Business

· Based on the major China-Africa investment activities in late 2011 and 2012, China's investment appetite in Africa remained strong in three sectors: oil & gas, mining, and infrastructure

Major Recent Deals and Developments

· In October 2011, an official from the state-owned China Development Bank announced that it would provide a USD 1 bn special purpose loan to support small and medium-sized enterprises inEthiopia, Egypt and other African countries

· In October 2011, Australia-listed Sundance Resources announced that it would be acquired by China's Sichuan Hanlong Group for USD 1.65 bn. The deal would give Hanlong access to the USD 4.7 mn Mbalam iron mine, located in the Republic of Congo and Cameroon

· In November 2011, China signed a series of agreements with Tanzania during the 4th meeting of the China-Tanzania Joint Economic and Trade Commission. The agreements guarantee loans of about USD 95 mn to the African country, which will be earmarked towards improving the nations' public telecom networking as well as its transportation system

· In November 2011, state-owned China Petrochemical Corp (Sinopec Group) said that it had completed its acquisition of an 80% stake in Pecten Cameroon Co. in Cameroon, from Royal Dutch Shell, gaining its first oil production assets in the African country

· In November 2011, China Nonferrous Metal Mining (Group) Co Ltd, one of China's largest state-owned enterprises announced plans to invest around USD 2 bn in Zambia from 2011 to 2015, to expand operations and begin construction of infrastructure facilities, adding that it had already injected nearly USD 2 bn into the African country

· In December 2011, a subsidiary of Shanghai Construction Group Co. Ltd. announced it would acquire 60% of Eritrea-based Zara Mining Share Co. for USD 80 mn, and retain the option of further acquiring unconfirmed mines at a price of no more than USD 20 mn

· In December 2011, Ethiopia and China signed two agreements, with China agreeing to provide about USD 400 mn in loans to support the country's water projects and its Growth and Transformation Plan

· In February 2012, China National Material Group Corporation Ltd. (Sinoma) officially completed construction of a USD 1 bn cement plant in Nigeria, empowering the country with new cement export capabilities

· In February 2012, China Railway Construction Corp. announced that it had won several railway construction contracts in Africa. The contracts, worth a total of USD 1.2 bn, include projects inNigeria, Djibouti and Ethiopia

· In February 2012, the China Minmetals Corporation announced that it had already obtained more than 90% of Anvil Mining Limited, an Africa-based mining company with several metal ore mines in the DRC

· In February 2012, China's state-owned CNOOC announced that along with Anglo-Irish Tullow Oil and France's Total, it would invest in a USD 1.5 billion refinery in the Lake Albert rift basin in western Uganda

· In February 2012, a Chinese firm, Good Time Steel Zambia Limited, announced it would invest more than USD 26 million in its expansion programme to produce angle iron bars in Zambia

Africa Regional Focus: China and the East-African Community (EAC)

Brief Regional Profile

· The EAC is composed of five countries: Kenya, Uganda, Tanzania, Rwanda and Burundi who have a combined GDP of around USD 80 bn. The average GDP growth rate between the five countries was over 5% in 2011

· As East Africa's integration advances with the launching of a Common Market Protocol in 2010 and greater political and currency integration planned in the coming five years, China's investments into the region have also been increasing

· Chinese OFDI stock into the region has increased over the past decade from a lowly USD 38 mn in 2003 to around USD 691 mn in 2010, representing a CAGR of 52% over eight years. Chinese investment into the region is more diverse than in other regions on the continent partly due to region's comparatively lower natural resource endowments

· In November 2011, China signed a Framework Agreement with the EAC on economy, trade, investment and technical co-operation in order to boost Sino-EAC trade, which in 2010 stood at nearly USD 4 bn, a 39% y-o-y increase