The growing presence of Chinese enterprises in Africa is to a large degree winning positive popular reviews.
The latest report by China-Africa Business Council (CABC) on Chinese Enterprises Investing in Africa indicates that Beijing’s increasing strategic ties with countries in the continent in recent years have resulted in positive transformation.
According to the report, Chinese Private Enterprises (CPEs) in particular, have become the main forces driving China-Africa economic and trade investment cooperation.
“CPEs are undergoing a transition from “going to Africa” through “settling in Africa”, to “establishing roots in Africa,” the report, that was released in Beijing and followed virtually by many across the continent stated.
From an infancy to an accelerated stage of development, the report noted that Chinese enterprises have contributed to industrialization and the improvement of livelihoods in Africa, making them one of the driving forces promoting Africa’s economic inclusive growth.
“Driven by market power, Chinese companies, CPEs, in particular, and more Top 500 Private Companies are focusing on the development and cooperation in new fields such as medium and high-tech manufacturing, medical care and pharmaceuticals, digital economy, and aviation industry while paying attention to traditional investment fields.” The CABC report said
As a result, the report says that this had led to creation of jobs, improved the construction of infrastructure, and drove park management of host countries.
The report shows that Africa, as a consequence, has achieved rapid urbanization, great potential for manufacturing, and technological revolution.
Specifically, the survey estimates that by the end of last year, the stock of Chinese enterprises’ direct investment in Africa was not less than 56 billion USD. Of this, private enterprises account for about 70% of the scale of Chinese enterprises’ direct investment in Africa, while the proportion of a hundred key Chinese Private Enterprises reinvesting in Africa is around 30%.
“We believe that the AU Agenda 2063’s inclusion of economic inclusive growth as one of important goals improved Chinese enterprises’ mid-to-long term appeal and can help Africa achieve resilient growth and unleashed potentials,” Experts who drafted the report indicated
They analyzed the internal motivations of Chinese companies investing in Africa and found that returns on investment, market expansion, industrial transfer and the need for resources, informed their decision making.
But there are some problems linked to Chinese firms seeking to/and or already operating in the continent that were highlighted in the report. They include lack of long-term planning for investment in Africa, insufficient coordination among Chinese enterprises, lack of overseas business experience and risk management capacity, cross-cultural communication challenges, lack of support from professional service agencies as well as the fact that these enterprises have not yet established sustainable investment and financing models and support systems.
On their part, these companies cited numerous uncertainties that alter their decision making such as safety-related uncertainties, structural problems of the economy, policy fluctuations, currency exchange rates, insufficient industrial support, and salient differences between countries among other bottlenecks.
Representatives from academic institutions, UN agencies, embassies to China and enterprises from Africa, China, the US, and the UK attended the ceremony and made remarks.
The Director-General in the Department of African Affairs at China’s Ministry of Foreign Affairs, Wu Peng welcomed the report findings even as he expressed confidence that the engagements between the two sides will have a more positive impact especially to the masses in Africa.
“I hope it can be a new starting point for enterprises. Transforming from Going to Africa to Taking Root in Africa, they’re upholding more social duties for the well-being of locals & society.” He said
On his part, Wamkele Mene, the Secretary-General of the African Continental Free Trade Area (AfCFTA) Secretariat said the survey will no doubt raise the public awareness of China’s development assistance in Africa.
“From my preliminary reading of the report, it reflects the important efforts of Chinese entrepreneurs and their expectations of investing in Africa and lends credence to South to South Cooperation and commitment that all of us hold dearly,” the AfCFTA Secretariat boss said