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China, Africa to strengthen industrial cooperation

Xinhua | Updated: 2015-07-01 09:28

ADDIS ABABA - Officials from China, Africa, and the World Bank (WB) on Tuesday pledged efforts to strengthen industrial cooperation between China and Africa to boost the continent's economic development at a two-day investment forum held in Addis Ababa, the capital of Ethiopia.

Chinese Deputy Minister of Finance Liu Jianhua said as Chinese businesses are investing abroad and African countries are attracting foreign capital, technology, and development experience, there is huge room for cooperation.

She said China is willing to help Africa build infrastructure network, achieve industrialization by scaling up financial, technological, and human resources support to Africa.

Liu also said China will increase its cooperation with multi- lateral institutions like the WB in its engagement with Africa. She revealed that China is planning to set up a $50-million trust fund with the WB to support infrastructure development in developing regions including Africa.

According to official statistics, China has been Africa's largest trading partner for six consecutive years, with trade in 2014 reaching $222 billion. Chinese invested a record high of $4 billion in Africa last year, up 14 percent from a year earlier. At least 2,500 big and medium Chinese companies have registered to be operating in Africa, across a broad variety of sectors.

A WB report shows that Chinese investment in Africa is increasingly shifting towards the manufacturing sector as the Asian nation diversifies out of primary sectors such as agriculture and mining. Manufacturing is key to Africa's future development, the report notes.

In his opening remarks, Prime Minister Hailemariam Desalegn of Ethiopia noted that his government sees the forum embodying three important themes, including Africa's commitment to economic transformation, strong partnership between Africa and China, and the power of industrialization to deliver development results.

The Premier said China-Africa partnership, which has mutually beneficial results across Africa, has expanded rapidly and taken new momentum.

"As China-Africa trade cooperation moves into its next phase, there will be significant scope for diversification of our economies and exports, particularly into agriculture and manufacturing," he said. "Chinese investment can be instrumental in addressing structural and logistical constraints that impact the competitiveness of African exports."

Makthar Diop, WB Vice President for Africa, highlighted China's experience of dedication, long-term planning, and pragmatism as three major lessons for Africa to learn in order to industrialize. He said Africa's economy has been growing averagely 5 percent over the past decade and proved itself resilient during the 2008-2009 global economic crisis. However, the negative impacts on the economy brought by recent months' drop of commodity prices signifies the need for Africa to diversify its economy, Diop said.

One of the key issues discussed at the forum was the role industrial parks and special economic zones play in the process of industrialization.

Since 2007, the Chinese government has been supporting six Chinese company-initiated industrial zones in Africa, located in Egypt, Zambia, Nigeria, Ethiopia, and Mauritius. Economists including WB former chief economist Justin Lin highlighted the success of this innovation especially the Eastern Industrial Park in Ethiopia for facilitating the relocation of China's labor- intensive light manufacturing.

He said Africa, with 1.1 billion population and low labor costs, is an ideal place to relocate the light manufacturing sector of China as the trend of global value chain moves. Lin urged the governments of China and African countries to seize this opportunity that can help both China and Africa move a step up the global value chain.

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