Globally,cross-bordercapitalflowshavefallenby65percentsincethetimeofthecrisisasWesterneconomiesandtheirfinancialinstitutions,inparticular,havedivestedmorethan$2trillioninforeignassets,optingtoinvestlocallyinstead.ContrastingwiththistrendaretherapidlyincreasingcapitalflowsandtradevolumesbetweenAfricaandChina.CentraltothishasbeenmajorChinesefinancialinstitutions.
MuchoftheattentionaroundChina-Africaeconomicrelationsisfixedonthegrowingsumsofcapitalmovingbetweenthetwo,growthintradevolumes,andincreasingpresenceofAfricanbusinessinChinaandviceversa.ButfundamentaltothesuccessanddynamisminthisareaaremajorChinesefinancialinstitutions.Thiswarrantspayinggreaterattentiontotheseentitiesanddetermininghowtobestfructifythedevelopmentpotentialtheyprovide.
WiththeForumonChinaAfri顱顱caCooperationSummitcominguplaterthisyearinBeijing,therewillbemuchreflectiononhowwellthenationsinvolvedharnessedthetoolsthisframeworkhasplacedattheirdisposal.Themostwell-knownamongthesewasthe$60billionChinesepledgefordevelopmentprojectsinAfrica,whosedistributionwouldbefundamentallyfacilitatedbythelikesofChinesefinancialinstitutionssuchasChinaDevelopmentBankandtheChinaExport-ImportBank.WhilstAfricanfinancialinstitutionshavelongsupportedgrowingcommercialactivitiesonthecontinent,theyhavebeenunabletosatisfytheappetiteforcreditandinvestmentamongAfricannationsandtheircompanies.NotonlyhaveChineseinstitutionsenteredthefraytocontributetofillingthisgap,aswellasthatleftbyrecedingcapitalflowsfromEuropeandtheUnitedStates,buttheyhavealteredthemodalitiesoflendingandinvestmenttosuitAfricanneeds.
AlthoughinvestmentinAfricaoffersgreatopportunities,itisstillassociatedwithrelativelyhighlevelofrisks.Whilstcapitalflowshavebeenincreasing,itisworthnotingthatthebulkofChineseengagementinAfricaisstillweightedtowardloansandlesstowardinvestment.AsbilateralandmultilateralagreementsbetweenChinaandAfricacontinuetomultiply,thereshouldbeafocus,particularlyamongAfricaneconomicplayers,onwhatmeasurestotakeinoptimizingtheformsofcooperation.ForAfricangovernments,theyshouldtakestepstopositiontheireconomiesasattractiveplacesfortheavailablecapitaltoland.Developingstrongriskassessmentandprojectmanagementcapacityinternallyareprimeexamplesofhowtodothis.ChinaGDPGrowth,%,Q12015鈥換42017
ChinaCPI&PPI,February2017鈥揊ebruary2018
China鈥檚OfficialPMIFebruary2015鈥揊ebruary2018
China鈥檚MonthlyRetailSales,$tln,%y-o-y,March2015-December2017
China鈥檚MonthlyImports,$bln,%y-o-y,February2015-February2018
China鈥檚MonthlyExports,$bln,%y-o-y,February2015-February2018
1/EgyptMarch2018:TheNortheasternCairoGovernorateoversawtheopeningofthefirstEgyptian-Chinesefiberopticcablefactory.The33,000-square-meterstate-of-the-artplantpositionsthetwocountriestobeabletotakeadvantageofthe$9-billiongrowthpredictedtotakeplaceinthefiberopticmarketby2023.
2/UgandaFebruary2018:TheChinesefirm,XinlanGroup,asubsidiaryofAmoiGroup,ispoisedtofinisha$10-milliondealtobuildasmartphonemanufacturingplantinUganda.Thedealisexpectedtocreate5,000Ugandanjobs,andwilluselocalminerals,suchascoltan,inthemanufacturingprocess.
3/KenyaJanuary2018:AnagreementbetweenKenyaRailwaysandCargocareInternationalLtd.onbehalfoftheKenya-ChineseChamberofCommercewassignedtopromoteefficientandcheapercargotransportationofgoodsbetweenChinaandKenya.
4/SouthAfricaFebruary2018:OneofChina鈥檚largeststate-ownedenterprises,Sinopec,issetoinvestover$500millioninChevronSouthAfricafollowinganagreementwiththeSouthAfricanGovernment.Thiswillcontributetotheupgradingofthefirm鈥檚CapeTown-basedoilrefinery.
5/NamibiaFebruary2018:Namibiancommercialbank,BankWindhoek,introducedtradingoftheChinesecurrency,renminbi,countrywideinanattempttopromotebusinesstransactionswiththeChinesecommunity.