China, Africa to keep deepening industrial chain cooperation

Estimated reading time: 5 minutes

By Wan Yu, People's Daily

By analyzing over 90 Chinese companies and 20 China-Africa cooperation projects, the report explores the impact of the China-Africa policy framework and existing cooperation models on the African industrial chain.

It particularly emphasizes the role of Chinese enterprises in the development and transformation of the African industrial chain, and highlights the future potential of China-Africa industrial chain cooperation.

The report showcases a wide range of examples to demonstrate the contributions made by Chinese companies to the transformation and development of Africa's industrial chain in various sectors such as agriculture, manufacturing, digital economy, pharmaceuticals, logistics, and infrastructure. These examples include a hybrid rice demonstration project in Madagascar, a fiberglass production line set up by Chinese company Jushi in Egypt, the cross-border e-commerce platform Kilimall in Central Africa, the Nairobi-Malaba railway in Kenya, and the 150 MW Noor III Concentrated Solar Power project in Morocco.

Wu Peng, director-general of the Department of African Affairs of China's Foreign Ministry, noted that China is leveraging the Belt and Road Initiative (BRI) and the Forum on China-Africa Cooperation (FOCAC) to strengthen its alignment with the African Union's Agenda 2063 and the development strategies of African countries.

According to him, the focus is on promoting African industrialization through investment cooperation, enhancing the value-added of African resources, and expanding the share of African manufacturing in the global supply chain.

"The investment and economic cooperation between Africa and China is continuously expanding, with steady growth in bilateral trade volume and a gradual increase in the value-added of African products. This is highly encouraging," said Arkebe Oqubay, former special adviser to the Prime Minister of Ethiopia.

He emphasized that China attaches great importance to strengthening clean energy cooperation with Africa and has become one of the main partners of Africa in clean energy development.

Sharing the green and low-carbon practices in industrial parks in Hawassa and other parts of Ethiopia, Oqubay stated that with strong support from Chinese investment, Ethiopia is gradually enhancing its green infrastructure development, and the Ethiopian government actively supports Chinese companies' investment and projects in the country.

As of the end of 2022, China's direct investment stock in Africa had exceeded $47 billion, with over 3,000 Chinese companies investing and operating in Africa. In the first half of this year, China's direct investment in Africa exceeded $1.82 billion, a year-on-year increase of 4.4 percent. Chinese companies' confidence in the African market continues to strengthen, and they are keeping expanding the areas of investment in Africa.

Wang Dong, deputy director-general of the Department of West Asia and Africa Affairs of China's Ministry of Commerce, noted that Chinese companies' investment in Africa has expanded from traditional sectors such as construction, mining, manufacturing, wholesale, retail, and agriculture to new sectors including trade logistics, digital economy, clean energy, healthcare, green development, and finance, and Chinese companies have also invested in industrial parks and economic cooperation zones in many African countries.

The effects of agglomeration continue to emerge, promoting industrialization and agricultural modernization in Africa, Wang added.

The report highlights that China-Africa industrial chain cooperation has facilitated the transformation and development of African industrial chains through six major models: industrial alignment and capacity cooperation, investment in industrial parks, infrastructure development and strengthening of industrial foundations, technology transfer and talent development, demand stimulation and supply promotion, as well as institutional innovation and practical exploration.

Deputy executive secretary and chief economist at the United Nations Economic Commission for Africa Hanan Morsy said both the Chinese and African markets hold immense potential, and the close cooperation between the two sides in the field of trade and economy is fueling the intrinsic growth of Africa.

"The investment by Chinese companies is a focal point of interest for many African countries," said Ibrahima Sory Sylla, Ambassador of Senegal to China, adding that as African industrialization continues to progress, Chinese investment in the industrial chain is driving the continent's industrial transformation.

"The FOCAC continues to play a crucial role in promoting investment in Africa, and African countries are looking forward to more investment from Chinese companies," he noted.

Over the past 10 years since the BRI was proposed, the initiative has received active support and enthusiastic participation from African countries. Africa has become one of the most important partners of China for Belt and Road cooperation, and almost all countries on the continent have joined the BRI. The connectivity cooperation between China and Africa has accelerated, driving the development of the entire industrial chain.

According to Jeffrey Sachs, director of the Center for Sustainable Development at Columbia University, the positive development of China-Africa economic and trade relations is mutually beneficial for both parties and crucial for the global economy as a whole. The BRI, along with China-Africa economic and trade cooperation and the African Continental Free Trade Area, complement each other and create a favorable trade environment. This will bring about more market opportunities, help address poverty and other issues faced by Africa, and promote the process of African integration.