Visit by “future leader of China” to Angola boosts bilateral relations

31 January 2011

London, United Kingdom, 31 Jan – The visit to Angola by Xi Jinping, China’s vice president and the man seen as the likely successor to the current president, boosted bilateral relations, whilst Luanda is seeking extensions of credit lines from Beijing, according to the Economist Intelligence Unit.

Following the visit to Angola by “the future leader of China,” said the EIU analysts in their latest report on Angola, “Angola’s relations with China continued to get stronger.”

During the visit, at the end of November, Jinping visited the Kilamba Kiaxi housing project, in the south of Luanda, where Chinese construction group CITIC is building 20,000 apartments.

New cooperation deals were also signed focused on the transport, mining and construction sectors, according to the EIU analysts.

At the time Jinping noted that China had provided Angola with loans totalling US$10 billion and said that Angolan companies such as Sonangol, focusing on China was a new chapter in Chinese-Angolan relations.

According to figures published at the time, the number of Chinese companies operating in Angola totals 450, of which 400 are private and the remainder state-owned.

In 2010, trade between Angola and China reached US$24.8 billion, a rise of 45.4 percent against 2009 when trade totalled US$17.0 billion.

According to the EIU, Angola is interested in extending credit lines with its partners, “especially China, Brazil and Portugal,” as well as providing more funding to the Paris Club members.

Angolan sovereign bonds were recently given a B+ rating by the main rating agencies at a time when the country is “keen to get funding from the international bond market,” said the EIU analysts.

However, the rating will be under pressure fur to recent developments in public accounts, specifically the accumulation of debts to private companies, and thus the government is likely to delay its first bond issue until the end of 2011.

According to the EIU Angolan economic growth will increase from 2.9 percent last year to 7.3 percent this year.

The launch of the liquid natural gas project in 2012 will decisively contribute to growth of 8.5 percent in 2012 and to average GDP growth of 7.1 percent in the 2013-2015 periods, according to the same source.

Another important development for the Angolan economy in the last month has been maintenance of the OPEC quota in 2011, which is in line with the aims of the Angolan oil minister.

The quota has been kept a secret, but analysts estimate that it lies between 1.52 million barrels per day and 1.66 million barrels, below the country’s production level, which in 2010 is expected to have been around 1.84 million barrels.

Following some technical problems at the end of the year, this year’s production is expected to total 1.93 million barrels per day, driving an upturn in the economy. (macauhub)