Business / Economy

In step with the growth of Africa

By Jiang Xueqing (China Daily) Updated: 2014-11-25 08:13

Apart from giving financial support to Chinese companies, the South Africa representative office also provides information on the country's investment environment and projects, gives analyses of the country's political and economic dynamics and helps companies improve management.

The fund and Shenzhen Energy Group Co Ltd jointly invested in a power plant in Ghana. Two 100-megawatt, gas-fired generating units have been operating since December 2010, followed by a 360 mW expansion. Currently, power generated by the plant accounts for 15 percent of Ghana's total power generating capacity, which has helped stem the nation's electricity outages, said He Yali, head of the fund's representative office in Ghana.

The fund also worked with HNA Aviation Group, based in Hainan province, the Ghana-based SAS Finance Group and the Social Security and National Insurance Trust (Ghana) to establish Africa World Airlines Ltd, a regional airline company targeting travelers in West Africa.

After the airline's maiden flight on Sept 21, 2012, it opened a direct flight between Accra, capital of Ghana, and Lagos, the most populous city in Nigeria. It is expected to soon open direct flights from Ghana to Sierra Leone and Burkina Faso.

He said: "Our goal is to open direct flights between big cities in West Africa as well as direct flights from Ghana to other countries like South Africa."

Africa has maintained relatively rapid economic growth in recent years. The International Monetary Fund said in a regional economic outlook report that growth in sub-Saharan Africa is expected to pick up this year, despite global headwinds that moderately lowered the region's performance last year.

Strong investment demand continues to support growth in most of the region, while output is projected to expand by 6 percent this year, well above the average global growth of 3.3 percent, according to the IMF. Under these circumstances, China and Africa are embracing new opportunities for investment and economic cooperation.

Chi from CADF said: "Africa is in the initial stage of industrialization and urbanization. It has huge potential for development in manufacturing and infrastructure construction. At the current stage, Chinese products, technologies and experience in production and management are suitable for Africa. Furthermore, the Chinese government is paving the way for closer cooperation with African countries in terms of policies."

China has become the largest trading partner of Africa over the past five years. In 2013, bilateral trade hit $210.2 billion, up 5.9 percent from the previous year. Today, China has an increasingly clear investment strategy for Africa and attaches great importance to industrial development plans. But as many Chinese companies speed up their overseas expansion, they will face tough tests in navigating government policies and recruit talent.

The lack of talent familiar with both international practices and regulations has become a serious impediment for Chinese companies in growing overseas, Chi said.

"To encourage banks to set up overseas branches, buy banks in other countries, or develop financial cooperation with international agencies, the Chinese government should reform the regulation system and evaluation mechanism for banks and give them greater independence in making investment decisions," he said.

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