Under The Same Blue Sky

The World Bank and Beijing are in discussions about setting up low-cost factories in new industrial zones in Africa to help the continent develop a manufacturing base and reverse its declining share in global trade.

Robert Zoellick, the president of the World Bank, said Beijing had shown “strong interest” in proposals to set up manufacturing bases to help African countries achieve high growth paths similar to Asian ones.

“There is not only willingness but strong interest among some in China and I’ve discussed with the minister of commerce, Chen Deming, that there may be possibilities of moving some of the lower-value manufacturing facilities to sub-Saharan Africa – toys or footwear,” Mr Zoellick told the Financial Times.

Chinese officials and academics have been debating in recent months proposals to use the country’s vast foreign exchange reserves to try to stimulate demand in developing countries – ideas sometimes referred to as “China’s Marshall Plan”.

Last month, Wen Jiabao, China’s premier, pledged $10bn in low-cost loans over the next three years, an end to tariffs on 60 per cent of exports from the poorest nations and debt forgiveness for several countries.

Beijing’s loans to governments that come free of western-style political conditions have attracted criticism for propping up unpopular regimes.

Some African leaders fear Chinese competition in areas such as shoes and textiles is undercutting Africa’s weak industrial base. Chinese officials are also worried that their relationship with Africa could be seen as a new form of colonialism.

Mr Zoellick said African countries needed to put in place infrastructure – such as power, transport and efficient customs regimes – to attract the transformative Chinese investment.

“Some of these Chinese industries have the benefit of knowing how to do more labour intensive manufacturing and they have the marketing networks and this is always a challenge when you start an operation,” the former US Trade Representative and deputy Secretary of State said.

But any plan to shift production to Africa that goes beyond the symbolic is likely to meet resistance. Beijing has opposed growing international pressure to appreciate its currency partly because of fears of job losses in export industries.

Provincial governments in the interior of China are also desperate to attract jobs to their areas as labour costs in the coastal regions increase.

Moreover, the prime motivation of the Chinese Marshall Plan has been to find ways to create new sources of demand for Chinese factories, not to shift their output elsewhere.

The Commerce Ministry in Beijing declined to comment.

China announced yesterday that it intended to slash its greenhouse gas emissions per unit of economic output by 40-45 per cent by 2020, a key requirement for reaching a global deal to tackle climate change at December’s Copenhagen conference.

Beijing also said that Wen Jiabao, the premier, would attend the Denmark talks. Analysts said the decisions underlined the seriousness with which Beijing is treating the climate change debate.

The carbon intensity target means reducing the amount of carbon produced per unit of gross domestic product, and is not the same as cutting emissions. Indeed, China’s economy will double in size by 2020 at current growth rates and its emissions will be considerably higher even if it meets the new target.

The announcement followed a pledge on Wednesday from the US to cut its emissions by 17 per cent by 2020, provisional on the passage of domestic legislation.

Yvo de Boer, the United Nations’ top climate change official, who will steer the Copenhagen talks, said: “The US commitment to specific, mid-term emission cut targets and China’s commitment to specific action on energy efficiency can unlock two of the last doors to a comprehensive agreement.”

But he said some crucial issues remained unresolved, particularly the question of developed countries giving financial assistance to the developing world to enable the latter to cut emissions and cope with the effects of global warming.

A senior US official told the Financial Times the US had no imminent plans to table a commitment on finance.

China has not yet set a target date for its carbon emissions to peak, although there has been speculation that Chinese negotiators would make such a commitment at Copenhagen.

The commitment to cutting greenhouse gas intensity is the latest evidence that Beijing is putting in place robust policies, but some pushed Beijing to go further. “Given the urgency and magnitude of the climate change crisis, China needs stronger measures,” said Ailun Yang of Greenpeace China.

One European diplomat in Beijing noted the new target suggested China would achieve smaller gains in energy efficiency over the next decade than it was currently pushing industry to achieve. “They have done a lot of the easier things already.”

European Union leaders on Thursday night awarded two of its top jobs to politicians relatively unknown on the international stage.

At a Brussels summit the EU picked consensus builders rather than star names, choosing Herman Van Rompuy, Belgium’s centre-right prime minister, over Tony Blair as the EU’s first full-time president.

Britain secured the position of foreign policy supremo for Lady Ashton, the EU trade commissioner, who has never held publicly elected office and has only been in her post for a year.

Gordon Brown admitted disappointment that Mr Blair had failed, but claimed Lady Ashton would give Britain “a powerful voice” in EU foreign affairs and in her dual role as European Commission vice-president.