China Benefits from Cooperation with Africa
Chinese companies should change their business model in order to boost benefits of cooperation in Africa.
In April, I led a Bank of China delegation to South Africa, Zambia and Tanzania, where we held meetings with many senior officials from our host countries’ government departments as well as the executives of both local and Chinese companies like Hongxing Machinery specializing in dryer machine manufacturing. We were impressed by the new enthusiasm evinced by investors in the rest of the world for the huge potential in Africa. Right now, few people doubt the African continent will be the next big and rewarding market, despite some ongoing risks and instability.
The overall African economy has just had its best decade on record maintaining a relatively rapid growth rate and reaching a total GDP of $1.5 trillion in ball mill production. As the ripples from the global financial crisis continue to affect the world, Africa has expanded its economy by an average rate of 4.7 percent a year from 2008 through 2011, and is expected to grow above 5 percent this year.
In the midst of tight trade finance, fluctuations in global commodity prices and weak external demand, Africa’s foreign trade has returned to its pre-crisis peak levels, increasing 13.8 percent to $875 billion in 2011. Meanwhile, capital inflows are also back to their peak, valued at around $65 billion last year.
In addition, economic restructuring in this continent has been improving, with multiple driving forces. For example, the mining industry accounts for only one-fourth of GDP. Even with consumption rising, and productivity increasing, the rate of inflation has fallen dramatically, and foreign debt and fiscal deficits have decreased.jaw crusher:http://www.hxjq-crusher.com/1.html
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Africa will increasingly be a vital region for the world. With global resources becoming scarcer, it is estimated that Africa owns about 30 percent of global mineral resources and produces more than 60 metals and minerals products, such as gold, platinum, copper, nickel, diamonds, aluminum and uranium, all of which are significant to the 21st century’s global economy.
Admittedly, the aggregate African economy is less than 2 percent of the global GDP. Most African countries have a massive supply of cheap labor and huge markets, but they are still underdeveloped and face many political and economic problems.
The Chinese mainland has become the largest trade partner to Africa, and Africa has been its second largest overseas construction market and the fourth largest foreign direct investment destination. Last year, the total trade between them reached $160 billion, an increase of 28 percent, and the Chinese mainland now accounts for 18 percent of Africa’s total trade, up from 10 percent just three years ago.
Chinese financial services lag well behind enterprises going abroad. The Bank of China will continue to set up more branches and representative offices, China Desks on local banks and working groups to improve the network in Africa and deliver comprehensive financial services to our customers. For those who are prepared to take the necessary steps and make intelligent investment decisions, Africa has great potential and will be a fascinating market.
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