How China is making a difference

African leaders want more Chinese participation in the continent, head of UN commission says

The head of a giant pan-African economic institution says he has a ready answer when he hears criticism about the large investments China is making in Africa.

"When people criticize this, my answer is that China only invests about 5 percent of its total overseas investments in Africa. I want more, not less," says Carlos Lopes of Guinea Bissau, executive secretary of the United Nations Economic Commission for Africa.

Lopes spoke to China Daily in an exclusive interview at the Ninth Africa Development Forum in Marrakech, on Oct 12-16.

"Africa should welcome Chinese investment because currently, China is the No 1 trading partner for Australia, Brazil, Colombia, Italy, Peru and the United States. Why not us?"

China is not just another partner for African countries, but an important one that could facilitate Africa's future transformation, Lopes says. He adds that he would like to see China's engagement become more strategic and sustainable.

He dismisses claims that China is exploiting African resources and acting as a neo-colonialist, saying the consensus among African leaders on this issue is that they want the partnership to be lifted to the next stage.

Africa needs more new actors on the development stage, including countries and companies to focus on crucial sectors such as telecommunications and finance, and not those interested only in speculation and quick profits, he says.

"For Africa, we are very excited about the prospects for cooperation with China because, contrary to other regions and countries, China has a long-term vision in the things it does, not just with Africa, but in general."

"It has a level of predictability, and this is very important for Africa. China sees opportunities because it has that long-term vision but others don't. You have a lot of investors in London who have liquidity and are looking for opportunities for investment, but when you talk about Ebola, they do not invest anymore.

"This is the fundamental difference between China and others," he adds.

China's investment in Africa is rational and practical, he says.

There are three elements, including aid, infrastructure and private investment, that are vital from China's side to better participate in Africa's economic transformation, Lopes says.

He says Chinese aid should become strategic as many countries are still fragile and even need more help in building proper state institutions.

"Initially, it was responding to one project here and there, nothing integrated into a set of projects.

"It started by responding to the demands of governments for some buildings, hospitals or stadiums. I think China can help these countries to be more strategic, to help them meet a certain goal set by the African governments. China should use its experience in the area of industrialization to help Africa."

China's development experience is important for Africa, Lopes says, because it had a lower per capita income compared with many African countries 30 years ago but has successfully transformed itself.

"China had very low agricultural productivity and now it has high productivity. It's about an exchange of experiences. That's the future of aid from China. We want to share the Chinese model," he says.

"China is not just one of the partners, China is our No 1 trading partner and in the next five years, it's going to become our No 1 investment partner."

This would benefit both, he says. China will benefit as the leading partner of the continent, becoming the first beneficiary of its expanded consumer market.

"We are talking of a market that will have 2 billion people by 2050," Lopes says. "So China will benefit from that. And we Africans will benefit because the fastest-growing model in the world has been the Chinese one, and we want that experience to be able to move fast," he adds.

Relations in trade and investment are gradually changing, involving more developing countries and South-South partnerships, he says.

"In trade, it is mostly rising from the South and the faster-developing countries. They used to be about one-quarter of African trade about 15 years ago, but they are now half, and in 10 years, they will be 60 percent. The No 1 is China," he says. "In investments, it is the same scenario but it has not yet beaten No 1 and 2 positions, which are the United States and the European Union."

On the assertion that the US should try to catch up with China in Africa, he says it must be clarified that the US is still the biggest player in many of Africa's sectors.

"The US investments are mostly in oil, which is not the future, whereas the investments from other countries are in the new, dynamic African economy. So the catch is how the US companies can catch up with new dynamics, but not in amounts, because in amounts the US is still No 1," he says.

Infrastructure remains the biggest challenge for Africa, which is a dire need in order to spark its industrialization, which is the future engine of this continent.

"Infrastructure construction and industry investment from China can take place at the same time," he says.

As China faces the challenge of relocating traditional, labor-intensive industries, it can transfer them to Africa, Lopes says. But that should be done according to priorities because conditions on the ground must be taken into consideration, he says.

"If you have to 'delocalize' some of your operations out of China, textile, shoe manufacturing and toys should be the first to be delocalized. They are the least complex and sophisticated, and therefore require the least elaborate skills. So your workforce migrates in China to more sophisticated products," he says.

"You need to start from the bottom and grow. If you delocalize, you will not pay high production costs. If you delocalize it to Ethiopia, we love it because it creates jobs."

Threats to international security can be dealt with globally but this should not lead to trying to deal with all the problems of a country.

"We have blurred the lines between peacekeeping and development issues," he says. "The principle of home-grown solutions is key, and it's the only one that is valid across the world."

Lopes says China's approach to Africa is appreciated by Africans.

"China is not giving lessons about democracy, because it's for Africans to decide what form of democracy to embrace, not for others. In any case, China, as a member of the international community, responds to humanitarian crises such as Ebola without giving conditions."

lilianxing@chinadaily.com.cn

(China Daily Africa Weekly 10/31/2014 page8)