Thursday , September 20 2018
Home / opinion / Tunisia joins China’s Belt and Road Initiative as it seeks to diversify trade, investment

Tunisia joins China’s Belt and Road Initiative as it seeks to diversify trade, investment

Tunisia, which boasts the most open and diversified economy in the Maghreb, took its first steps to integrate into China’s ambitious Belt and Road Initiative (BRI) strategy as it looks to expand trade and foreign investment.

Tunisian Prime Minister Youssef Chahed, in Beijing for the 2018 Forum on China-Africa Cooperation, presided over the signing of deals between Tunisian and Chinese partners, marking the country’s first tangible steps to form a “solid partnership” with BRI, Tunisia’s government said.

The deals include projects to develop Tunisia’s southern port of Zarzis into an economic and trade hub, construct a bridge linking Djerba, Tunisia’s main tourism island, to Djorf in the mineral-rich Medenine region and build a 140km railway linking the coastal region of Gabes, a hub for petrochemical and phosphate transformation industries, to Zarzis.

Tunisia and China agreed to open a car plant in Tunisia operated by the Chinese state-owned SAIC Motor Corporation Limited, which would build and export cars in the Mediterranean region and Africa.

They signed a cooperation agreement on tourism that includes plans to open an air route, with the goal of attracting more Chinese tourists to Tunisia and expanding the North African country’s tourism industry, a key earner of foreign currency.

At a cost of $4 trillion-$8 trillion, BRI aims to link 65 countries from Asia to Africa to Europe. Over the next three decades, Beijing plans to construct an expansive inland and maritime network of infrastructure, including ports, railways, roads, pipelines and utility grids to link China’s economy engine to the rest of Asia, Africa and Europe.

Most of the funding for deep-water ports, railroads and power plants will be financed by Chinese companies eyeing new international markets.

Tunisian experts and government officials are enthusiastic about the country’s role in the project, saying Tunisia would be a key strategic partner and has the potential to hugely expand its market.

The Tunisian government sees BRI as an opportunity to boost trade and investment with China, as well as expand trade and business links with countries in Africa. It also hopes the project will transform the country into a cross-trade and investment hub between Europe, Africa and Asia.

Tunisia and China have had strong ties since they established diplomatic relations 56 years ago but economic partnerships have remained slim. There are only ten Chinese enterprises in Tunisia and they post $10 million in annual turnover. There are more than 4,000 European companies in Tunisia, registering $12 billion annual turnover.

Tunisian economic experts said recent agreements to develop regions in Libya will help China, Libya and Tunisia develop links with Sahel Sahara Africa, including a railway between Tunisia and Lake Chad via Libya once stability is restored in Libya.

Tunisia joined the Economic Community of West African States as part of its drive to increase economic ties with Africa. Tunis is looking to African markets to ship goods and services worth $4 billion by 2020, an ambitious goal for a country whose worldwide exports totalled $14 billion in 2017.

Tunisia, Algeria, Morocco, Libya and Mauritania are also in the Maghreb Union but that grouping has been largely inactive, hindering economic growth between its members.

The European Union is Tunisia’s main trade partner, accounting for two-thirds of the country’s exports, so diversifying its trade market is a priority.

Tunisia was among the first countries to join the broader African Continental Free Trade Area (ACFTA), which would create a trade bloc of 55 countries with a combined GDP of more than $3 trillion. ACFTA plans to eliminate tariffs on intra-African trade and create a single continental market ensuring free movement for business.

Intra-African trade is estimated to account for 16% of the continent’s total, compared with 19% in Latin America and 51% in Asia.

TunisianMonitorOnline (The Arab weekly Written By Lamine Ghanmi)

About admin1156

Check Also

3rd edition of Open Startup Tunisia: Bob Dorf trains Tunisian coaches in mentoring

Bob Dorf, the serial entrepreneur, author, a professor at Columbia University NY, is back in ...