Borninthebeginningofthenewcentury,theForumonChina-AfricaCooperation(FOCAC)isanimportantplatformofdialoguebetweenthetwosidesundertheframeworkofSouth-Southcooperation.Inthepast18years,theforum,asaboosterdrivinguprapidandsustainableChina-Africacooperation,hasbeenprovidinglong-lastingandenergeticimpetustothehealthydevelopmentofbilateralrelations.TheeightmeasuresreleasedattheFOCACBeijingSummitin2006,andthe10majorcooperationplansannouncedattheFOCACJohannesburgSummitin2015,haveparticularlyacceleratedeconomicandtradedevelopmentbetweenChinaandAfrica.Inthiscontext,ChineseprivateenterpriseownersshouldbewellawareofthegrowingimportanceandongoingtrendofChina-Africarelations,sothattheycanparticipateinChina-Africacooperationinvariousfieldsinamoreactiveway.
Biggerrolesforprivatecompanies
Enteringthe21stcentury,Africancountrieshavebeenpromotingindustrialization.Duringtheprocess,theyincreasinglyregardindustrialparksasanimportantmodeltoattractforeigninvestmentandboostindustrialization.AstheeconomicandtradetiesbetweenChinaandAfricadeepened,themainparticipantsinthefieldofeconomiccooperationhavechanged,withmoreandmoreChineseprivatecompaniescomingtotheforewithaflexibleandpragmaticapproach.
Accordingtothe2016StatisticalBulletinofChina鈥檚OutwardForeignDirectInvestmentreleasedinOctober2017bytheMinistryofCommerce,NationalBureauofStatisticsandStateAdministrationofForeignExchange,Chinahad3,254enterpriseswithinvestmentinAfrica.Butthereport,DanceoftheLionsandDragons,releasedbyMckinsey&Co.inJune2017,suggeststhatthereweremorethan10,000Chinese-ownedfirmsoperatinginAfrica.ThebiggapbetweenthetwofiguresmostlyliesinthefactthatmanyChineseprivateenterprisesdidnotregisterwithlocalcommerceauthoritiesbeforelaunchingtheirprojectsinAfrica.
TheMcKinseyreportnotesthataround90percentoftheChinesecompaniesareprivatelyowned.Thesecompaniesofvaryingsizesandmultiplebusinessesaremostlyprofitable.Ontheonehand,Chineseprivatecompaniesindifferentsectorshaveformedacompleteindustrialsystem,andtheirinvestmentinAfricaconstitutesapartoftheglobalindustrialchain;ontheotherhand,Africahasformedasizeableconsumermarketwithacontinentof30.29-millionsquarekmand1.2billionintotalpopulation.Inaddition,AfricancountriesarewillingandhavetheconditionstoconductindustrialcapacitycooperationwithChina.
ChineseindustrialparksinAfrica,mainlyparticipatedinbyChineseprivatecompanies,havebeengrowingrapidly.Statisticsshowthatthereareabout100cooperationzonesandindustrialparkssetupwithChineseinvestmentinAfrica.Morethan20industrialparkswithsizeableinvestmenthaveabsorbednearly400enterpriseswithcombinedinvestmentofabout$5billionandgrossoutputvalueof$13billion.TheEasternIndustryZoneinEthiopia,China-EgyptSuezEconomicandTradeCooperationZoneandLekkiFreeZoneinNigeriaeachhasattractedmorethan50enterprises,andthesebigthreeareplayingimportantrolesinlocaleconomicdevelopmentandindustrializationandwillbetheimportantcarrierofbilateralindustrialcapacitycooperationinthefuture.ThecooperationmodelbasedonindustrialparksisalsoinlinewiththestrategicgoalsofChina鈥檚BeltandRoadInitiativeandAfricanUnion(AU)Agenda2063andcanbeimmenselybeneficialtoChinaandAfricancountries.
Rightconcepts
Gooddevelopmentconceptsusuallyleadtogooddevelopmentorientationsandresults.Inrecentyears,privateChineseenterprisesdevelopstablyinAfricancountries,mainlybecauseoftheirrightdevelopmentconcepts.
