African development gets Chinese push

In Kigali, capital of Rwanda, NEIITC Co Ltd, a television manufacturer founded by Chinese businessman Liu Wenjun, is able to assemble over 2,000 units of 32-inch televisions daily. With a unit price of 600 yuan ($84), these televisions, once considered a luxury in Africa, are now being watched by a large number of families in Rwanda. The Chinese company today holds about 40 percent of market share in this area in the East African country.

After launching this project with a total investment of over $1 million two years ago, Liu said the market of Rwanda previously was dominated by Indian merchants, who imported TVs from China and enjoyed gross profit margins of up to 50 percent.

However, the company quickly drove down the TV prices while still maintaining a gross profit margin of over 20 percent, after it established a local factory using materials and equipment from China.

"Initially, entering larger markets requires substantial cash flow, and since my capital was limited, starting in a smaller market was a safer approach," said Liu

One key characteristic of the African market is that it is "large but thin. Africa is vast, but the capacity of individual markets is limited. The challenge for Chinese entrepreneurs lies in identifying growth markets, a task that demands sharp insight", said Wang Luo, director of the Institute of International Development Cooperation, which is part of the Chinese Academy of International Trade and Economic Cooperation in Beijing.

With more orders now in hand, NEIITC plans to use Rwanda as a hub to expand into neighboring countries. The company also intends to introduce other household appliances like refrigerators soon, further enriching the product lineup.

Besides household appliances, new cars command strong demand from African governments, businesses and residents. Chinese new energy vehicles as well as fossil fuel-powered cars, and solar power stations, have strong appeal in Africa, said Chen Bin, deputy director of the expert committee at the Beijing-based China Machinery Industry Federation.

For instance, Botswana Power Corp signed a power purchase agreement with Sinotswana Green Energy, a consortium of Chinese and Botswanan companies, in mid-August, to officially launch the southern African country's first 100-MW PV power project.

The deal was structured into an engineering, procurement and construction contract, with operations and maintenance of the Jwaneng 100-MW solar station covered for 25 years, within the country's plan that is expected to spur its renewable energy use to 50 percent by 2036.

Sinotswana Green Energy was jointly established by China Harbour Engineering Co, China International Water and Electric Corp and New Energy Company Proprietary Ltd, a local company. The project is expected to start power generation at the end of 2025.

Once completed, the project will significantly support the country's electricity needs, ensuring the power supply required for its economic growth, said Bai Yinzhan, board chairman of the Beijing-headquartered China Harbour Engineering Co.

This project aligns with Botswana's goals of providing affordable, reliable and sufficient energy supply for sustainable growth, while also enhancing access to efficient utilization of energy resources.

With many African countries entering a new era of green and innovation-led growth, China's new energy vehicles, lithium batteries and photovoltaic product exports to Africa increased by 291 percent, 109 percent and 57 percent year-on-year, respectively, in 2023, data from the General Administration of Customs showed.