Why do African countries welcome Chinese companies to “root in Africa”

The report “Chinese Enterprises Investing in Africa” recently released by the China-Africa Private Chamber of Commerce shows that since 2000, under the promotion of the Forum on China-Africa Cooperation, Chinese private enterprises have gradually become ChinaAfrica economic and trade investor. The main force of cooperation is undergoing a transition from “going to Africa” to “settled in Africa” and then to “rooting in Africa”.

At the press conference of the report, many officials from African countries expressed their welcome to Chinese companies to “take roots in Africa” for long-term investment and cooperation.

What’s the reason?

Many Chinese and foreign political and business people, experts and scholars gave their answers.

Strong and stable

Over the past 20 years, China’s investment in Africa has grown steadily. China-Africa trade volume has increased by 20 times, and China’s direct investment in Africa has increased by 100 times. By the end of 2020, China’s direct investment in Africa reached 47.35 billion U.S. dollars. According to the report, in the face of the spread of the epidemic, the global economic slowdown, trade protectionism, African debt and other challenges, Chinese companies still maintain an optimistic willingness to invest in Africa, and continue to strengthen capacity building in response to their own problems and shortcomings, explore tripartite cooperation, and formulate long-term business planning, integrated into the economic and social development of Africa.

Vera Songwe, United Nations UnderSecretary-General and Executive Secretary of the Economic Commission for Africa, believes that the cooperation between China and Africa is “very strong”. In the context of the epidemic, Chinese companies continue to invest in Africa, which has created many job opportunities for Africa. At the same time, the cooperation between the two parties always pays attention to and is committed to achieving sustainable development. Songwe also said that the Belt and Road initiative has brought huge benefits to both Africa and China. “Through online e-commerce, coffee in Rwanda, Ethiopia and other countries is now very popular in China. We have more and more African products sold to China.” Wu Peng, Head of the African Affairs Department at China’s Ministry of Foreign Affairs, pointed out that in the 20 years since the establishment of the Forum on ChinaAfrica Cooperation, China’s direct investment in Africa has grown at an average annual rate of more than 25%.

Although global investment in Africa has declined due to the impact of the epidemic, China’s investment in Africa has grown against the trend from approximately US$2.7 billion in 2019 to nearly US$3 billion in 2020.

“These brilliant performances have brought hope for economic recovery under the gloom of the epidemic.”

Facilitate transformation

The report believes that in the process of investing in Africa, Chinese companies have contributed to Africa’s industrialization and improvement of people’s livelihoods, and they have become one of the driving forces for inclusive economic development in Africa.

“China’s investment in Africa has achieved a qualitative leap. We have seen Chinese-funded companies build a number of high-quality flagship projects, which have promoted the development of emerging markets in Africa.” Wu Peng said. We can see that many Chinese companies are already in Africa. “Rooted” and made a long-term investment plan for Africa.

“We welcome more investment.” Teshome, Ethiopian Ambassador to China, said that Chinese companies have played an important role in promoting the modernization of African infrastructure. “Chinese companies have experience, technology, and capital. These are things that African countries need very much, so that they can help Africa transform.”

Adesina, President of the African Development Bank, said that more and more African companies are now seeking to cooperate with Chinese companies.

“While paying attention to the traditional investment fields in Africa, Chinese companies have begun to focus on the development and cooperation in new areas such as high-tech manufacturing, medicine and pharmaceuticals, digital economy, and the aviation industry.”

Yao Guimei, a researcher at the Institute of West Asian and African Studies of the Chinese Academy of Social Sciences, said that China pays special attention to the construction of electricity and energy in Africa, not only improving the power supply capacity of African countries, but also improving the energy structure of Africa.

Mutual benefit and win-win

Lin Yifu, Honorary Dean of National School of Development at Peking University, believes that China-Africa investment cooperation is mutually beneficial and win-win.

Chinese companies investing in Africa have not only promoted China’s own economic development, but also provided African countries with financial and technical support to help them transform their superior resources into market competitiveness.

“There is a Chinese proverb,‘Teach a man how to fish rather than give him a fish’. I hope Chinese companies can empower us and teach us ‘how to fish’. This will be a win-win partnership.” Adama Compaore, Burkina Faso’s Ambassador to China, said that all parties in Burkina Faso appreciate the investment activities of Chinese enterprises, and hope to further attract Chinese companies to invest in Burkina Faso, especially to invest in Africa as a whole.

Jeffrey Sachs, Director of the Center for Sustainable Development at Columbia University, believes that China’s experience in poverty alleviation, investment and technology can inspire future development in Africa, and Africa can also follow China’s footprint to achieve great economic development.