ZHAO ZHONGYI: China-Africa co-operation strengthens investment and promotes mutual benefit
A report highlights the contribution of Chinese investment and co-operation in Africa’s economic and social development
The China-Africa Business Council recently held a ceremony to launch the Chinese Investment in Africa report. People from different walks of life speak positively of the event, saying investments by Chinese companies in Africa are mutually beneficial, meet Africa's development needs, make positive contributions to local industrialisation, employment and livelihood improvement, and achieve fruitful results.
The report, written by more than 50 experts and researchers organised by the China-Africa Business Council, surveys more than 350 Chinese companies and 320 entrepreneurs. Through 63 cases, the report demonstrates the development of Chinese companies’ investments and co-operation in Africa and their contribution to the continent's economic and social development. It summarises the experience of China-Africa investment co-operation, and makes suggestions for the future development of Chinese investment in Africa. According to the report, Chinese companies have become one of the driving forces for the inclusive development of the African economy.
First, China's investment in Africa is steady and strong. Since the Forum on China-Africa Co-operation was established 20 years ago, the flow of China's direct investment in Africa has been growing by more than 25% on a yearly average. Despite the impact of Covid-19, China's investment in Africa has increased from $2.71bn in 2019 to $2.96bn in 2020. It is estimated that by the end of 2020, China’s direct investment stock in Africa was about $56bn, with private companies accounting for about 70% of the total.
Chinese investment in Africa has entered a development stage of “small steps and fast walks”. In particular, Chinese private companies have gradually become the main force in China-Africa investment co-operation, undergoing a transition from “going to Africa” to “settling in Africa” and then to “rooting in Africa”, which has promoted the industrialisation process and created job opportunities.
Second, China and Africa are highly complementary in development strengths. Africa, with rich resource endowment and a huge demographic dividend, is seeing accelerating urbanisation and a burgeoning manufacturing sector and is benefiting from a new round of technological revolution, while China enjoys strengths in capital, technology and development experiences. Resource allocation is significantly more efficient through China-Africa co-operation. As the relationship continues to deepen, China-Africa co-operation has experienced a development path from trade to industrial investment, from low-end industry to high-end manufacturing, and from primary and secondary industries to tertiary industries. While Chinese companies, especially private firms , are centred on traditional investment fields, they are also focusing on new sectors such as medium-high technology manufacturing, medical treatment and medicine, the digital economy and the aviation industry.
Third, China's investment co-operation with Africa is mutually beneficial. China is working to foster a new development paradigm, with domestic circulation as the mainstay and domestic and international circulations reinforcing each other. The investment by Chinese companies in Africa not only boosts China's own economic development and helps to smooth global industrial chains and facilitate export from both sides, but also actively carries out the transfer of technology, strengthens local procurement, hires local employees, provides financial, technical, and infrastructure support to African countries, and helps African countries to transform their resources into market competitiveness. This makes a remarkable contribution to social stability and economic prosperity in African countries.
The AU’s “2063 Agenda” lists the achievement of inclusive economic growth as one of its important goals. Chinese investment in Africa has become one of the driving forces for the inclusive development of the African economy. It has promoted Africa’s industrialisation process, created employment opportunities, boosted infrastructure construction and improved the management level of industrial parks of the host country in Africa.
As the first major economy to resume growth since the outbreak of Covid-19, China will give full play to its ultra-large market advantages and domestic demand potential, and comprehensively deepen China-Africa practical co-operation and create new highlights in China-Africa economic and trade co-operation. The Chinese government has been encouraging companies to actively respond to Africa's development strategies, blend in with local communities, take the initiative in fulfilling social responsibilities and deliver benefits to local people to make a contribution to independent and sustainable development in African countries. I believe China-Africa investment co-operation is promising and will improve in both quality and quantity in the future, promoting continued progress in practical co-operation.
• The author is minister counsellor of the Chinese embassy in SA.