China Daily Global Edition (USA)
BEIJING SUMMIT
A1: For many years China’s strategy for commercial engagement with Africa focused on infrastructure investments. While this model has been the centerpiece, people have paid too much attention to infrastructure investments, meaning other trends have gone largely unnoticed. For example, more and more large Chinese technology companies such as Huawei are investing in Africa, and several small and mediumsized enterprises are expanding their presence on the continent. Thus, while the trend of infrastructure development will continue to expand, it will do so alongside broader corporate investments in other sectors.
A2: A greater concern is rising debt levels on the continent. China has long been a quick and easy lender for African countries.
There is growing competition for infrastructure projects in Africa. Countries such as Turkey, France and South Korea, among others, are seeking to compete with Chinese firms for infrastructure contracts.
In terms of potential collaboration, there is room for three-way partnerships between African firms, Chinese corporations and global technology companies.
A3: Generally, low agricultural yields in Africa are due to a lack of adequate irrigation infrastructure or a lack of fertilizer. US and Chi-
former research fellow at the University of Melbourne and a China and Africa-focused development economist
A1: The total package of aid, trade and investment is large on the African economic horizon and one might expect more investment in African countries by Chinese companies in the coming years. At the same time, China has promised to buy more African goods (not just commodities) and there is a growing services relationship.
A2: China has some comparative advantages in infrastructure construction and has been willing to fund (lending-based) infrastructure in African countries. Most of China’s own infrastructure construction by comparison was domestically financed.
Thus, on the one hand, African countries need infrastructure, but building this with foreign funding presents somewhat of a financial/fiscal tightrope. In any case, it is hard to generalize about other parties investing in Africa because each bilateral/sub-regional case has its own story. nese companies, as well as their respective governments, can collaborate to increase productivity in African agriculture. China has had a lot of experience in improving productivity in, for example, wheat crops, while the US has long held a competitive advantage in agribusiness.
Finding a way to increase productivity through technological advancement is also a great area for collaboration. There are many new firms that have developed apps that convey valuable information to farmers working to employ modern agricultural techniques, monitor the weather, effectively use new farming equipment, assess prices, source goods such as fertilizer, and more.
A4: Successful industrial parks require three things: policy certainty, good infrastructure to support continued operations, and finally, a good anchor tenant. This tenant will be there for the long term and will be so successful that it manages to bring in other companies that also stay there for the long term.
All industrial parks will have challenges at some point. With manufacturing in Africa, questions over labor relations such as minimum wages and so on will no doubt arise, matters that commonly crop up with the development of large industrial zones.
A5: Many African governments would like to see China buying more products made in Africa and increasing imports of finished products that have been made on the continent.
So African governments would like to see a change in the nature of trade with China, and not just to be an exporter of primary resources. They would be interested in seeing if Chinese companies would help them develop the capacity to refine resources in-country, adding value to those resources in doing so.
A3: China is a wellknown, recent story of how it transformed the productivity of its own agricultural sector.
That story is unique, so it cannot simply be taken wholesale and replicated. But it does set an important and powerful macro example of such a transformation.
Again, Africa has more than four dozen countries, and it is thus difficult to generalize where related policy takeaways may apply across a whole continent.
A4: Improving the foreign investor competitiveness of African countries would obviously help, across countries and over time.
The challenge is to weigh the short and long-run interests of different communities within the nation in that context also.
China was able to let some get rich first, but not all countries can do this and enjoy continuous political stability. African countries will each write their own story.
A5: China’s trade with all countries has grown phenomenally over 40 years. Related trade growth with African countries has mostly taken place over the second half of that 40 years.
If e-commerce can facilitate market access within countries and regions, then individuals and communities can, in theory, be more quickly empowered to take advantage of markets, and ideally ultimately be encouraged to increase their productivity, enjoy rising incomes, etc. Ian Goldin,
A1: Economic, diplomatic, and cultural ties between China and Africa have flourished in recent years and show no sign of weakening.
Long-term infrastructural projects such as the Belt and Road Initiative, together with intensified financial relations, will be crucial in deepening the China-Africa relationship. What makes it so durable and mutually beneficial is precisely the fact that the promotion of infrastructural, entrepreneurial and institutional development is given priority through the involvement of the private sector and governmental support.
Two elements that will be essential for the furthering of China-Africa relationships are environmentally appropriate development and cultural exchange.
A2: So far, the greatest obstacles to closing the African infrastructural gap have been a limited domestic revenue base to pay for services in many African countries and patchy institutional capacity and governance.
Foreign investment, which China has contributed significantly, has helped address the scarcity of funds. These have not only improved growth prospects, but also spurred job creation and provided opportunities for local entrepreneurs and the development of skills.
A3: As the African population grows and the continent becomes increasingly urbanized, achieving food security and improving agricultural productivity will be of utmost importance.
For many African countries food security implies a greater capacity to trade and import the necessary items of food, with improved transport, storage and other facilities.
In a number of African countries there has been significant success in rural development. The sharing of agricultural expertise and training opportunities offered by Chinese investment are important for sustaining this trend and raising agricultural productivity.
A4: Many African economies still predominantly rely on primary product exports. This poses risks to the continent’s economy arising from potential commodity price slumps. Diversification away from commodities, through beneficiation and adding value through the processing of commodities is important, as is horizontal diversification into manufacturing, tourism and services.
Africa should exploit its comparative advantage in labor-intensive industries, yet the focus should remain on environmentally sustainable production, and aim for growing human capital.
professor of globalization and development, University of Oxford
A5: Trade has grown, but since the slump in commodity prices in 2014, the value of trade has been decreasing. The vertical diversification of trade to increase the value-added content through the processing of commodities is important. So too is horizontal diversification, into services and manufacturing.
E-commerce certainly offers opportunities for Africa, but technological change and in particular robotics and artificial intelligence also pose risks. The challenge for China and African countries is to ensure that they in partnership can invest in the latest ideas and technologies.