Taking the next step in successful cooperation

Having attracted the attention of dozens of enterprises in the Pearl River Delta city of Dongguan, Huajian Group, China's first shoe supplier to invest in Ethiopia, is pushing ahead to promote an international light industrial park in the African country.

The park, which began construction in 2015, involves capital input of 3.2 billion yuan ($480 million) and covers an area of 126 hectares. Scheduled for full completion by 2020, it is set to become the leading base in Ethiopia supplying footwear, leather products and garments.

The investment decision was made in the wake of the successful operation of the group's footwear project, which started production in 2012 and has put six modern lines in operation and offered jobs to more than 3,600 Ethiopians.

"Labor-intensive industries are losing their competitive advantages in Guangdong. Going abroad to Africa can be an option," said Zhang Huarong, chairman of Huajian.

Zhang based his analysis on the rising production cost in Guangdong, the province's strategy to upgrade its industrial structure, support from the government for the Belt and Road Initiative, as well as the rich resources, colossal market potential and much lower wage cost in Africa.

Industrialization, especially light industry manufacturing, is among the fields Guangdong is underscoring in its proposal for stronger ties with African countries, with others being agriculture and agribusiness, infrastructure development, trade and energy development, vocational training, tourism and culture.

Analysts said Guangdong's proposal is feasible, pragmatic, win-win and mutually beneficial.

On the one hand, Guangdong has benefited much from its wide international cooperation and foreign direct investment in its four-decade long opening-up, which has favorably positioned the province to take part in the Belt and Road Initiative, or specifically its African investments, they said.

Thanks to long-term international cooperation with developed countries as well as the province's strategy to optimize economic structure and promote innovation-driven development in recent years, the province has long occupied China's top position in economic development and has made outstanding achievements, infrastructure and energy development, education and training as well as tourism, said Guo Chu, an international economy researcher with the Guangdong Academy of Social Sciences.

On the other hand, such sectors are in urgent demand and their market potential is immeasurable in African countries, the researcher said.

An op-ed article written jointly by senior executives of the World Bank, China Development Bank and UNIDO and a top Ethiopian official last year said that Africa needs a skilled labor force, infrastructure and a more conducive investment climate, which requires lower transport and energy costs and agribusiness among all.

Guo suggested that Guangdong investors engage more in the continent's strategic industries and shift more attention in time to value-added and technology-intensive product manufacturing, to minimize negative impacts on local fledgling businesses and trade friction.

(China Daily Africa Weekly 09/02/2016 page14)