Na­tions se­lected to demon­strate co­op­er­a­tion

China Daily (Canada) - - ANALYSIS - By LU­CIE MORANGI lucy­morangi@chi­nadaily.com.cn

Ethiopia, Kenya, Tan­za­nia and the Repub­lic of Congo are be­ing in­vited to be the demon­stra­tion lo­ca­tions for pi­o­neer­ing in­dus­trial and ca­pac­ity co­op­er­a­tion be­tween China and Africa, Chi­nese of­fi­cials say.

China also has des­ig­nated South Africa as the bea­con of Africa’s in­dus­tri­al­iza­tion, sup­ported by its su­pe­rior in­fra­struc­ture, ad­vanced tech­nol­ogy and huge mar­ket. Bei­jing also an­tic­i­pates that Egypt, An­gola and Mozam­bique will ex­pe­ri­ence a deep­en­ing of re­la­tions with China as the Asian gi­ant in­creases in­vest­ments in pri­or­ity ar­eas such as agri­cul­ture mod­ern­iza­tion and man­u­fac­tur­ing for pro­duc­tion ca­pac­ity co­op­er­a­tion.

“Which­ever African coun­try is ready and has the co­op­er­a­tion con­di­tions in place will be among the first for China to de­velop such co­op­er­a­tion with,” say Lin Song­tian, di­rec­tor­gen­eral of the Depart­ment of African Af­fairs, part of the For­eign Min­istry.

“It needs to be em­pha­sized that for these demon­stra­tion coun­tries and pri­or­ity part­ners, China will pool re­sources to build demon­stra­tion zones, and com­bine the con­struc­tion of large in­fra­struc­ture projects such as rail­way, roads and ports with the build­ing of in­dus­trial parks and spe­cial eco­nomic zones,” he says.

Lin says China will aim “to build in­dus­trial belts along the routes and achieve sound in­ter­ac­tion be­tween large-scale in­fra­struc­ture projects and in­dus­trial de­vel­op­ment”.

He points out that China will sup­port Ethiopia in con­struc­tion of an eco­nomic cor­ri­dor along the rail­way line of Ad­dis Ababa to Dji­bouti by build­ing sev­eral in­dus­trial parks to sup­port the vi­a­bil­ity of the rail­way.

More­over, China will as­sist Kenya to de­velop ma­jor projects along the Mom­basa-Nairobi rail­way. Pro­grams such as ex­pan­sion of the Mom­basa port, de­vel­op­ment of a free trade zone and spe­cial eco­nomic zones were pro­posed.

“We will also fi­nance the Repub­lic of Congo in build­ing a new port and rail­way at Pointe-Noire port, and build a har­bor in­dus­trial park and spe­cial eco­nomic zone, so as to de­velop a new lay­out of China-ROC oil pro­duc­tion ca­pac­ity co­op­er­a­tion,” Lin says.

China-ROC Oil Co Ltd is an Aus­tralian-founded com­pany with a pres­ence in China, South­east Asia and Aus­tralia. In 2014, Fo­sun In­ter­na­tional Ltd, a Chi­nese in­ter­na­tional con­glom­er­ate and in­vest­ment com­pany, ac­quired a ma­jor stake in the com­pany.

The move­ment comes against the back­drop of a weak global eco­nomic re­cov­ery and slug­gish com­mod­ity mar­kets, cou­pled with down­ward pres­sure fac­ing China in main­tain­ing its eco­nomic growth.

Not­ing that China and Africa’s growth are in­tri­cately linked, Africa, he says, en­joys the ad­van­tages of abun­dant nat­u­ral re­sources, a pop­u­la­tion div­i­dend and great mar­ket po­ten­tial, while China has the com­par­a­tive de­vel­op­ment ad­van­tage in cap­i­tal, tech­nol­ogy, mar­ket, busi­nesses, ca­pa­ble per­son­nel and de­vel­op­ment ex­pe­ri­ence.

“African coun­tries all hope to learn from China’s suc­cess­ful de­vel­op­ment ex­pe­ri­ence and model so as to im­prove their gov­er­nance ca­pa­bil­ity, and China is will­ing to share its ex­pe­ri­ence and out­comes of de­vel­op­ment with African coun­tries with­out any reser­va­tion,” he says.

The co­op­er­a­tion path is, how­ever, not smooth and faces chal­lenges such as a lack of ex­pe­ri­ence and ca­pac­ity by Chi­nese com­pa­nies in go­ing global. In­suf­fi­cient knowl­edge about Africa com­pounds this chal­lenge.

“There are ob­vi­ous prob­lems with com­pa­nies that are in­ca­pable of go­ing global, not coura­geous enough to go global, and not aware of where to go and how to get there. Most of the Chi­nese com­pa­nies in Africa are in­volved in low-end ar­eas such as the gen­eral com­mod­ity trade, project con­tract­ing, re­sources and en­ergy de­vel­op­ment, and dare not par­tic­i­pate in oper­a­tions and man­age­ment or are un­will­ing to par­tic­i­pate in in­de­pen­dent in­vest­ment and oper­a­tions,” he says.

African gov­ern­ments, on the other hand, are re­luc­tant to open their mar­kets, says Lin. “They like for­eign as­sis­tance and in­vest­ment, but are not will­ing to see in­vestors mak­ing money. Sec­ond, laws and reg­u­la­tions, pref­er­en­tial poli­cies and gov­ern­ment ser­vices to pro­mote and pro­tect for­eign in­vest­ment need to be im­proved. In­suf­fi­ciency in re­lated laws and poli­cies and in­ad­e­quate en­force­ment by the gov­ern­ment are com­mon prob­lems for African coun­tries. Third, un­der­de­vel­op­ment in in­fra­struc­ture and a lack of out­stand­ing per­son­nel are on­go­ing prob­lems,” he says.

Un­der­de­vel­oped in­fra­struc­ture, short­ages of skilled per­son­nel, fre­quent change of rul­ing par­ties lead­ing to in­sta­bil­ity and in­con­sis­tency in gov­ern­ment poli­cies are other chal­lenges, he says.

ZAI JIANLAN / XIN­HUA

A man takes a look in­side a Sa­suka mini bus made at Bei­jing Au­to­mo­tive In­dus­try Hold­ing Co’s plant in South Africa. African coun­tries will ex­pe­ri­ence deep­en­ing of re­la­tions with China as the Asian gi­ant in­creases its in­vest­ment in pri­or­ity ar­eas.

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