First,theconceptofprotracteddevelopment.AfterFOCACwasestablishedin2000,moreandmoreChineseentrepreneurswithinvestmentinAfricachangedtheirdevelopmentconceptofshort-termandone-offinvestmentandcooperation.Theyhopetohavestableandlong-lastingdevelopmentandcooperationinAfricaforlong-termreturns.
AccordingtoYinYiqiao,headofHubeiChamberofCommerceinAfrica,toachievesuccessinAfrica,companiesshouldfocusonlong-termreturns,insteadofseekingonlyshort-terminterests.InMarch1997,Yin,thenateacheratWuhanUniversityofTechnologyofHubeiProvince,visitedMadagascaronbusinessandfoundampleopportunitiesintheislandnation.HedecidedtostaythereandestablishedhisFutureDevelopmentCorp.Ltd.withafriend,mainlyengaginginmanufacturingaluminumalloydoorsandwindows,andtradeinconstructionmaterial.Hestartedoutwithasmalloperationandlimitedstaffcomplement,relyingonthelowmaterialpricesinChinaandtheuseofadvancedtechnology,managementskillsandalocalizationstrategy.ThecompanyquicklygrewintothelargestenterpriseinaluminumalloydoorandwindowprocessinginMadagascar.Currently,ithasexpandedtoseveralotherAfricancountriesincludingKenya,Uganda,RepublicoftheCongoandMozambique.Yin鈥檚experienceshowsthathavingalong-termstrategycanhelpmakeaChineseprivatecompanysuccessfulinAfrica.YinsaidthathewillcopythedevelopmentmodeofhisFutureDevelopmentCorp.intomoreAfricancountries,sothathecanprovidethebestproductsandbestservicesonthecontinent.
Second,theconceptofcluster-basedoperation.AstheAfricanproverbgoes,youcangofasteralonebutfarthertogetherwithothers.ToinvestinAfrica,Chineseprivatecompaniesneedtogotogether.ItcanhelpChineseprivateenterprisesrunbetterwhentheyoperateinChineseindustrialparksinAfrica.
Industrialparkscanprovidebetterindustrialprospects.EachChineseindustrialparkinAfricawasestablishedbasedonin-depthmarketinvestigationandresearch.Theseparksweredesignedtomeetthemarketdemandsanddevelopmentstrategiesofthecorrespondingcountries.Thiscanhelpinvestorsmakethecorrectdecision.Inaddition,theseindustrialparksoftenenjoypreferentialinvestmentpoliciesgrantedbythehostcountries,astheycanhelpthemachieveindustrialization,providejobsforlocalpeopleandincreasegovernmenttaxrevenue.
Moreimportantly,industrialparkshavecompleteindustrialsupportivefacilities,whichcanhelpcompaniescontrolcostsandraiseefficiency.Industrialparkscanalsoprovideeasyinvestmentprocedures.FormostChineseprivatecompanyowners,theyarenotquitefamiliarwithoverseasmarketsnordotheyhaveenoughinternationalinvestmentexperience.Moreover,itusuallytakesalongtimetogothroughlocalinvestmentprocedures.Inthisregard,theycangethelpfromtheindustrialparksinAfrica.Theseparkscanalsoprovideonestopservicesforinvestors,capableofhelpingthemsolveeconomicandtradecooperationdisputesandseekconsularprotection.
Third,theconceptoflocalization.Localizationisanimportantcriterionmeasuringwhetheracompanyhasalong-termstrategyinthecountryitinvestsin,aswellasanimportantfactorevaluatingacompany鈥檚contributiontolocalsociety.InsomeAfricancountries,localizationisalegalrequirementforforeigninvestment.Forinstance,ZimbabwepassedtheIndigenizationandEconomicEmpowermentActin2007toeliminatetheinfluenceofcolonialism,protectnationalresourcesandsafeguardeconomicsovereignty.Hence,moreandmoreChinesecompanieshavechangedtheirmindsofseekingonlyshort-terminterests;instead,theyembracelocalizationstrategiestodevelopmutually-beneficialandwin-wincooperation.
