The Chinese economy has entered the “new normal,” which is characterized by structural adjustment and stable growth. This will create new development opportunities for China’s cooperation with the African continent. 

Africa is rich in natural resources but has historically had a low level of industrialization. According to the Africa Economic Outlook Report 2013 released by the UN Development Programme, as much as 60 percent of Africa’s labor force is employed in agricultural industries, and primary products account for nearly 80 percent of exports. Support for industrialization will undoubtedly inject new vitality into African development.

The ongoing optimization and upgrading of China’s economic structure can provide new opportunities for China-Africa capacity cooperation. As the biggest developing country in the world, China is undergoing industrialization. It ranks first globally in its output of 220 kinds of major industrial products, according to the International Council of Academies of Engineering and Technological Sciences. Africa, which contains more developing countries than any other continent, has just started the journey toward industrialization.
 

Economic transformation, upgrading and structural adjustment are essential under the “new normal” of the Chinese economy, which will require certain industries to transfer overseas. It is the right time to carry out cooperation between China and Africa in international capacity and equipment manufacturing.

At the Johannesburg Summit of the Forum on China-Africa Cooperation in early December 2015, Chinese President Xi Jinping proposed 10 major China-Africa cooperation plans in the coming three years, involving not only trade, investment facilitation and infrastructure but also industrialization, agricultural modernization and green development. To ensure the smooth implementation of the initiatives, China will offer $60 billion in aid. The measures promise to revitalize China-Africa economic cooperation.
 

Investment is one engine driving the rapid development of China-Africa economic relations. In 2014, China’s direct investment in Africa reached $4 billion, up 14 percent from the previous year. At present, more than 2,500 Chinese enterprises invest and operate in Africa in such fields as finance, infrastructure, textiles and household appliances.
 

Unlike European countries, which tend to concentrate investments in extractive industry, China invests in diverse fields that are more conducive to African industrialization. Reports from many financial institutions have indicated that the annual growth rate of the cumulative investment in Africa is around 10 percent for China’s manufacturing industry. From 2003 to 2014, the manufacturing industry accounted for the largest portion of new projects by Chinese enterprises in Africa.
 

China’s investment in infrastructure is welcomed in African countries. It is estimated that Africa requires $900 billion for infrastructure investment. China’s investment and financing has provided powerful support for African countries in such aspects as communication, transportation, energy and harbor construction, especially in key fields like public services. A statistical report from the Standard Bank of South Africa pointed out that two-thirds of funds in African infrastructure construction are from China.
 

China’s private enterprises have become an emerging source of investment in Africa under the “new normal.” Compared with state-owned enterprises, private businesses have advantages like distinct property rights, flexible strategies and the ability to swiftly respond, and they are more popular with host countries. According to the Yellow Book of Africa: Annual Report on Development in Africa (2014-2015), 70 percent of Chinese enterprises investing in Africa were private or small and medium-sized enterprises as of the end of 2013. Private enterprises will continue to fuel China-Africa economic cooperation in the coming decade.

 

Cui Shoujun is from the School of International Studies at Renmin University of China.