Chinese trade zone to bolster Mauritius economy

In this February 17, 2009 file photo, visiting Chinese President Hu Jintao (L) meets with Mauritian Prime Minister Navinchandra Ramgoolam in Port Louis, Mauritius. [Xinhua]

PORT LOUIS: A planned Chinese trade and development zone in Mauritius is expected to strengthen the Indian Ocean island's $9 billion economy, the Mauritian Prime Minister said on Wednesday.

The $820 million Jinfei Economic and Trade Cooperation Zone is the largest ever injection of foreign cash into Mauritius and will provide a launch pad for Chinese operations in the region.

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"The zone will accelerate the diversification and the modernisation of the economy, improving the global competitiveness of both the manufacturing and services sectors," Navinchandra Ramgoolam said as he laid its foundation stone.

Two new investors, Taiyuan Iron and Steel Company and the Shanxi Coking Coal Group, will take a 50 percent stake and 30 percent stake respectively, Mauritius' Board of Investment (BOI) said. Tianli will retain a 20 percent share.

The Zone is expected to generate exports worth 6-7 billion Mauritius rupees ($193-$225 million) per year.

"That figure represents more than a third of our export earnings in 2008," said Ramgoolam.

Officials expect the economy to grow by 2.5 percent this year, down from more than 5 percent during the last three years, hampered by the global economic downturn.

The BOI is turning towards a more service-led economy to improve resistance to external shocks and increase the island's competitiveness globally.

Trade between Mauritius and China increased by 11.7 percent in 2008 from the previous year to reach $323 million, China's President Hu Jintao said in Mauritius at the end of a four-country African tour in February.

Ramgoolam said investment inflows from China had more than doubled during the first six months of 2009 on 2008's total.

"FDI (from China) increased from 78 million rupees in 2008 to reach 171 million rupees in the first half of this year," he said.

The BOI said the trade zone would incorporate manufacturing, logistics, distribution, commercial and hospitality components.

"Because a lot of services are involved, the zone will not just be targeting east and southern Africa. We are looking at the export of services to a global market," Dev Chamroo, Director of Planning and Policy at the BOI, told Reuters.