Algeria recently signed a memorandum of understanding between the National Iron and Steel Corporation "Feral" and a consortium of Chinese companies;

In order to exploit the iron mine in Ghar Jbeilat in the Tindouf Governorate (1800 km southwest of the capital), the project will be jointly funded by Algeria and China, within the limits of $ 2 billion.

The new partnership with the Chinese side comes a few months after the activation of the deal to accomplish the Hamdaniya port in the province of Tipaza (50 kilometers west of the capital), which Algeria has signed since January 2016 with two Chinese institutions in accordance with the 49/51 rule.

However, it was disrupted by the outbreak of the popular movement on February 22, 2019, due to the entry of Algerian contractors from the entourage of Said Bouteflika, brother of the former president.

And the Algerian Ministry of Transport announced that the cost of the port would be in the range of $ 3.3 billion, and that it would be financed under a long-term Chinese loan, while its exploitation included the "Shanghai Ports" company.

However, President Abdel Majid Tebboune ordered the government on June 28 to re-study the port project with the Chinese partner according to new and transparent rules.

The "Chinese Silk Road News" network reported that the Hamdaniya port is part of the "Belt and Road" initiative, and is among the most important projects devoted to transporting goods, which will enable it in the future to conduct trade exchanges with Africa and Europe.

Great deals

China has previously won major deals in Algeria, such as the completion of the Sheraton Hotel and the Algiers Mosque at a cost of more than one billion dollars, the motorway over a distance of 1,216 kilometers at a cost of $ 19 billion, and the expansion of Algiers International Airport by $ 650 million, not to mention hundreds of thousands of housing units.

In early October, Algeria signed an economic and technical cooperation agreement with the Chinese Agency for International Cooperation for Development, and this occurs at a time when Algeria will review the customs dismantling calendar with the European Union, according to its economic interest.

It is noteworthy that the European Union is Algeria's main trading partner, with exchanges between the two parties amounting to 22.72 billion dollars, according to the Ministry of Finance's 2020 report.

But another outcome of the Ministry of Trade in the same period puts China in the lead, as the first financing provider to Algeria with 17%, equivalent to $ 9 billion.

The highway in Algeria was completed by the Chinese and extends for a distance of 1,216 km, at a cost of 19 billion dollars (Al-Jazeera)

Natural alliance

Regarding the backgrounds and prospects for the Chinese giant’s entry into the Algerian market, Youssef Meli, President of the Forum for Investment and Enterprise Development, considered Algeria to be one of the leading central countries, given its historical weight and its sovereignty orientation, compared to many other African countries.

He believes that today, within the framework of its natural and historical alliance with China, it can lead the locomotive of economic development, which Beijing is leading "under the principle of instead of giving it a fish taught him to fish, which is completely different from the culture of the rest of the Western economic interventionists based on exploitation."

Given its strategic location in Africa and its parallels with southern Europe, Algeria today is the focus of the world's economic powers, and the Grand Cherchell port project comes as a support for the Algerian-Chinese cooperation policy, which makes southern Europe intersect with North and Central Africa, as analyst Youssef Melli says.

In a statement to Al-Jazeera Net, he asserted that the Silk Road theory is a reversal of the old economic concepts based on the idea of ​​exploitation without development, and thus it converges with Algerian politics.

The spokesman believes that Chinese investments in Algeria constitute an economic encirclement of southern Europe, as the European market will be within a stone's throw of Chinese goods.

And what is currently going on in the minds of Algerian decision-makers - according to expert Milli - of projects to create an economic capital in the south of the country, and an international airport with world-class specifications in the city of Tamanrasset (on the border with Mali), will make the economic future of Africa and the whole world change towards a young continent full of all natural resources. Compared to one that is exhausted by aging and slowed growth

Chinese advance

On the other hand, and about the possibility of this impact on the French and European influence in general, the financial expert at the World Bank, M'hamed Hamidouche, said that China won in its trade balance with Algeria 4.202 billion dollars during the 11 months of the year 2020, which made it in the forefront compared to other countries. Europe has a competitive customs advantage, according to the partnership agreement.

On the other hand, France's exports to Algeria, in the same period, recorded an amount of $ 3.364 billion, which made it lose its first rank as a supplier to Algeria, while Italy, France and Spain remain among its customers, with imports estimated, respectively, at 3.12, 2.94 and 1.96 billion dollars. , According to the same time span.

Hamidouche believes that the decline of France as the first supplier to Algeria, and with it the European countries, is due to the decline in the purchasing power of Algerian families.

Which made it prefer the price over the quality and international standards imposed on goods in Europe, in addition to the flexibility of declaring the prices of goods applied in China, as well as the strength of the dollar in trade exchange with Asian countries, against the euro, which has become an obsession for many commercial enterprises that have become accustomed to the Algerian market.

70 thousand Chinese were working in the development of infrastructure and major facilities in Algeria (the island)

Special circumstance

As for the tenders that Chinese companies won in Algeria, they came in a special circumstance, as exchange reserves reached $ 200 billion.

Hamidouche considers that the existence of such companies will not recur unless Algeria accepts Chinese loans to finance basic infrastructure projects, and this is not possible in the short term, as long as it commits itself not to going into external debt.

In a statement to Al Jazeera Net, he stressed that China's appetite is open to natural primary resources and agricultural lands for its food security.

However, this remains a circumstantial policy for Algeria;

To compensate for the deficit in exports by exploiting the underground capabilities, as for agricultural areas, they are a closed market for negotiation, even in the form of model projects, as he put it.

In conclusion, in the opinion of the expert Hamidouche, if the monetary policy of the Algerian central bank adopts the strengthening of the dinar, and the government manages to reduce real inflation, this will be reflected automatically in the interest of European countries, and if one of them is absent, the orientation towards Asia will keep China, Turkey and the UAE.