Two new funds to boost trade with Africa

Chinese technicians and African workers at an expressway construction site in Nairobi, Kenya. China has established two funds to finance Chinese enterprises investing in Africa. ZHAO YINGQUAN / XINHUA

New initiatives to lift investment in the continent

The China-Africa Business Council and the China-Africa Development Fund have decided to set up two new funds this year boost China's investment in Africa. One fund is for commercial ventures, and the other, for mining activities.

Offices for the funds will be established in Beijing this month.

"China has been looking to invest in different ways in Africa, instead of focusing only on building infrastructure projects such as roads, bridges, ports and stadiums throughout the continent," said Zheng Yuewen, chairman of CABC, which represents the interests of more than 550 Chinese companies in Africa.

The changing global investment environment and the lingering debt crisis in the eurozone have prompted major economies such as the United States, the United Kingdom, France, India and Japan to shift their investment focus from traditional markets in Europe and Asia, to Africa.

Additionally, Africa's hunger for urbanization, commodities, jobs, new overseas markets, and improved manufacturing, trade, services and resource sectors, has presented unprecedented business opportunities to foreign investors.

"African countries have good opportunities to capitalize on high international commodity prices, their young energetic labor forces and abundant resources," Zheng said.

"They also have the opportunity of taking advantage of the global investment trend to seek solutions to poor levels of infrastructure, the high unemployment and poverty by accelerating transformation through commodity-based industrialization.

"The continent can go through the same industrial transformation as China did three decades ago, and in time it will become a major goods producer, rather than just being a shipper of raw materials to different foreign destinations," Zheng said.

He said that during this long-term transition, more Chinese companies will move their factories to Africa to help the continent upgrade its technological ability.

The two new funds will provide capital to Chinese enterprises seeking investment opportunities in Africa, particularly in the mining sectors, commercial and trade investment.

To further strengthen cooperation with Africa, the Chinese government has consistently encouraged capable State-owned and private companies to invest there.

It has also supported the African Development Bank and the West African Development Bank by injecting funds, canceling debts, and establishing joint funds for a number of manufacturing and construction projects.