WhileinvestinginAfrica,mostChineseenterprisesareattachinggreatimportancetoreapingbotheconomicandsocialbenefits.Forinstance,ChineseshoemakerHuajianGroupinEthiopiahasgiventopprioritytoitslocalizationpolicy.Ofthemorethan6,000companyemployees,Chinesestaffnumberonly160.Everyyearitsends50AfricanemployeestoHuajianheadquartersinDongguanofsouthChina鈥檚GuangdongProvinceforasix-monthtrainingprogram.Andaccordingtothegroup鈥檚plan,theHuajianInternationalLightIndustryParkwill,uponitscompletionin2020,producemorethan60percentoftheshoes,garmentsandbagsmadeinEthiopia,andoffer30,00050,000jobopportunities.
TheinvestmentofprivateChinesecompaniesinAfricaisdrivingagriculturalmodernizationISTOCKChinesecompanies鈥檌nvestmentshouldalsobeguidedbythegoalsoftheFOCACBeijingSummit;theyshouldstrengtheninfrastructurecooperationbasedontheBeltandRoadInitiative,vigorouslypromoteindustrialcapacitycooperationinvarioussectors,andpushforwardindustrializationandagriculturalmodernizationinAfrica.
Newpoliciesexpected
TheforthcomingFOCACBeijingSummitwillpresentnewopportunitiesforChina-Africacooperation.AccordingtoDaiBing,SecretaryGeneraloftheFOCACChineseFollow-upCommitteeandDirectorGeneraloftheDepartmentofAfricanAffairsoftheMinistryofForeignAffairs,promotingChina-Africaeconomicandtradetransformationandupgradingisoneofthefivegoalsofthesummit.HealsonotedthatChina-Africacooperationistransformingfrombeingguidedbythegovernmentstobeingorientedbythemarket,upgradingfromcommoditytradetoindustrialcapacitycooperation,andmovingfromengineeringcontractingtoprojectinvestmentandoperation.
AsamemberofanorganizationactivelypromotingChineseprivateenterprises鈥檖articipationinChina-Africacooperation,Ihavehighexpectationsofthesummit.
TheChineseandAfricanleadersshouldmakemorepioneeringeffortindesigningfurtherpragmaticmeasuresforChina-Africacooperation.Chinashouldadoptmorepoliciessuchaspromotingrenminbi(Chinesecurrency)settlementinChina-Africatradetoeffectivelysupportcooperationbetweenmedium,smallandmicro-sizedChineseenterprisesandtheirAfricancounterparts.Ontheotherhand,Africancountriescanalsocontinuetheir鈥淟ookEast鈥漰olicy,withaviewtodrawingChinesecapitalandtechnologieswithamoretransparent,favorableandcleaninvestmentenvironment.
China-AfricacooperationshouldbeinlinewiththeAUAgenda2063,the10majorChina-Africacooperationplansandtheconstructionofcontinentalhigh-speedrailway,highwayandaviationnetworksandindustrialization,andconstantlyimprovethequalityofChinesecommodityexportstoAfrica.Chinesecompanies鈥檌nvestmentshouldalsobeguidedbythegoalsoftheFOCACBeijingSummit;theyshouldstrengtheninfrastructurecooperationbasedontheBeltandRoadInitiative,vigorouslypromoteindustrialcapacitycooperationinvarioussectors,andpushforwardindustrializationandagriculturalmodernizationinAfrica.
CaiLihuaandJuliaoDmande,headofMozambiqueChamberofCommerce,celebratethesigningofacooperativeagreementinHangzhouinAprilCOURTESYPHOTOAstheeconomicandtradetiesbetweenChinaandAfricadeepened,themainparticipantsinthefieldofeconomiccooperationhavechanged,withmoreandmoreChineseprivatecompaniescomingtotheforewithaflexibleandpragmaticapproach.
**TheauthorisdeputysecretarygeneralofChinaAfricaJointChamberofCommerceandIndustry**Commentsto