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Investment main driver for China-Africa cooperation

Updated: Aug 15,2016 9:03 AM     Xinhua

NAIROBI — Wang Shusheng, from Hebei province of Northern China, is occupied with his steel plant in Tanzania set to go into operation in October.

Wang is the manager of Kiluwa Steel Group Co. Ltd, which covers an area of 300 acres, located in a remote land in Kibaha District, eastern Tanzania.

The factory mainly produces screw-thread steel and wire rod, with a first-phase investment of about 200 million yuan (about $30 million).

In underdeveloped Africa, infrastructure construction is the guarantee for development and it requires rebar, cement and electric power, Wang said.

In Tanzania, the quality of local rebar cannot meet the requirement of building skyscrapers or bridges. As a result, 70 percent of rebar in the country are imported.

Wang is among an increasing number of Chinese entrepreneurs who are turning their eyes to Africa to seek business opportunities.

Partial statistics show that China and Africa have signed over 180 various cooperation agreements with a total value of $32.5 billion since the Johannesburg Summit of The Forum on China-Africa Cooperation last December. This includes $29.1 billion of commercial loans, accounting for nearly 90 percent of the total amount.

Investment-led cooperation is becoming a main driver for business cooperation, marking a new stage of higher quality of economic cooperation and trade between China and Africa, said Foreign Minister Wang Yi at the Plenary Session of the Coordinators’ Meeting On the Implementation of the Follow-up Actions of The Johannesburg Summit in July.

Shi Jiyang, CEO of China-Africa Development Fund (CAD Fund), noted that Africa is a new horizon of global economic growth, the most dynamic economy seconds only to East and South Asia. There is an enormous potential of China-Africa cooperation, particularly in terms of investment.

Shi said more and more Chinese enterprises will invest in Africa, along with the implementation of the Belt and Road Initiative and the Ten Cooperation Plans as put forward at the Johannesburg summit.

According to the statistics from the CAD Fund, trade between China and Africa reached $222 billion in 2014 and is projected to hit $400 billion by 2020; the stock of Chinese investment in Africa amounted to $32.4 billion in 2014 and is expected to reach $100 billion by 2020.

China has been a transformational partner from the standpoint of Africa’s development, Prof. Lemma Senbet, executive director of African Economic Research Consortium said on Aug 12 in Mombasa, Kenya.

Senbet said at the China-Africa Media & Think-Tanks Symposium that China has emerged as Africa’s largest trading partner, but China’s engagement with Africa is not just limited to minerals and oil.

“It is multifaceted and multilayered,” he said.

He also said it is important that China and Africa should foster relationship in other spheres apart from that fostered by government actors.

“China could provide some public-private partnership to interface the private sector in Africa and also use that as a pattern of investment. That would be win-win,” added Senbet.