Nations selected to demonstrate cooperation
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.
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.