Beijing - Beijing is eager to rewrite negative perceptions
of its growing ties with Africa at a summit this week, citing expanding private
investment and a push to shift low-end manufacturing to the continent long seen
as a commodities and energy cache for China.
Chinese state-owned firms in Africa face criticism for using
imported labour to build government-financed projects like roads and hospitals,
while pumping out resources and leaving little for local economies, an image
Beijing wants to change at the Forum on China-Africa Cooperation beginning on
“As China's economy transitions, shifting labour intensive
industry to regions outside of China offers production opportunities,” Zhong
Jianhua, China’s special envoy to Africa, told Reuters this week.
“African countries should seize this opportunity,” he added.
“They can step into a track that China has taken in the past to develop their
Chinese President Hu Jintao will speak at the summit’s opening
day and is expected to announce a new set of loans for the continent. At the
last meeting held three years ago, China pledged $10bn.
China's economic trade with Africa reached $166.3bn in 2011,
according to Chinese statistics. In the past decade, African exports to China
rose to $93.2bn from $5.6bn.
Industrial and Commercial Bank of China, for example, the
world's most valuable lender, has invested more than $7bn in various projects
across the continent.
The China Non-Ferrous Metals Mining Corporation however became the maligned face of Chinese
investment during a bitter election campaign last year in Zambia, where it owns
several lucrative copper deposits.
Along with the state-run firms, a growing number of smaller
private Chinese businesses are looking to frontier markets like Africa to sell
consumer goods and join in on promising growth prospects.
"A lot of African growth is no longer just commodity growth.
It is growth in telecoms, services, and consumer products,” said Diana
Layfield, Standard Chartered Bank’s CEO for Africa.
An official with Africa’s multilateral lender however said
concern remains that countries will just shovel resources out and not look to
“They (African nations) are thinking about the immediate
resources that could get them billions” of dollars, said Anthony Nyong, manager
of the compliance and safeguard division at the African Development Bank. “We
need to gradually work at building the capacities of African countries to see
how they can negotiate good deals and know what is important for them.”
China has also found it difficult to navigate tricky
political and conflict problems in Africa, particularly as the main oil
investor in both Sudan and South Sudan.
China still faces a struggle to encourage companies to
invest and shift production to Africa even if labour costs are lower. Smaller
firms in particular are overwhelmed by the world’s second largest continent
with more than 50 UN member states that have diverse languages, cultures and
“The idea that it will happen quickly, except in selected
circumstances, is probably far-fetched,” said Layfield, with Standard
Chartered, adding that one factor accelerating some trade now is a sharp drop
in container transport costs following the 2008 financial crisis.
Jeremy Stevens, a Beijing-based China economist at Standard
Bank, said even if Chinese firms move to Africa they face competition from
other low-cost producers such as India, Bangladesh, Vietnam, Mexico and Turkey
- and inland China.
“It is more costly to make something in Africa because of
bottlenecks in infrastructure, human capital and access to finance, which have
been exacerbated by poor governance and mismanagement,” he said.