In recent years, the political and security situation in Africa has generally shown a trend of improvement and stability. The chronic diseases that plagued Africa's stability and development have eased, but the process of integration has become more difficult. Africa is the region with the most potential for mineral resources development in the world. Its total resource value accounts for 23% of the world's total, but its output only accounts for 9% of the world's total. There is also great potential for development. With the overall foreign capital inflow in Africa decreasing 1/5, Chinese enterprises' investment in Africa is growing against the trend. According to the distribution of investment industries, construction, mining, finance, manufacturing, and leasing and business services rank among the top five Chinese investments in Africa, totaling US $36.74 billion. On the whole, the concentration of Chinese enterprises' investment in non-investment industries has increased slightly and the industry structure has been adjusted. China-Africa manufacturing cooperation has been further strengthened, and financial investment has grown faster.
In recent years, the political and security situation in Africa has generally shown a positive trend. The problems that plagued Africa's stability and development have eased, but its integration process has become more difficult.Africa has the greatest potential for mineral resources development in the world. It accounts for 23 percent of the world's total resources but only 9 percent of production. Chinese enterprises' investment to Africa has grew even as the overall foreign investment flows into Africa fell by 20%.In terms of investment sectors, construction, mining, finance, manufacturing, and leasing and business services ranked the top five in China's investment in Africa, with a total of $36.74 billion. Overall, the concentration of Chinese enterprises in Africa has increased slightly, China-Africa cooperation in manufacturing was further strengthened and investment in the financial sector grew faster.
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South Africa's Rand Commercial Bank (RMB) recently released the 9th edition of its "Africa Investment 2020" report, which covers 54 countries and regions in Africa. According to the report, the top 10 preferred investment destinations in Africa in 2020 are Egypt, Morocco, South Africa, Kenya, Rwanda, Ghana, Côte d'Ivoire, Nigeria, Ethiopia and Tunisia, while Tanzania fell out of the top 10.
In 2000, Africa was called the "hopeless continent" by the British "Economist" magazine ". However, since the beginning of the new century, the African continent as a whole has stabilized from chaos, the economy has grown rapidly for many years, and the peace dividend and demographic dividend have been continuously released. Africa has gradually become a "continent of hope".
Africa is the region with the most potential for mineral resources development in the world. Its total resource value accounts for 23% of the world's total, but its output only accounts for 9% of the world's total. There is also great potential for development. Some minerals in Africa have a great advantage in the world, of which platinum group accounts for 91% of global reserves, uranium accounts for 72%, diamond (diamond) accounts for 47%, and gold accounts for 18%.
Statistics show that since 2013, Africa has become the largest destination for China's overseas mining investment projects. China's investment projects in Africa mainly include copper, aluminum, diamonds, gold, and uranium mines. In the long run, my country's mining companies entering Africa to help promote their industrialization will not only achieve win-win cooperation in mineral resources, but also help promote my country's "Belt and Road" construction and global layout.
So, how can Chinese companies make rational judgments about investing in Africa? A report recently released by the Chinese Academy of Social Sciences may give you some pointers.
Political security situation is better
On September 24, the ''African Yellow Book: African Development Report (2018-2019) ''jointly released by the Institute of West Asia and Africa of the Chinese Academy of Social Sciences, the Chinese African Research Institute and the Social Science Literature Publishing House pointed out that in recent years, the political and security situation in Africa The overall trend is showing a trend of improvement and stability. The chronic diseases that have plagued Africa's stability and development have eased. This trend has become more obvious since 2017.
However, the historical process of Africa and the degree of economic development and Europe are very different, and the process of integration is more difficult. However, in recent years, Africa's development and independent development have accelerated significantly. First, the political determination and consensus of African countries on the issue of integration have increased, and the reform of the African Union has been unprecedented. Second, major measures related to integration construction are gradually being implemented. The construction of the African Continental Free Trade Area and the construction of the African Single Aviation Market are the two most concerned projects in the current African integration process. Thirdly, in the area of peace and security, Africa's efforts to enhance its capacity-building for independent stability have achieved remarkable results.
The overall political and security situation in Africa has continued to stabilize and improve. The endogenous governance factors of African countries have gradually strengthened, and the trend and effect of joint self-improvement have further emerged. However, under the influence of internal and external unfavorable conditions such as the immature democratic politics in Africa, the intensified game of great powers, and the competition in the Middle East Under the influence of spillover and other unfavorable conditions, Africa's political security is still facing complex and profound challenges, but it will not reverse the general trend of improvement in general.
Uncertainty risk continues
The African Development Report (2018-2019) pointed out that in 2018, benefiting from factors such as the rebound in commodity prices, the strengthening of the world economic recovery, and the strong growth of domestic demand, the economic growth rate of the African continent will continue to exceed the level of 3%; it is expected In 2019, Africa's economic growth rate will remain at around 3.5, the main driving factors are the continued growth of private consumption and public investment, rising commodity prices, increased oil production, and good weather conditions.
