Chinese investment buoys Africa's economy

XIAMEN - Although Africa is a diverse continent, containing a variety of countries and cultures, the representatives of African countries do have one thing in common: their desire to attract Chinese investment.

"We look forward to Chinese enterprises' investments.

Chinese investment helps us to fund the construction of transportation and medical infrastructure," Bernadette Artivor, executive director of the Namibia Investment Center, said Thursday.

Artivor made the remark at the High-Level Symposium for China-Africa Investment and Cooperation, an event held as part of the 15th China International Fair for Investment and Trade (CIFIT) which opened Wednesday in Southeast China's coastal city of Xiamen.

The symposium was held to foster partnerships between businesses and governments from both China and Africa, as well as promote investment opportunities and address challenges that may hinder Chinese investment.

WIN-WIN SITUATION

As a responsible investor, China has played a vital role in the development of the African economy, according to the symposium's African participants.

"China's investment not only helps with the growth of Africa's economy but also gives new impetus to its development.

Along with resource exploration in Africa, Chinese enterprises also help with local infrastructure construction and labor training," said Shen Danyang, a spokesman for China's Ministry of Commerce.

Official statistics show that China has built six overseas economic and trade cooperation zones in five African countries, including Zambia, Nigeria and Mauritius, Egypt and Ethiopia, with a total of 328 million US dollars spent to build infrastructure as of the end of 2010.

By the end of this year, 137 Chinese enterprises will have invested a total of $ 1.08 billion in the six zones. Business volume is predicted to reach $ 3.5 billion ; the companies will also contribute $ 119 million in tax revenues for local governments while creating about 10,000 jobs.

"We are willing to help African countries train workers, as this will allow us to create a win-win environment," Li Li, vice president of the China International Water and Electric Corp., said after the symposium.

"Capital influx and technological imports brought in by Chinese companies now serve as a strong foundation for the sustainable development of African countries," said Liu Yingjun, deputy director-general of the Department of Outward Investment and Economic Cooperation of the Ministry of Commerce.

"In this way, China's enterprises also get more opportunities to expand their overseas business and promote their sales in a broader market," Liu added.

LONG-TERM COOPERATION

"Investment activities are quite different from charity.

Long-term cooperation, the key to investment, is also the reason for China's success," said Kandeh K. Yumkella, director-general of the United Nations Industrial Development Organization (UNIDO).

To boost China-Africa investment, China will establish a bilateral cooperative mechanism that will extend financing channels and encourage Chinese enterprises to help African countries create more jobs, as well as bring about more export opportunities and increase tax revenues through investment in various sectors, Liu said at the symposium.

China began investing in Africa on a relatively small scale in the 1980s. By the 1990s, China had started to gradually expand its investments and extend investment projects to more areas around the continent.

Since 2000, China's investment in Africa has increased rapidly, becoming more diverse every year.

By the end of 2010, China had invested around $ 40 billion in more than 2,000 enterprises from 50 African countries and regions.

These companies cover a variety of sectors, including agriculture, mining, manufacturing and finance.

Direct investment by Chinese enterprises in Africa amounted to $ 2.1 billion in 2010, an increase of 46.8 percent over the previous year, according to the statistics from China's Ministry of Commerce.

China is now Africa's largest trade partner, while Africa is China's fourth-largest destination for overseas investment.

IMPROVING TIES

Some countries have expressed uneasiness toward China's increasingly close relations with Africa, as they feel that their interests on the continent may be threatened.

On June 11, US Secretary of State Hillary Clinton likened China's increased influence in Africa to "new colonialism" while appearing on a television program in Zambia.

Her remarks aimed to estrange relations between China and Africa and ensure that US interests in Africa will not be eroded, said He Wenping, director of the African Studies Office at the Chinese Academy of Social Sciences.

"I am fairly certain that trading with China is better than with Western countries, since China is now rising so quickly.

China knows how to develop an economy rapidly. Our relations are good," Meyo Akoulouze Maryse, an officer with the Cameroun Investment Promotion Agency, said before the symposium.

"China's investment in Africa plays an essential part in rebalancing the global economy," said Andrea Goldstein, head of Global Relations at the Investment Division of Organization for Economic Cooperation and Development (OECD).

Goldstein said that open dialogues and communication will help to ease other countries' anxieties about China's investment in Africa.