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China, Africa deepen production capacity cooperation

(By Belt and Road Portal)

Updated: 2017-07-21 08:31:08

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Production capacity cooperation between China and Africa has been greatly enhanced under the Belt and Road Initiative proposed by China in 2013.

Generally speaking, international production cooperation has been focusing on manufacturing and relevant infrastructure, as well as exploitation of energy resources.

Infrastructure and industrial parks are two priorities in China-Africa capacity cooperation.

By the end of 2015, China's direct investment stock in Africa had reached US$34.7 billion, and nearly 3,000 Chinese companies had invested in such fields as mining, building, manufacturing, finance, scientific research and technology services. In the future, more Chinese companies are expected to turn to manufacturing, finance and services, which will lead to a more diversified and balanced investment portfolio.

Perhaps surprisingly, Chinese companies have been keen on cooperation with South Africa despite its poor economic performance in recent years.

In March 2016, for example, the world's most powerful narrow gauge diesel locomotive rolled off the production line in Dalian City, China's Liaoning Province. In 2014, CRRC Dalian Co. Ltd. signed a contract worth US$900 million to export 232 diesel locomotives to South Africa. In August, Beijing Automotive, one of China's largest automakers, broke the ground for its new manufacturing base in South Africa’s Coega Industrial Development Zone. With a total investment of US$800 million, the plant is designed to produce 100,000 vehicles annually.

China's technology standards and development concepts have also exerted great influence on Africa.

Ethiopia has been a pilot for China-Africa production capacity cooperation. Chinese companies constructed the Addis Ababa-Adama Expressway, the first such road in Ethiopia and even in East Africa as a whole; the Addis Ababa urban light rail, the first modern light rail in East Africa; and the Addis Ababa-Djibouti railway, the first fully electrified cross-border railway in Africa.

The China-funded Mombasa-Nairobi standard gauge railway (SGR) in Kenya was inaugurated on June 1.

China has also carried out many important infrastructure projects in Nigeria, Zambia, Mozambique, Angola, Zimbabwe and Togo.

By the end of 2015, China had established more than 20 industrial parks in Africa, with a total investment of more than 30.5 billion yuan. They contributed annual taxes of at least 3.6 billion yuan and had created around 26,000 jobs for locals, according to incomplete statistics.

Currently, under the framework of the Forum on China-Africa Cooperation (FOCAC), China has built six economic and trade cooperation zones in five African countries, of which the China-Egypt Suez Economic and Trade Cooperation Zone, Lekki Free Trade Zone in Nigeria, Zambia China Economic and Trade Cooperation Zone and Eastern Industrial Zone in Ethiopia are State-level industrial parks according to the evaluation standards of the Ministry of Commerce.

(The author Yao Guimei is director of the Institute of West Asian and African Studies under Chinese Academy of Social Sciences. This is an excerpt from her article which was first published in Chinese. The translator is Zhang Junmian.)