FOCAC boosts new industrialization momentum for Africa

AdronephototakenonMarch11,2024showsacargoshipattheLekkiportinLagos,Nigeria.[Photo/Xinhua]

The2024summitoftheForumonChina-AfricaCooperation(FOCAC)willbeheldinBeijingfromSept.4to6,China'sforeignministryspokespersonHuaChunyingannouncedrecently.LeadersfromChinaandAfricancountrieswillgatherinChina'scapitaltofurtherstrengthenjointeffortsinsolidarityandcooperation.

Sinceitsestablishmentin2000,theFOCAC,amilestoneinthedevelopmentofSino-Africarelations,hasservedasaplatformandmultilateralmechanismforeffectivelyadvancingcollectiveconsultationandexpandingcooperationbetweenChinaandAfricancountrieswithinapragmaticframework.

TheFOCACisguidedbyfivemainobjectives:promotingcooperation,enhancingunderstanding,ensuringequalconsultation,expandingconsensusandstrengtheningfriendship.Thishasinjectednewimpetusintolong-standingChina-Africarelations.Givenallofthis,China,theworld'slargestdevelopingcountry,andAfrica,hometothegreatestnumberofdevelopingnations,havefoundcommonground.

Facedwithsimilarchallengesinaworldfraughtwithprofoundvolatility,ChinaandAfricancountrieshavecometogetherviamutualinterests,withbothreapingenormousbenefitsfromtheirallianceviatheFOCAC.

Organizedtrienniallyattheheads-of-statelevelwithAfricanandChinesecitiestakingturnsashost,theFOCACsummitischaracterizedbythereleaseofathree-yearjointactionplanthatnotonlyadvancesrespectivedevelopmentpathwaysofthetwopartiesbutalsocontributestothebuildingofaclose-knitChina-Africacommunitywithasharedfuture.

ForAfricancountries,theFOCACisawindowofopportunitytoattractmoreChineseinvestmentsandtoalsotapintoChina'svastexperienceandexpertiseinvariousfields.SincetheestablishmentoftheFOCAC,AfricancountrieshavewitnessedaninfluxofChineseinvestments,akeysourcefortheregion'sindustrialgrowthandaninvaluableresourceforthetimelyachievementoftheAfricanUnion's2063Agenda,thecontinent'sblueprintforindustrialandeconomicdevelopmentoverthenext50years.

Overthepast24years,theFOCAChasbeenaspringboardforahostofChineseenterprisestoexpandtheirinvestmentsinAfrica.Duringthisperiod,ChineseenterpriseshavebuiltindustrialparksandeconomiczonesalloverAfrica,contributingsignificantlytoAfricancountries'industrializationandthecontinent's"value-added"industrialpotential.Recognizedasasourceoftechnologytransfer,infrastructurefinancingaswellasemploymentandskillstransfer,Chinese-builtindustrialandeconomiczonesprovideanumberofbenefitsincludingcontributingtotheexpansionofAfrica'smanufacturingproductionandexports,thegrowthoflocalinnovationandthefurtherenhancementoftheregion'sintegrationintoglobalvaluechains.

TheZambia-ChinaEconomicandTradeCooperationZone,China'sfirstoverseaseconomicandtradecooperationzoneinAfrica,wasestablishedin2007.Sinceitsopening,themulti-functionaleconomiczonehasmadesteadyprogress,contributingsignificantlytoZambia'sdriveforindustrialization.DatafromChinaNonferrousMetalMiningGroupCo.,Ltd.(CNMC),thecompanybehindtheZambia-ChinaEconomicandTradeCooperationZone,showsthatthezonehascreatedmorethan10,000localjobsandhasattractednearly100businessesinvarioussectorsincludingagricultureandmanufacturing,mining,engineeringequipmentassemblyandbanking,withtotalinvestmentssurpassing$2.5billion.

ForAfrica,theflowofChineseforeigndirectinvestmentiscrucialintransformingandupgradingthecontinent'straditionalsectorsandfosteringemergingindustries,asitisanimportantsourceofinfrastructurefinancing,technologytransfer,skillstransferandanindispensablesourceforinjectingnewmomentumforindustrialization.Forexample,Africahasabundantnaturalresourcessuchasvastmineraldepositsand65%oftheworld'sarablelandyethasminimalcapacitiestoharnessnaturalresourcesforsustainabledevelopment.

But,overthelasttwodecades,thesurgeinChineseFDIflowhasincreasinglyprovidedcountriesintheregionwiththeopportunitytochartnewdevelopmentpathwaysthatseektobalanceproductivitygrowth,jobcreationandecologicalconservation,whicharethebedrockofsustainableeconomicgrowth.DatareleasedbyChinaAfricaResearchInitiativeatJohnsHopkinsUniversityshowsthatannualChineseFDIflowstoAfricahavebeenincreasingsteadilysince2003–risingfrom$75millionin2003to$5billionin2021.Thedataalsoshowsthatsince2013ChineseFDIflowstoAfricahaveexceededthosecomingfromtheUnitedStates.

ThroughtheFOCAC,ChinahasplayedacriticalroleinacceleratingAfrica'sindustrializationanddevelopment.Forexample,toaddressAfrica'shugeinfrastructuregap,animpedimenttotheindustrializationprocess,Chinahasmadeunparalleledcontributionsbyworkingwithrelevantstakeholderswhoseektobridgethecontinent'sinfrastructurefinancinggap.ApolicypaperfromtheCenterforGlobalDevelopment,aU.S.-basedthinktank,showsthatbetween2007and2020China'stwomaindevelopmentfinanceinstitutions(DFIs),ChinaEximBankandChinaDevelopmentBank,invested$23billionininfrastructureprojectsacrossAfrica.Fora13-yearperiod,infrastructureinvestmentsmadebythesetwoChineseDFIshavebeen$8billionmorethanthecombinedinvestmentsattributedtothetopeightlenders,includingU.S.andEuropeandevelopmentbanks,theWorldBankandtheAfricanDevelopmentBank.

FundsfromChineseDFIs,typicallyconcentratedinenergyandtransportinfrastructureprojects,havecontributedsignificantlyinlayingasolidfoundationforsustainableindustrializationinAfrica.AccordingtotheInfrastructureConsortiumforAfrica(ICA),ChineseinvestmentsinAfrica'sinformationandcommunicationstechnology(ICT)infrastructurepassed$1billionin2015.ThankstothemassiveandcontinuedinvestmentsfromChineseenterprisesintotheregion'sICTsector,Africa'ssustainableindustrializationpursuitisyieldingconcreteresults.

InNigeria,Africa'slargesteconomy,aGSMAreport(2024)showsthatthemobilesectoraccountedfor13.5%oftotalGDPin2023,includingthedirectvalueaddedbywiderICTindustriesandthemobilesector'simpactinenhancingtheproductivityofothersectors.DigitaltransformationisnotpeculiartoafewAfricancountries.In2022,mobiletechnologiesandservicesgenerated8.1%ofGDPacrosssub-SaharanAfrica(SSA)thatamountedtoapproximately$170billionofeconomicvalueadded,supportingaround3.5millionjobsintheregion.Mobiletechnologies'contributiontotheSSA'seconomyisexpectedtoreach$210billionby2030.

Attheupcoming2024FOCACsummit,itisprojectedthatnewopportunitiesforenhancedcooperationinkeyareas,suchasICT,renewableenergy,tradeandtransportwillbemappedout,withthesefuturechannelscrucialforAfrica'sfurtherindustrializationandgreendevelopment.