What do locals think of China’s funding to promote development in Africa?

The third Africa Investment Forum was recently held in Dakar, the capital of Senegal. More than 400 government officials, entrepreneurs, representatives of financial institutions, experts and scholars from China and Africa discussed topics such as energy, agriculture and agricultural industrialization, information technology, education, finance, governance and sustainable development. During the forum, China and Africa signed multiple memorandums of understanding involving energy, agriculture, education and other projects.

In recent years, China-Africa economic and trade cooperation has become increasingly close. Participants believed that many Chinese companies investing and operating in Africa have brought scarce capital, technology, and jobs to this "continent of hope" and become an important booster for Africa's economic development.

The previous two Investment Forums on Africa were held in Addis Ababa, the capital of Ethiopia, and Guangzhou, China. This year’s conference came to Dakar, the pearl on the west coast of the African continent. The conference was co-sponsored by the Senegalese government, China's Ministry of Finance, China Development Bank, and the World Bank Group. It aimed to share China's development experience and accelerate investment in Africa.

“Africa’s time is now.” Senegalese President Sall said when attending the forum that the African continent is eager to rise. On the road to revitalization, Africa should change some of its past policies in public affairs. Concepts and practices can no longer stick to the past. He said that Africa needs to invest in infrastructure and security, create an investment environment conducive to the private sector, ensure investment safety and profitability, and thus attract more investors.

Ivory Coast Vice President Dunkan said that Africa has abundant resources and 60% of the world's undeveloped arable land, and 40% of Africa's population is under the age of 15. With the right education, this young population can be a valuable asset.

Local analysts believe that Africa has a high return on investment and is the most attractive continent for investors. The UK recently reported that total investment in Africa increased by 40% in 2016. External investors' interest in Africa has gradually diversified and begun to target opportunities in Africa's rapid urbanization process.

“Innovation” has become the keyword of this forum. The forum focused on a new round of investment opportunities driven by innovation, believing that this is crucial to unlocking Africa's development potential and accelerating inclusive growth. A relevant report from the World Bank stated that in an environment where the world economy is facing increasing uncertainties and economic growth is increasingly driven by technology, China and Africa need to strengthen ties, promote innovation, and help the African continent achieve leapfrog development. To this end, the World Bank and the China Development Bank released the report "Innovation Promotes Leap-Leap Development" to explore opportunities to expand the scale of innovation in various economic sectors in Africa.

Yang Shaolin, Executive Vice President and Chief Administrative Officer of the World Bank Group, said African leaders recognize the power of embracing new disruptive technologies. The Investment Forum in Africa is an important multilateral platform that helps strengthen cooperation and ignite the fire of innovation on the African continent.

“One Belt, One Road” has become one of the focuses of the forum. Many African participants said that the Belt and Road Initiative is a development opportunity for Africa. The completion and opening of the Addis Ababa-Djibouti Railway and the Mombasa-Nairobi Railway have made China's railways the brightest business card in Africa, and also made Africa full of expectations for the future of China-Africa railway cooperation.

“Africa’s real development needs railways.” When President Sall said this at the meeting, the African participants present gave him warm applause. Sall said that African countries need to build railway networks to achieve interconnection, otherwise intra-African trade will be difficult to develop. "We need to build railways in Africa. Africa needs infrastructure such as telecommunications, bridges, ports, airports, and power plants."

Africa is eager for more investment to add new impetus to the accelerating economic train. In the past 10 years, Africa's economy has grown rapidly, which is not unrelated to the increasing investment from China. It was reported not long ago that China has become the largest source of foreign direct investment in Africa.

Wang Yongsheng, Vice President of China Development Bank, said at the meeting that as of the end of June this year, China Development Bank had provided investment and financing of more than US$50 billion to 43 African countries, with a loan balance of US$36.8 billion, focusing on supporting agriculture. , manufacturing, infrastructure, social and people's livelihood and other fields.

Bamako, the capital of Mali, has a modern pharmaceutical factory invested and built by a Chinese company. Li Wensheng, general manager of Renfumari Pharmaceutical Company, who attended the forum, said that the company invested US$35 million to build a pharmaceutical factory with the highest technical standards in West Africa and produces basic medical drugs locally. This pharmaceutical factory not only ended Mali's history of having no pharmaceutical capabilities, but also created more than 200 local jobs. At the same time, the pharmaceutical factory has brought modern management concepts and talent training systems to the local area. "Local employees are proud to work for Chinese companies, and the local government often asks if more manufacturing companies can be introduced to Mali." Li Wensheng said that in the future, an industrial chain of raw material production will be formed around the factory, thereby driving Local industrial development.

Li Wensheng said that African countries know that their development is inseparable from investment and very welcome investment from China. African countries not only hope to attract more investment in manufacturing to drive employment and improve technological levels, but also look forward to investment in education, finance, health and other fields. Chinese companies' investment in Africa is becoming increasingly diversified. Chinese companies participating in this forum come from many fields such as infrastructure, manufacturing, finance, communications, and medicine.

In addition to traditional fields, Chinese companies have also entered the African e-commerce market. Chinese mobile phone manufacturers have even customized smartphones for African consumers, which highlight beauty and music functions and are deeply loved by local consumers.

Data from China’s Ministry of Commerce show that in 2016, China’s non-financial direct investment flows in Africa reached US$3.3 billion, a year-on-year increase of 14%, covering the construction industry, leasing and business services, mining, and manufacturing. industry, wholesale and retail industries.

At the end of this year, the Ethiopia-Hunan Industrial Park will start construction in Adama, Ethiopia’s second largest city. According to the staff of the industrial park, 16 Chinese companies have agreed to settle in the park, including Sany Heavy Industry, Foton Motor Co., Ltd., etc. The companies entering the park cover equipment manufacturing, furniture and home appliances, construction materials, textiles and clothing and other fields. This is just a microcosm of the production capacity cooperation between the two countries. The Oriental Industrial Park, built in 2007, has attracted more than 70 companies, most of which are Chinese companies. Huajian Shoe Factory employs more than 5,000 local workers and is a major employer and foreign exchange earner in the country.

China’s investment in Africa has attracted widespread attention. In the first half of this year, the international accounting firm Ernst & Young pointed out in the "Africa Investment Attractiveness Report" that since 2005, China has invested in 293 projects in Africa, with an investment amount of US$66.4 billion, creating more than 130,000 jobs. Last year, the number of jobs created by Chinese investment in Africa reached a new high, doubling compared with 2015 and more than three times that of the United States.

McKinsey’s report believes that the depth and breadth of Chinese companies’ participation in the African economy greatly exceeds previous studies. The report shows that there are more than 10,000 Chinese companies investing and operating in Africa, about 90% of which are private companies, and one-third of the private companies are manufacturing companies. These Chinese companies have brought scarce capital, management experience and jobs to Africa. Many Chinese companies have made long-term investments in Africa, and 74% of the Chinese companies surveyed expressed optimism about future development prospects.

The report points out that China’s investment and commercial activities in Africa have brought three major economic dividends to Africa. The first is to create jobs and develop skills. The vast majority of employees hired by Chinese companies are locals. The second is the transfer of knowledge and new technologies. Chinese companies have promoted the modernization process of the African market by introducing new products and technologies to African countries. The third is financing and infrastructure development. The 50 African government officials interviewed said that the main advantages of Chinese companies are their efficient cost structure and fast project delivery speed.