their attention inward amid the economic downturn.

“You have not been able to develop an overall national Japanese perspective of what is in Japan’s interests and make a decision,” Lee said. “The Chinese were able to do that.”

As an example, he said Japan is yet to sign an investment accord with the Association of Southeast Asian Nations, 13 years after announcing a plan to do so.

Asked about a rivalry between China and Japan in Africa, South Africa’s Ambassador to Tokyo said more top-level visits were needed to build relationships. Mohau Pheko told a press conference in Tokyo on May 21 that her suggestions about such trips had met with a negative response from the Japanese government.

“China does service the relationship,” Mohau Pheko said on May 21. “Many top level visits. Japan is invisible,” she added. “But you want my minerals at the same time. Terrible thing.”

To contact the reporters on this story: Isabel Reynolds in Tokyo at ireynolds1@bloomberg.net; Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

 

 

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