BIZCHINA / Top Biz News
Funds work both ways for nation
By Diao Ying (China Daily)
Updated: 2007-04-04 08:44
China is one of the top overseas direct investment recipients and is also
increasing its investments in other economies, especially in Africa, says
a UN report.
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The report on Asian Foreign Direct Investment in Africa, released by
United Nations Conference on Trade and Development (UNCTAD) and United
Nations Development Programme yesterday, shows Africa is emerging as an
important destination for Chinese direct investment.
Though Africa accounted for only 3 percent of direct investment flows
from China, it is increasing dramatically as the trade between China and
Africa rose from $11 billion in 2000 to almost $40 billion in 2005,
according to the report.
Chinese investment in Africa had reached $1.6 billion by 2005, with a
presence in 48 African countries, the report says. China's total outward
direct investment stock, according to the Ministry of Commerce, stood at
$57 billion by the end of 2005.
China's investment in Africa is mainly in manufacturing, resource
extraction, construction and other services, the report says. Sudan is
the largest recipient of direct investment from China in Africa, followed
by Algeria and Zambia.
China's direct investment flows into African economies are mainly in the
form of equity joint ventures with local companies, with over half of
them operating well and only a small percentage incurring a loss.
The successful enterprises meet local demands, and export to other
African countries as well as to Europe and North America.
Many investors are large-scale Chinese multinational corporations,
including Sinochem Corporation and COFCO. Thirty of the 500 projects
undertaken by 2000 exceeded $10 million.
The investors also include some small- and medium-sized enterprises
(SMEs), reflecting the potential for future cooperation between China and
African economies.
Investing in Africa is a good opportunity for Chinese SMEs because they
are flexible in getting information, and quick in decision-making and
market reactions, said Wu Changqi, associate dean of Peking University's
Guanghua School of Management.
The rapid growth of direct Chinese investment in Africa is the result of
common efforts of the governments of China and African countries, the
report says. High-ranking official visits help consolidate mutual
understanding and promote cooperation between China and African countries.
China's direct investment in Africa is likely to keep growing because of
their complementary nature of economic development, said Masataka Fujita,
UNCTAD's chief of Investment Trends and Data Section.
Africa serves as a market for China's manufactured goods. Its investment
in Africa's infrastructure is important for promoting economic
development on the continent, said Xing Houyuan, a researcher with
Chinese Academy of International Trade and Economic Cooperation, under
the Ministry of Commerce.
(China Daily 04/04/2007 page2)
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