Interview: China-Africa cooperation holds vast potential for mutual benefit, says economist
BEIJING, Sept. 6 (Xinhua) -- Cooperation between China and African countries harbors huge potential and is mutually beneficial, resulting in win-win outcomes, said Justin Yifu Lin, dean of the Institute of New Structural Economics at Peking University.
In a recent interview with Outlook Weekly, a news magazine run by Xinhua, Lin stressed the importance of advancing the cooperation, urging all parties involved to seize the new opportunities.
WIN-WIN COOPERATION
Lin pointed out that China has been providing professional and cost-efficient services for projects in Africa. Official statistics showed that since 2013, China has been involved in the construction of over 6,000 kilometers of railways, over 6,000 kilometers of roads, and more than 80 large-scale power facilities across the continent.
By the end of 2023, China's direct investment stock in Africa had surpassed 40 billion U.S. dollars, making it one of Africa's major sources of foreign investment. Moreover, Chinese companies have created more than 1.1 million jobs in Africa over the past three years.
Chinese firms have invested in and developed economic and trade cooperation zones in Africa, covering industries such as agriculture, processing and manufacturing, trade and logistics. "This has significantly boosted Africa's tax revenues and foreign exchange earnings from exports," Lin said.
Lin further elaborated on Chinese enterprises' growing engagement in emerging sectors such as technology and e-commerce in Africa, expanding beyond traditional industries like manufacturing and construction.
"As the development of the African Continental Free Trade Area accelerates, Chinese companies in Africa will add new vitality to the high-quality cooperation between the two sides," he added.
Highlighting the role of financing in driving Africa's development, Lin cited a study by the Institute of New Structural Economics as saying that Chinese loans have enhanced the level of economic development in Africa while improving debt sustainability.
Having focused on new structural economics, a theory that highlights comparative advantages in a nation's development, Lin has in recent years pushed for exchanges between his team and think tanks in a number of African countries, helping them identify industries with comparative advantages and offering policy recommendations to improve the local business environment.
One success story Lin recounted was in Ethiopia. He advised the country to capitalize on its labor and leather resources to develop the shoe-making industry. This recommendation was embraced, and Huajian Group, a Chinese company, established a factory there.
The factory has created over 8,000 jobs for local residents and generated more than 200 million U.S. dollars in revenue for Ethiopia, Lin said.
NEW OPPORTUNITIES AHEAD
Regarding the future of China-Africa cooperation, Lin saw emerging opportunities in the field of renewable energy.
As the living standards of its large population continue to rise, Africa will surely see an increase in energy consumption. In this context, cooperation in developing renewable energy will not only accelerate green energy transition to meet Africa's growing energy demand, but also help the continent better cope with climate change, Lin said.
Chinese companies should expand their investment in Africa in areas such as solar and wind power, energy conservation technologies, as well as in green and low-carbon sectors, he added.
In terms of China-Africa cooperation under the Belt and Road Initiative, Lin called for continuous efforts in enhancing environmental, social, and governance (ESG) risk management, and strengthening the alignment and mutual recognition of rules and standards.
He, however, noted that China-Africa cooperation also faces challenges, and that weaknesses in economic foundation, infrastructure and business environment in some African countries need to be addressed to draw more investment. Moreover, efforts are needed to balance economic growth and ecological conservation in Africa.
Lin suggested that both China and African countries better manage investment risks, ensure the sustainability of investment projects, and encourage the participation of investors from other countries around the world as well as from international financial institutions.
