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Economy

China, Germany eye greater collaboration in Africa(2)

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2017-08-02 10:36Global Times Editor: Li Yan ECNS App Download

It is widely believed that the collaboration between China and Germany is a powerful combination that can give full play to their respective advantages - China's rich experience of investing in African infrastructure and Germany's high-level industrial technology.

"Two of the biggest requirements for successful investments in Africa are the security of law and a capable infrastructure on land and water. Hence, technology and infrastructure are the key areas for collaboration [between China and Germany in a third market]," Joachim Pfeiffer, Member of Parliament and the economic and energy policy spokesperson for Germany's ruling CDU party, wrote in an e-mail to the Global Times.

Dong Bin, chairman of committee of the Sino-European Entrepreneurs Summit, believes that Germany prefers to collaborate with China compared to other countries, because there is a strong complementarity between the two countries as they have different levels of technological and industrial development.

"When it comes to collaboration in investment and business, complementarity is a very important factor. Compared with other influential players in Africa such as European countries and the U.S., apparently China has a higher level of complementarity with Germany," Dong told the Global Times.

To Tsamenyi, it is important that big powers do not see themselves as competitors when it comes to dealing with developing economies like those in Africa.

"For Germany and China, such cooperation will be beneficial to both countries as they can leverage on their individual comparative advantage," he said. "Overall, developing economies [in Africa] will benefit more from such cooperation than dealing with individual countries separately."

Land of opportunity

Hai began her investment in Africa in 2011, when she opened a shoe factory in Ethiopian capital Addis Ababa. She hired thousands of local workers; and within six months, her factory's export volume to Europe and North America doubled.

Hai believes Africa has ushered in the golden period of development and will become the next manufacturing hub for the global market.

"As China gradually turns from labor-intensive to capital-intensive economy, it will create a surplus of 85 million jobs. The volume of the vacant jobs is too big to be digested by small labor markets like Southeast Asia, while Africa, with its huge working age population, is an ideal place to take over those jobs," said Hai, who established the largest shoe manufacturing plant in sub-Saharan Africa and set up a garment export factory in Rwanda in record time.

"It is also a golden opportunity for a developed country like Germany and a growing economy like China to join the trend and reshape the international industry chain," she told the Global Times.

Tsamenyi believes Germany's approach in Africa is significantly different from that of China, and Germany should adjust its African strategy, from seeing it as a continent that needs aid to a continent that needs investment to promote private sector development.

"German companies can partner with Chinese companies to target strategic sectors of the African economy for investment. German companies can benefit from this approach in terms of access to the African market," he said.

"From my observation, Chinese companies are not afraid of investing in any part of Africa and German companies have to realize this as well to take advantage of the opportunities on the continent. After all, Africa has some of the fastest growing economies in the world and German companies do not have presence in some of these economies."

B&R initiative

China's Belt and Road initiative is widely seen as a good platform to improve the infrastructure of Africa and thus promote the overall development of the continent.

Germany was among the first countries to publicly support the initiative, and join the China-initiated Asian Infrastructure Investment Bank (AIIB).

"This initiative could be an important step toward strengthening and shaping globalization. A good and capable infrastructure between Asia, Africa and Europe is a win-win situation for everyone and is certainly a big help to enable business potential for Sino-German collaborations,"Pfeiffer told the Global Times.

When it was announced, the initiative raised concerns due to the possible lack of guarantees on transparency, sustainability and tendering process, but China's resolution to promote the program has gradually earned it the trust and support from around the world. Recently, the AIIB won the top-notch credit ratings from Moody's and Fitch Ratings, both among the world's top three credit rating institutions.

"It is important to note that while the Western countries, especially the U.S., has generally shunned away from endorsing the Belt and Road initiative, Germany has backed China's bid to lead this global infrastructure revolution. This open display of support for China by Germany in the face of obvious dissatisfaction by other Western nations surely has diplomatic implications in deepening the bilateral cooperation between the two countries,"said Tsamenyi.

"As such this improved relationship will culminate in further commitment and collaboration on achieving the objectives of the Sino-German cooperation in Africa."

  

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