Introduction
At a factory in Port Elizabeth, South Africa, workers in blue uniforms meticulously assemble vehicles, while another team maneuver around 300 sport utility vehicles and sedans into a staging area.These cars, manufactured at Chinese carmaker Beijing Automotive Group Co's plant, will be delivered to its customer, South African Airways, and to several dealerships in Pretoria within a week.These cars testify to the inroads Chinese companies are making in the auto market across Africa, from Ghana to Ethiopia, Morocco to South Africa, said Chang Rui, BAIC's vice-president.
China help African in economic growth
With light truck and shoe factories established in Ethiopia, a giant photovoltaic plant generating clean energy in Kenya, and manufacturing facilities producing electronic components, building materials, clothing fabrics, daily necessities and food processing goods in Egypt, Nigeria, Benin, Mozambique, Zambia and Tanzania, Chinese manufacturers are steadily building a solid reputation in Africa for products and services that are not only affordable, but also easily serviceable.
Chinese companies in Africa have traditionally made their mark through large-scale infrastructure and energy projects, said Yao Guimei, a researcher at the China-Africa Institute, which is part of the Beijing-based Chinese Academy of Social Sciences.
"However, as the region embarks on a new phase of development, they have shifted their approach by investing more in modern manufacturing and service-related businesses over the past decade," said Yao, adding these moves have effectively supported international production capacity cooperation and created new jobs in host countries.
For instance, the establishment of BAIC's South Africa factory has not only boosted the development of the South African automotive industry and offered consumers more choices, but also involved over 150 local small and medium-sized enterprises in the process, according to information released by BAIC.
It has created more than 3,000 jobs across the upstream and downstream industry chains and trained a group of professionals and managers.
How china effects in African
In Kigali, capital of Rwanda, NEIITC Co Ltd, a television manufacturer founded by Chinese businessman Liu Wenjun, is able to assemble over 2,000 units of 32-inch televisions daily. With a unit price of 600 yuan ($84), these televisions, once considered a luxury in Africa, are now being watched by a large number of families in Rwanda. The Chinese company today holds about 40 percent of market share in this area in the East African country.
After launching this project with a total investment of over $1 million two years ago, Liu said the market of Rwanda previously was dominated by Indian merchants, who imported TVs from China and enjoyed gross profit margins of up to 50 percent.
However, the company quickly drove down the TV prices while still maintaining a gross profit margin of over 20 percent, after it established a local factory using materials and equipment from China.
The chateristic of this process
"Initially, entering larger markets requires substantial cash flow, and since my capital was limited, starting in a smaller market was a safer approach," said Liu
One key characteristic of the African market is that it is "large but thin. Africa is vast, but the capacity of individual markets is limited. The challenge for Chinese entrepreneurs lies in identifying growth markets, a task that demands sharp insight", said Wang Luo, director of the Institute of International Development Cooperation, which is part of the Chinese Academy of International Trade and Economic Cooperation in Beijing.
With more orders now in hand, NEIITC plans to use Rwanda as a hub to expand into neighboring countries. The company also intends to introduce other household appliances like refrigerators soon, further enriching the product lineup.
The impact
The economic and trade cooperation zones in Africa they have invested in cover sectors such as agriculture, manufacturing and logistics, attracting over 1,000 companies. These zones have made significant contributions to local tax revenue, export growth and foreign exchange earnings.
In addition to boosting businesses related to manufacturing and trade in services in Africa, China is keen to encourage and support financial institutions from both its market and Africa to strengthen exchanges and innovate financial cooperation models in the years ahead.
Shen Xiang, director-general of the Department of Western Asian and African Affairs at the Ministry of Commerce, said the Chinese government will focus on diversifying financial products and supporting cooperation between China and Africa in areas like green development, the digital economy and the growth of small and medium-sized enterprises in the next step.
Dismissing certain countries' "debt trap" narrative in Africa, Shen said that based on a study recently released by the International Monetary Fund, commercial bonds and multilateral debt accounted for 66 percent of Africa's total external debt in 2023, while China-Africa bilateral debt made up only 11 percent. Visit news website for more technology news.
This means that China has never been the main creditor of Africa's debt. Some parties have used the issue of African debt to make baseless accusations. Their objective is merely to tarnish and disrupt China-Africa cooperation, he said.
Post time: Sep-02-2024