China's private enterprises play an important role in the rapid
development of Sino-African trade. A series of favorable measures
announced at the Beijing Summit last weekend will maximize their
efforts and inject new vigor into China-Africa cooperation.
At the High-level Dialogue and Second Conference of Chinese and
African Entrepreneurs last Saturday in Beijing, Premier Wen Jiabao proposed raising Sino-African trade
volume to US$100 billion by 2010.
?
At the same time, the Chinese government will further open up the
Chinese market to Africa and encourage capable and credible Chinese
enterprises to invest there, and to transfer applicable
technologies and expertise to their African counterparts.
According to Zhao Jinping, vice director of Foreign Economic
Relations Department with the Development Research Center of the
State Council, the various favorable measures announced during the
Forum on China-Africa Cooperation (FOCAC) from November 3 to 5 will
bring unprecedented opportunities to Chinese enterprises,
particularly those in the private sector that are planning to enter
overseas markets.
A major topic of discussion at the conference was the new
policies and measures aimed at enhancing Sino-African trade and
investment.
Some of these include the US$3 billion in preferential loans and
US$2 billion in export credits that China will provide over the
next three years, and the establishment of a special US$5 billion
fund to encourage Chinese investment in Africa. Moreover, Chinese
enterprises will also receive support and incentives to encourage
them to establish economic cooperation and trade zones in some
African countries.
Analysts observe that these favorable measures represent a new
investment channel for the US$800 billion yuan (US$101.7 billion)
available domestic private capital. Further, overseas economic
cooperation and trade zones will improve the local investment
environment and reduce risks.
Several far-sighted Chinese entrepreneurs have already started
the ball rolling on moving into Africa. According to Suo Zhanrong,
board chairman of the Huifeng Group in Inner Mongolia, his company plans to increase
the export of raw and processed materials of traditional Chinese
medicine to Africa, expanding the current business generic
healthcare products portfolio to include products for
cardiovascular disease and HIV prevention.
The Guoji Group, based in Henan Province, recently established an
economic cooperation and trade zone in Sierra Leone, which has
attracted the participation of nearly 20 domestic small and
medium-sized enterprises (SMEs). These companies deal in a range of
products including construction materials, daily necessities and
batteries.
Wang Jianping, board chairman of Hazan Shoes Company, said that
his company would increase its investment in Nigeria from US$2
million to US$6 million. Since it set up its shoe manufacturing
plant there three years ago, Hazan has trained more than a hundred
local employees in technology application, management and
sales.
Private Chinese enterprises are becoming an increasingly
important force in African industry and commerce. Huawei
Technologies, the largest CDMA provider in Sub-Saharan Africa,
reported sales of more than US$1 billion. It also pays US$40
million a year in taxes in Africa.
Jiangsu-based Chunlan Group exports about
100,000 air-conditioners, washing machines and electric bicycles to
the African market annually, while Holley Share Holding Group from
Zhejiang Province supplies the medication
Arteannuin to some 300 million African malaria patients yearly.
According to statistics from the Export and Import Bank of
China, other than about 100 state-owned enterprises, the majority
of the more than 800 Chinese enterprises with investments in Africa
are SMEs.
At the first all-member meeting of the China-Africa Business
Council (CABC) last month, Vice Minister of Commerce Wei Jianguo
said: "The Ministry of Commerce is now working with the National
Development and Reform Commission, the Ministry of Finance, the
China Development Bank, the Export and Import Bank of China and
insurance companies to design supportive policies and measures to
facilitate bilateral cooperation."
A World Bank report shows that the African economy has witnessed
an average 4.3 percent growth in annual GDP over five consecutive
years. This is the best investment environment Africa has had since
the 1970s.
According to official Chinese statistics, bilateral trade
between China and Africa totaled US$40 billion in 2005. China
invested US$6.3 billion in Africa that year.
Further, China has signed investment protection agreements with
28 African countries and double taxation agreements with eight
African countries. Contracted projects with African countries
concerning construction, petroleum and chemicals, electricity,
transportation and telecommunications.
This is only the beginning, Wang Licheng, vice president of the
CABC, said. To maintain an orderly competitive market and achieve
win-win results, more support and help is needed from the CABC, the
newly established China-Africa Joint Chamber of Commerce, and other
investment organizations, Wang added.
The CABC was established in 2005 to create a service network and
communication platform for Chinese and African businesses.
The China-Africa Joint Chamber of Commerce was set up on
November 5, 2006. Jointly established by China Council for the
Promotion of International Trade, and the Union of African Chambers
of Commerce, Industry, Agriculture, and Professions, it is aimed at
developing cooperation between the business circles of China and
Africa.
(www.xinhuanet.com, translated by Li Shen for China.org.cn,
November 9, 2006)
?
