Watch VideoPlay Video
Chinese investment in Africa has grown rapidly over the past decade. Commercial ties between the two regions have exploded since 2000, surging from 10 billion US dollars to over 100 billion in just ten years. CCTV reporter Xie SiSi talked to some Chinese investors who have expanded their business in Africa, to find out what the investment climate is like there.
Chinese company GN FOOD builds processing factories in West Africa
Africa has become a hotspot investment destination for Chinese investors. GN FOOD is a Chinese company and is one of the main suppliers of Chinese tomato paste. The company built its processing factories in the West African country of Ghana last year.
Zhen Xudong, General Manager, GN FOOD, Rich Holding Int'l, said, "We decided to invest in Africa last year. My partner and I invested in Ghana and formed a company named 'GM FOOD'. We chose the city Tema since it's a major shipping port and the second largest city in Ghana. So far our registered capital is about 12 million US dollars."
|Zhen Xudong, General Manager, GN FOOD, Rich Holding Int'l.|
Reasons to choose Africa as overseas investment destination
Zhen explained why he chose Africa as his overseas investment destination.
Zhen Xudong said, "First of all, there are ample resources in Africa. Secondly, Africa is our prime market. And thirdly, the competitiveness and production costs in Africa are relatively lower than in China. Meanwhile Ghana has set new rules to attract Chinese investors. Overall, the investment environment in Africa is getting broader."
Cheng Tao, Ambassador, African Division, M.F.A. of China, said, "The mutual beneficial cooperation between China and Africa started earlier this century. China encourages qualified enterprises to develop in Africa, to help create more jobs, increase tax revenues and bring technology and management skills to Africa."
|Cheng Tao, Ambassador, African Division, M.F.A. of China.|
Achievements of Sino-African trade and cooperation
Indeed, China has boosted employment in Africa and made basic goods more affordable. In 2011, China-Africa trade reached a record high of more than 166 billion US dollars. In the same year, China's direct investment in Africa reached almost 15 billion US dollars.
China has been Africa's largest trading partner since 2009, with more than 2,000 Chinese enterprises currently investing in Africa. Despite the negative impact of the global financial crisis, China-Africa cooperation has shown robust growth.
Not all investments bear fruit in Africa
Zhen Xudong, General Manager, GN FOOD, Rich holding Int'l, said, "Investing in Africa is an opportunity that coexists with risks. There are plenty of opportunities, but Africa isn't heaven in terms of investment, there's high risk too. As far as I know, there are many failed cases too, so the most important thing is to know the risks and knowing economic and political risks are vital. It took us a year to finalize the decision to invest in Ghana because it's relatively stable."
China-Africa cooperation has extended from infrastructure construction to energy, the high-tech industry and financial services.
- Africa seeks expanded cooperation with China in infrastructure, energy, says COMESA chief 2012-07-16
- China ready to strengthen cooperation with Africa: official 2012-07-15
- Closer financial ties sought between China and Africa 2012-07-14
- Interview: Africa seeks more investment from China through FOCAC: Nigerian minister 2012-07-13