China-Africa Sustainable Trade Partnership

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China Capabilities and Limitations in Investment & Technology Trade With Africa: How the two markets are forging a more Sustainable Partnership Prof. Dr Jean Marie CISHAHAYO Senior Advisor for China Africa Capacity Training Project – United Nations Institute for Training and Research – UNITAR/CIFAL Shanghai www.unitar.org Professor at ESSCA French Business School and Shanghai Jiaotong University. Shanghai April 11, 2013

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

Transcript of China-Africa Sustainable Trade Partnership

Page 1: China-Africa Sustainable Trade Partnership

China Capabilities and Limitations in Investment & Technology Trade

With Africa:How the two markets are forging a more

Sustainable Partnership

Prof. Dr Jean Marie CISHAHAYO

Senior Advisor for China Africa Capacity Training Project – United Nations Institute for Training and Research – UNITAR/CIFAL Shanghai www.unitar.org

Professor at ESSCA French Business School and Shanghai Jiaotong University.

Shanghai April 11, 2013

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1. Content.1. Global economic downturn: Opportunities for China-

Africa strategic Cooperation.2. Why Africa became an attractive market for China

and other during last decade? 3. Understanding the framework and mechanisms of

China - Africa Economic Cooperation. 4. China Limitations in Investment and Trade with

Africa and impact on sustainable Development.5. Where are other business opportunities for Western

Companies in Africa?

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Africa Map

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1. Global economy downturn: An

opportunity for China - Africa?

China access into the WTO: Weak Chinese companies competition with western companies especially the SMEs. China “Going out policy” and weak internationalization of Chinese enterprises. China Pressure on foreign currency reserve ($3.2 Trillion) an opportunity for technology trade and investment to Africa. Weak economic recovery in USA and EU : China Trade expansion in emerging markets such Africa.

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非洲地图

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African oil reserves非洲石油储备

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Africa coal reserves非洲煤炭储量

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African natural gas reserves

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- In 2013, Both economies are showing muscle and growth around 8% for China and around 6% for Africa.

-The two matching economies based on supply and demands, both products and services.

-Trade volume reached around $ 220 Billion in 2012 expect to reach 300 Billion in 2015 ( Mofcom)

- From 2010, China became Africa largest Trade Partner surpassing USA and EU countries.

- Africa is China largest overseas market for contracted projects (Infrastructure)- More than 2000 Chinese call Africa Home.

The two matching economies.

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4. China and Africa trade: The Global Impact

Africa is likely to surpass EU & USA to become China largest trade partner in the nest 3 to 5 yearsChina Export to Africa is growing 25% year on year while import jumped 21,5% last year. EU is China largest trade partner with trade volume of $ 567 Billion in 2011. . USA is 2nd largest trade partner with 446 Billion trade volume in 2011. China – Africa trade volume is expected to close the gap quickly to reach 500 Billion Investment to Africa is expected to grow 30-40% in 2013.(WB).

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2. Why Africa Became an attractive markets for China?

1980 – 1990 : First decade of Opening policies and Economics reforms in China

Hard Political transitions in Africa and Instability .1990 – 2010 : Regional economic Blocs: EAC, SADC, ECOWAS, ECCA, COMESA AGOA : Africa Growth Opportunity Act is a trade cooperation with USA. Cotonnou ACT : is trade between EU and Africa. EU : Africa Union and its new mission. NEPAD : The New Partnership for Africa Development. 1 Billion Population and consumers.

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3. Understanding the framework and guidelines for China Africa

FOCAC : Forum on China Africa Cooperation. CADF : China Africa Development Funds : Investment in projects of national development interest such : Infrastructure, Energy, Minerals, Telecommunication, ICT, Ports , Airports, Roads, Agriculture productivity etc.. EXIM Bank : Concessional Loans and Equipment purchasing for development.

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4. Challenges on sustainable investment from China.

Investment and Technologies by SOEs at more than 60% in Africa (FDI, Concessional Loans, Credits etc) Weak participation of private sector capable companies , lack of information and strategies. Lack of good policies to support Chinese SME and small business expansion to Africa. Imports of row materials and resources to China. Infrastructure and buildings broken after few years and weak maintenance capability.

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5. What are other opportunities for western companies? Help on sustainability.

AGOA Opportunities : Manufacturing in Africa and reach USA Market duty free , No quota. Cotonnou Opportunities: Manufacturing in Africa and reach EU markets duty free no quota. Renew the traditional advantage on communication and relationship with Africa. Innovative and competitive products in good quality are still imported in western countries. Follow UN and World Bank requirements on Africa sustainable development with Innovative plans for climate change and new technologies applications. Opportunities in services industries : Tourism, education, Banking, creative economy etc..

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6. Some Challenges on China

Africa cooperation.Despite 50 years China Africa Cooperation, Relations still dominated by Government to Government, people to people relations still very low Problem on human resources ( Africans graduates in China) are not engaged.Private Chinese Companies new interest in Africa, low vision and lack of appropriate information and strategies. Media report on China and Africa cooperation , positive and negative feed back. The cross culture and communication: Less than 10% Chinese know Africa, Less than 10% of Africans know China.

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6. Conclusions and recommendations.

- Can china development model work for Africa? Yes if Africa work on a strong state management and Good Governance but only lessons to learn.

- It is time for African countries to rethink new strategies to work with China.

- Private sector and self employment has to take lead.- China and Africa cooperation is in good shape and is

going to be even one of the best model in South –South sustainable partnership.

- Is the partnership sustainable and win-win?

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Thanks you for your attention !

Prof. Dr Jean Marie CISHAHAYOEmail : [email protected]

Mobile: 13901823065Skype: cishahayo1.