Investing in Africa
Africa has an important impact on China's global strategy. Africa has important geopolitical significance, vast untapped markets and abundant natural resources. As more and more Chinese companies hope to develop new markets and obtain more resources, China's business and investment activities in Africa are also increasing.
Historical exchanges
China and Africa have always had close relations. The development of China and Africa can be divided into three stages:
Politically active stage (1950s to the end of 1970s)
Mainly based on political needs China provides assistance to Africa in the fields of infrastructure and medical care China is committed to gaining the support of the third world
Dormancy stage (late 1970s to late 1990s
China's focus has shifted to the market economy, while seeking to establish relations with the world's major economies Efforts to reduce political influence in Africa
Economic active stage (from the end of the 1990s to the present)
With the rise of China's economy, China's demand for resources has increased rapidly In 2006, the China Africa Cooperation forum attracted the eyes of the Chinese business community to Africa China's investment in Africa is growing day by day and involves more fields
In the nearly half century before the 1990s, the relationship between China and Africa mainly focused on the political level rather than the economic level. Nearly two decades after 1978, the relationship between China and Africa was at a low ebb. Since the end of the 1990s, China's economy has started to develop at a high speed. In order to maintain rapid economic growth, China's demand for various resources has also been increasing, which has pushed the relationship between China and Africa into an active stage of economic activities. Although China's strategic partnership with Africa is based on a broader basis than economic interests, the Chinese government has always treated economy and politics separately. China's special political attitude and strategy towards Africa, as well as its economic assistance to Africa in the past, have enabled China to establish close relations with many African countries and created good conditions for China to invest in Africa. Therefore, China's investment in Africa has increased rapidly in recent years. In 2003, China's investment in Africa was US $74.8 million, which increased to US $1.574 billion in 2007.
Politically active stage (1950s to the end of 1970s)
Mainly based on political needs China provides assistance to Africa in the fields of infrastructure and medical care China is committed to gaining the support of the third world
Dormancy stage (late 1970s to late 1990s
China's focus has shifted to the market economy, while seeking to establish relations with the world's major economies Efforts to reduce political influence in Africa
Economic active stage (from the end of the 1990s to the present)
With the rise of China's economy, China's demand for resources has increased rapidly In 2006, the China Africa Cooperation forum attracted the eyes of the Chinese business community to Africa China's investment in Africa is growing day by day and involves more fields
In the nearly half century before the 1990s, the relationship between China and Africa mainly focused on the political level rather than the economic level. Nearly two decades after 1978, the relationship between China and Africa was at a low ebb. Since the end of the 1990s, China's economy has started to develop at a high speed. In order to maintain rapid economic growth, China's demand for various resources has also been increasing, which has pushed the relationship between China and Africa into an active stage of economic activities. Although China's strategic partnership with Africa is based on a broader basis than economic interests, the Chinese government has always treated economy and politics separately. China's special political attitude and strategy towards Africa, as well as its economic assistance to Africa in the past, have enabled China to establish close relations with many African countries and created good conditions for China to invest in Africa. Therefore, China's investment in Africa has increased rapidly in recent years. In 2003, China's investment in Africa was US $74.8 million, which increased to US $1.574 billion in 2007.
Main Features
The investment characteristics of Chinese companies can be seen from their activities in Africa. Most of China's investments in Africa tend to invest in resources. For example, China's investments in Nigeria and Sudan are in the oil industry, and China's investments in the Democratic Republic of the Congo and Zambia are in copper mining. However, in recent years, it can be clearly seen that China's investment in Africa shows a diversification trend. For example, in October 2007, industrial and Commercial Bank of China acquired 20% of Standard Bank of South Africa with us $5.6 billion.
Over the years, Chinese investors have learned a lot from their exchanges with Africa. Many Chinese companies recognize that in the face of various investment opportunities and objectives, in-depth research and due diligence are the key to successful investment.
One of the strategies China has always adopted in Africa is to exchange infrastructure construction for resources. For example, in September 2007, China and the Democratic Republic of the Congo signed an agreement to provide the Democratic Republic of the Congo with us $5 billion for infrastructure construction and mining development. In exchange, China obtained corresponding rights to the rich natural resources of the Democratic Republic of the Congo.
Support for investment in Africa
The Chinese government and some state-owned enterprises have actively encouraged and supported China's investment activities in Africa in the following five aspects:
Senior Chinese government officials visit Africa to provide preferential policies and measures
Economic assistance to Africa
Financial support for investment in Africa
Cultural impact on Africa
The top leaders of the Chinese government have always maintained close ties with Africa, which has laid a good foundation for Chinese enterprises to invest in Africa; The Chinese government has formulated a series of policies to encourage Chinese enterprises to invest in African countries; And cancelled the debts of 33 African countries to China as a gesture of friendship; In addition, the Chinese government has implemented zero tariff on hundreds of export commodities from some African least developed countries to China to promote the economic and trade development between China and Africa. At the same time, in order to encourage China's investment in Africa, the Chinese government has also established the China Africa Development Fund as financial support. For Chinese companies, going global is a brand-new task. In the field where international standards and processes are required, Chinese companies still face many problems, such as communication with foreign parties, lack of experienced management personnel, and commercial system standards.
Senior Chinese government officials visit Africa to provide preferential policies and measures
Economic assistance to Africa
Financial support for investment in Africa
Cultural impact on Africa
The top leaders of the Chinese government have always maintained close ties with Africa, which has laid a good foundation for Chinese enterprises to invest in Africa; The Chinese government has formulated a series of policies to encourage Chinese enterprises to invest in African countries; And cancelled the debts of 33 African countries to China as a gesture of friendship; In addition, the Chinese government has implemented zero tariff on hundreds of export commodities from some African least developed countries to China to promote the economic and trade development between China and Africa. At the same time, in order to encourage China's investment in Africa, the Chinese government has also established the China Africa Development Fund as financial support. For Chinese companies, going global is a brand-new task. In the field where international standards and processes are required, Chinese companies still face many problems, such as communication with foreign parties, lack of experienced management personnel, and commercial system standards.
Future outlook
China and Africa will continue to work together to face the difficulties brought by the deepening global economic crisis. China and Africa will strengthen cooperation in the following six areas:
Consolidate unity and cooperation to jointly face the global economic crisis
Deepen mutual trust and enhance traditional political friendship
Carry out mutually beneficial economic cooperation and trade at a higher level
Carry out non-governmental exchanges and strengthen cultural cooperation
Establish close working relations and enhance cooperation in international affairs
Work together to promote the development of the China Africa Cooperation Forum
Consolidate unity and cooperation to jointly face the global economic crisis
Deepen mutual trust and enhance traditional political friendship
Carry out mutually beneficial economic cooperation and trade at a higher level
Carry out non-governmental exchanges and strengthen cultural cooperation
Establish close working relations and enhance cooperation in international affairs
Work together to promote the development of the China Africa Cooperation Forum
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