China-Africa Sustainable Trade Partnership

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Dr Jean Marie Cishahayo's presentation at Green Drinks China Monthly Sustainability Forum in May 2013

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China-Africa Sustainable Trade Partnership

  1. 1. China Capabilities and Limitationsin Investment & Technology TradeWith Africa:How the two markets are forging a moreSustainable PartnershipProf. Dr Jean Marie CISHAHAYOSenior Advisor for China Africa Capacity Training Project – United Nations Institutefor Training and Research – UNITAR/CIFAL Shanghai www.unitar.orgProfessor at ESSCA French Business School and Shanghai Jiaotong University.Shanghai April 11, 2013
  2. 2. 1. Content.1. Global economic downturn: Opportunities for China-Africa strategic Cooperation.2. Why Africa became an attractive market for Chinaand other during last decade?3. Understanding the framework and mechanisms ofChina - Africa Economic Cooperation.4. China Limitations in Investment and Trade withAfrica and impact on sustainable Development.5. Where are other business opportunities for WesternCompanies in Africa?
  3. 3. Africa Map
  4. 4. 1. Global economy downturn: Anopportunity for China - Africa?China access into the WTO: Weak Chinesecompanies competition with westerncompanies especially the SMEs.China “Going out policy” and weakinternationalization of Chinese enterprises.China Pressure on foreign currency reserve($3.2 Trillion) an opportunity for technologytrade and investment to Africa.Weak economic recovery in USA and EU :China Trade expansion in emerging marketssuch Africa.
  5. 5. 非洲地图
  6. 6. African oil reserves非洲石油储备
  7. 7. Africa coal reserves非洲煤炭储量
  8. 8. African natural gas reserves
  9. 9. - In 2013, Both economies are showing muscleand growth around 8% for China and around6% for Africa.-The two matching economies based on supplyand demands, both products and services.-Trade volume reached around $ 220 Billion in2012 expect to reach 300 Billion in 2015( Mofcom)- From 2010, China became Africa largest TradePartner surpassing USA and EU countries.- Africa is China largest overseas marketfor contracted projects (Infrastructure)- More than 2000 Chinese call Africa Home.The two matching economies.
  10. 10. 4. China and Africa trade: TheGlobal ImpactAfrica is likely to surpass EU & USA to becomeChina largest trade partner in the nest 3 to 5 yearsChina Export to Africa is growing 25% year on yearwhile import jumped 21,5% last year.EU is China largest trade partner with trade volumeof $ 567 Billion in 2011. . USA is 2nd largest tradepartner with 446 Billion trade volume in 2011.China – Africa trade volume is expected to close thegap quickly to reach 500 BillionInvestment to Africa is expected to grow 30-40% in2013.(WB).
  11. 11. 2. Why Africa Became an attractivemarkets for China?1980 – 1990 : First decade of Opening policies andEconomics reforms in ChinaHard Political transitions in Africa and Instability .1990 – 2010 : Regional economic Blocs: EAC,SADC, ECOWAS, ECCA, COMESAAGOA : Africa Growth Opportunity Act is a tradecooperation with USA.Cotonnou ACT : is trade between EU and Africa.EU : Africa Union and its new mission.NEPAD : The New Partnership for AfricaDevelopment.1 Billion Population and consumers.
  12. 12. 3. Understanding the frameworkand guidelines for China AfricaFOCAC : Forum on China Africa Cooperation.CADF : China Africa Development Funds :Investment in projects of national developmentinterest such : Infrastructure, Energy, Minerals,Telecommunication, ICT, Ports , Airports, Roads,Agriculture productivity etc..EXIM Bank : Concessional Loans and Equipmentpurchasing for development.
  13. 13. 4. Challenges on sustainableinvestment from China.Investment and Technologies by SOEs at more than60% in Africa (FDI, Concessional Loans, Credits etc)Weak participation of private sector capablecompanies , lack of information and strategies.Lack of good policies to support Chinese SME andsmall business expansion to Africa.Imports of row materials and resources to China.Infrastructure and buildings broken after few yearsand weak maintenance capability.
  14. 14. 5. What are other opportunities for westerncompanies? Help on sustainability.AGOA Opportunities : Manufacturing in Africa andreach USA Market duty free , No quota.Cotonnou Opportunities: Manufacturing in Africaand reach EU markets duty free no quota.Renew the traditional advantage on communicationand relationship with Africa.Innovative and competitive products in good qualityare still imported in western countries.Follow UN and World Bank requirements on Africasustainable development with Innovative plans forclimate change and new technologies applications.Opportunities in services industries : Tourism,education, Banking, creative economy etc..
  15. 15. 6. Some Challenges on ChinaAfrica cooperation.Despite 50 years China Africa Cooperation, Relationsstill dominated by Government to Government,people to people relations still very lowProblem on human resources ( Africans graduates inChina) are not engaged.Private Chinese Companies new interest in Africa,low vision and lack of appropriate information andstrategies.Media report on China and Africa cooperation ,positive and negative feed back.The cross culture and communication: Less than10% Chinese know Africa, Less than 10% of Africansknow China.
  16. 16. 6. Conclusions andrecommendations.- Can china development model work for Africa? Yes ifAfrica work on a strong state management and GoodGovernance but only lessons to learn.- It is time for African countries to rethink newstrategies to work with China.- Private sector and self employment has to take lead.- China and Africa cooperation is in good shape and isgoing to be even one of the best model in South –South sustainable partnership.- Is the partnership sustainable and win-win?
  17. 17. Thanks you for your attention !Prof. Dr Jean Marie CISHAHAYOEmail : cishachina@gmail.comMobile: 13901823065Skype: cishahayo1.

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