Partnerships with Chinese provinces crucial

Lovemore Chikova News Editor—

African countries can move fast towards their industrialisation ambitions if they also consider partnerships with particular Chinese provinces. Most provinces in the Asian country are ready to invest in Africa, but it seems they lack appropriate information on investment opportunities.What is needed is for the African countries to deliberately target provinces which they can work with to attract such investment.

This will help close the huge information gap which seems to exist when it comes to what African countries can offer to the Chinese provinces.

There is need for major campaigns by African countries to market themselves to such areas and to disseminate the correct information to the potential investors.

A tour of China’s Fujian Province by a group of African diplomats this week revealed that in most cases, Chinese investors are not privy to the opportunities in many African countries.

Fujian Province is located on the southeast coast of the Chinese mainland and faces Taiwan across the Taiwan Straits. The tour, which covered several cities in Fujian, also included journalists from African countries who are based in Beijing.

The purpose of the tour was for the African ambassadors to explore what the province offers and how their countries can benefit from such opportunities. They were also enlightened about how Special Economic Zones have transformed Fujian within a few years through the attraction of capital to its coastal cities.

The tour was arranged by China’s department of African Affairs led by Ambassador Lin Songtian, under the Ministry of Foreign Affairs.

Zimbabwe was represented on the tour by its embassy’s Charge d’Affaires Mr Meshack Kitchen.

Presentations made by Chinese officials and representatives of firms from Fujian showed that African countries should do more to attract investors from the province. But the major lesson should have been on how industrial special zones can change the status of an economy overnight. There are a number of pilot SEZs, which the ambassadors toured in the province, all of them generating billions of dollars for the benefit of the Chinese economy.

SEZs are a new phenomenon to Africa, but they are one of the strategies meant to transform the continent’s status through industrialisation.

SEZs are demarcated geographical areas within a country’s national boundaries where the regulation of the participating firm’s activities and the dedicated policies are differentiated from those applied to firms outside the zone.

The regulations are aimed at creating a policy environment and associated infrastructures that are exporter friendly, for both domestic and foreign producers. These zones offer investors tax and administrative advantages.

In Zimbabwe, such trade zones are expected to help promote value addition and product beneficiation in line with provisions of the Zim-Asset, the country’s medium-term economic blueprint.

Government is targeting to establish such economic zones in Bulawayo for leather and textiles, Lupane (petro-chemicals) and the swathe of territory stretching from Victoria Falls-Gwayi-Bing-Kariba for tourism.

The SEZ in Harare’s Sunway City will be a technology hub, another one at Victoria Falls will specialise in finance, while Harare and Mutare will host diamond cutting. It is in this light that the Fujian tour proved an eye-opener for the African diplomats.

Fujian was one of the two pioneer provinces for China’s reform and opening up policy, hence its importance to the country’s industrialisation and economic growth. The ambassadors learnt that the province has established a highly export-oriented economy and a well-developed market, characterised by a dynamic private sector.

Last year, the province’s Gross Domestic Product stood at a massive $414,37 billion, with per capita GDP of $10,680. This GDP is much higher than that of most African countries, with only Nigeria managing to score a GDP of $490,20 billion last year.

Egypt was second with a GDP of $330,76 billion, South Africa $312,95 billion and Algeria at $172,27.

African countries are in the process of attracting foreign direct investment and studying how Chinese provinces like Fujian are doing it will be much useful. The province has impressive economic figures. Its foreign trade volume reached $169,36 billion last year and paid-in FDI stood at $7,68 billion.

International and domestic tourists paid 267 million visits to Fujian last year, generating a total income of about $47 billion. Of these tourists, in bound visits from overseas amounted to 5,91 million, bringing in an income of about $5,61 billion to Fujian.

The African diplomats managed to discover how Fujian managed to set up a modern industrial system within a few years. This will be useful as African countries press ahead with the African Union’s Agenda 2063, which envisages all of the 54 countries on the continent having some form of industrialisation by that year.

This cannot be achieved without learning from success stories from elsewhere and in this case Fujian provided an insight into how Africa’s industrialisation ambitions can come to fruition.

Fujian authorities have established three backbone industries in electronic information, machine building and petro-chemical. But there are many other emerging industries that are gathering pace of development, while scientific and technological innovation is contributing more to economic growth.

African governments need to have a strong re-look at their policies to ensure that they are favourable to doing business. The ease-of-doing-business policy is a must if a country wishes to attract more investors.

It is equally crucial that Zimbabwe’s Office of the President and Cabinet has such a policy, which is expected to change the attitude of investors.

During the Fujian tour, for instance, Ambassador Lin indicated that previously, an investor would require to visit many offices to get their certification to invest in the province. But now all this is done under one roof and the investor gets only one certificate, which contains all the necessary information.

This has helped reduce the waiting period for the investors.

The Chinese central government attaches great importance to Fujian’s further development through granting the province many favourable policies.

Political commitment is also necessary and in the case of Fujian, Chinese President Xi Jinping has made visits to assess progress and gave his recommendations. The province has been designated as the Core Area of the 21st Century Maritime Silk Road, the Pilot Free Trade Zone, the Marine Economic Pilot Zone and Eco-friendly Development Pilot Zone. Almost every city in Fujian hosts an industrial trade zone and the zones range from high-tech industrial zones, free trade zones, to export processing zones.

During their tour, the African ambassadors met with Fujian firms, where they marketed their countries to the potential investors.

In recent years, Chinese provinces’ interest in investing in Africa has grown and is being spurred by the outcomes of the Focac Summit held in South Africa last year.

At the summit, President Xi announced the parameters for future cooperation between his country and Africa. The new phase of this cooperation is underpinned by a 10-point plan that he expounded as the major determinant of the mutual relations and win-win cooperation.

This year, six other Chinese provinces held the Forum on Global Production Capacity and Business Cooperation in Wuhan city of Hubei Province, to seek ways of increasing cooperation with African countries.

The provinces were Hubei, Jiangxi, Shanxi, Anhui, Henan and Hunan.

It is crucial for African countries to respond favourably to such overtures, as the firms from China’s provinces have the capacity to contribute immensely to the industrialisation process on the continent.