General

After the English and French versions of the "Report on Chinese Enterprises Investing in Africa (2022) - China-Africa Enterprise Cooperation from the Perspective of Supply Chain" compiled by the China-Africa Civil Chamber of Commerce was released at the end of August, the Chinese version will also be released in the near future. Akinbumi Adesina, President of the African Development Bank, wrote enthusiastically in his opening remarks: "Africa needs high-quality investment. Africa needs environmentally friendly investment. Africa needs to be able to help promote local supply chain development and Investing in improving the skills of young people’s workforce. Africa needs socially responsible investments that empower communities, and this must be a win-win investment partnership. Let’s invest together and prosper together!”

There is no doubt that the investment activities of Chinese companies in Africa have injected development impetus into Africa. The report said that over the past 22 years, the Forum on China-Africa Cooperation has supported China and African countries to expand cooperation in international trade, investment, personnel mobility and other fields. Specifically, compared with 2000, China-Africa trade volume will increase by 20 times in 2021, and China's investment stock in Africa will increase by 100 times. China has been Africa's largest trading partner since 2009. During this period, a large number of infrastructure projects were completed, and the results benefited millions of people. More than 3,800 Chinese enterprises have invested in Africa, and dozens of China-Africa economic and trade cooperation zones and industrial parks have been established. All these achievements have contributed to the construction and cooperation of China-Africa supply chain.

Especially since China proposed the "Belt and Road" initiative, Africa has become an important partner of China in promoting the joint construction of the "Belt and Road". At the Beijing Summit of the Forum on China-Africa Cooperation in 2018, China and African countries reached a consensus on strengthening the "Belt and Road" cooperation. As of April 2022, 52 African countries and the African Union Commission have signed Belt and Road cooperation documents with China.

According to the report, the Forum on China-Africa Cooperation and the Belt and Road Initiative have the potential to help Africa upgrade the five key drivers of supply chain production, inventory, location, transportation and information. The deepening of the "Belt and Road" and African Continental Free Trade Area cooperation between China and African countries will play an important role in promoting the integration of the African continent and promoting Africa's integration into the global supply chain system.

The report points out that supply chains are critical to Africa's development plans, especially the African Union's Agenda 2063. In recent years, the official operation of the African Continental Free Trade Area and the ongoing impact of the COVID-19 pandemic have sparked discussions about the importance of supply chain development across the continent and the role of development partners in strengthening supply chains across Africa. However, even before the COVID-19 outbreak, evidence had shown that supply chains in Africa had already been disrupted due to inadequate infrastructure, security concerns, poor logistics in international trade and trade, over-reliance on foreign imports, numerous regulatory requirements and complex customs procedures. under pressure. In particular, the global supply chain turmoil caused by the current Russia-Ukraine conflict is putting more pressure on Africa's international trade supply chain. At the same time, Africa also offers huge opportunities for companies looking to invest in supply chain development. This is mainly reflected in the rapid population growth in Africa, many potential market opportunities, and abundant natural resources, making the African continent expected to become a fertile ground for the development of manufacturing industries.

"I think that while Africa brings development opportunities to Chinese companies, we should pay more attention to the localization, long-term and integration of Chinese companies' African operations, and focus on Africa's talent training, youth employment, female leadership and green development. We will continue to invest in areas that have sustained demand in Africa, such as healthcare, agricultural processing, logistics and infrastructure, manufacturing, and industrial parks.” Wang Licheng, President of the China-Africa Private Chamber of Commerce and Chairman of the Board of Directors of Holley Group, said in the preface.

The report also makes the following recommendations for upgrading China-Africa supply chains:

First, Chinese stakeholders should expand their participation and increase investment. China's own experience with supply chain transformation and business models designed to address gaps in China's supply chain or in international trade markets are very useful for boosting growth in Africa. In addition, Chinese support has the potential to help Africa break out of long-standing colonial-historical supply chain patterns. To achieve this goal, China and Africa need to develop more specific action plans to guide and effectively track supply chain development.

Second, Chinese partners must develop sustainable local development capabilities and integrate into the sustainable development of African supply chains. Linking more African companies to Chinese-initiated industrial parks and special economic zones is critical, giving these companies access to resources such as Chinese financing, logistics services, technical skills and partnerships. For Chinese companies, it is crucial to cooperate with local African companies to deepen mutual understanding and succeed in the international trade market. There is also huge potential for development and may bring considerable long-term benefits.

Finally, China's official and private financial investment institutions and private investment promotion platforms should play a greater role. The African side expects the China-Africa Development Fund, the China-Africa Production Capacity Cooperation Fund, and the China-Africa Private Investment Promotion Platform to play a greater role in this regard, and their importance cannot be underestimated.