It is worth noting that the official launch of the African Continental Free Trade Area will provide a new source of impetus for Africa's economic growth. In the future, tariff and non-tariff barriers in the region will be greatly reduced, and the scale of trade will continue to expand, which will promote the diversification of production and services in various countries. And the acceleration of industrialization process is expected to enter a benign track of mutual promotion and coordinated development, to provide a broader market space and a more solid foundation for Africa's economic growth and structural transformation.
Looking to the future, in addition to the above-mentioned favorable factors driving economic growth, it should also be noted that the sustainable economic growth of Africa still faces many risk factors inside and outside the region. At present, the world economy is facing downside risks. The growth rate of developed economies, emerging and developing economies has slowed down, the growth rate of global industrial production and trade has declined, the scale of global foreign direct investment has shrunk, and the trade dispute between the United States and China is pending. Although the prices of major industrial commodities have rebounded, the volatility of oil prices is still large, and the prospects for future world economic growth are not optimistic. In order to withstand the impact of the deterioration of the external environment, African countries need to rely more on endogenous power to promote sustainable economic growth.
At present, the fiscal deficit and current account deficit of African countries have not changed, the inflation rate of some countries is high, and the macroeconomic stability is still worrying. The urgent task is to seek policies and measures to effectively deal with the potential risks of sustainable economic growth, and build a new path of sustainable economic growth in line with the national conditions of all countries.
Non-investment growth against the trend
On September 24, the Institute of West Asia and Africa of the Chinese Academy of Social Sciences, the China African Research Institute and the Social Sciences Literature Publishing House jointly released the "Africa Yellow Book: African Development Report (2018~2019)". The Yellow Book pointed out that the 2017 of African foreign trade and the development of China-Africa trade The trend of changes in Africa's total foreign trade and the global foreign trade trend are basically synchronized, but the trend of Africa's foreign trade growth being slightly weaker than the global average has not changed.
Data show that in 2017, there was a significant contraction in global capital flows, and the sharp adjustment of US fiscal and financial policies led to structural changes in global capital flows. African countries are deeply impacted and influenced by changes in global capital flows due to their overall low position in the global industrial chain.
In 2017, foreign direct investment (foreign investment) inflows to African countries were 41.77 billion billion US dollars, accounting for 6.2 per cent of the total inflows to developing countries, the lowest since the outbreak of the global economic crisis in 2008, with a year-on-year decline of 21.5 per cent. This suggests a decline in the interest of foreign capital in Africa as it increases inflows to developing countries.
In terms of the regional distribution of foreign capital inflows, 54 African countries show significant differences in foreign capital flows. Among them, North Africa is mainly geographically related to Europe, with a strong ability to utilize foreign investment, but the proportion has declined; West Africa has a high level of economic integration and a weak ability to attract foreign investment, but the country distribution is relatively even; a few countries in Central Africa and East Africa have outstanding performance in attracting foreign investment, of which Ethiopia has become a hot spot in East Africa; while southern African countries have become depressions for foreign investment inflows from African countries, it accounts for only 9.2 per cent of total foreign inflows to African countries.
At the same time, African countries have accelerated the process of regional integration, established the "African Continental Free Trade Area (African Continental Free Trade Area)", and promoted the construction of the African Single African Air Transport Market (Single Air Market), which is for the free flow of various factor resources. The creation of good conditions is conducive to attracting more foreign investment on the African continent.
It is understood that with the overall foreign capital inflow in Africa falling 1/5, Chinese enterprises' investment in Africa is growing against the trend. In 2017, Chinese companies invested US $4.1 billion billion in Africa, an increase of 70.8 percent over the same period last year, accounting for 2.6 percent of China's foreign direct investment flows that year, mainly to Angola, Kenya, Congo (DRC), South Africa, Zambia, Guinea, Congo (Brazzaville), Sudan, Ethiopia, Nigeria and Tanzania.
In terms of investment stock, as of the end of 2017, the stock of Chinese companies' investment in Africa was 43.3 billion billion U.S. dollars, accounting for 2.4 percent of the stock of Chinese companies' outbound investment. According to the distribution of investment industries, construction, mining, finance, manufacturing, and leasing and business services ranked among the top five Chinese investments in Africa, totaling US $36.74 billion billion, accounting for 84.8 per cent of the total investment stock at the end of the year. On the whole, the concentration of Chinese enterprises' investment in non-investment industries has increased slightly and the industry structure has been adjusted. China-Africa manufacturing cooperation has been further strengthened, and financial industry investment has grown faster.
The 2018 Beijing Summit of the Forum on China-Africa Cooperation was held and the "Eight Major Actions" were adopted, providing new momentum for future China-Africa investment cooperation. To this end, China's investment cooperation with Africa can focus on the following aspects: first, grasp the changes in the situation and actively participate in the transformation and upgrading of the African economy; second, promote the flow of factors and effectively explore the construction of free trade networks; third, implement the "eight actions" to build a closer China-Africa community with a shared future; fourth, improve the investment environment and strengthen intellectual property protection; fifth, explore tripartite cooperation to achieve mutual benefit and win-win results.
Reprinted from China Mining News Network
