Investment: The Most Sustainable

Model for China-Africa Cooperation

– An Interview with Chi Jianxin, President of the China-Africa Development Fund

By staff reporter LU RUCAI

Setting up the China-Africa Development Fund (CAD Fund), the aim of which is to support Chinese enterprises’ investment in Africa and exploration of the African market, was among the eight measures to advance practical China-Africa cooperation that President Hu Jintao raised in November 2006 at the Beijing Summit of the Forum on China-Africa Cooperation (FOCAC).

President of the CAD Fund Chi Jianxin outlined the workings of the CAD Fund since its foundation in an exclusive interview with China Today last July during the Fifth Ministerial Conference in Beijing of the Forum on China-Africa Cooperation.

Chi Jianxin, president of the China-Africa Development Fund, on a visit to a sisal hemp plantation in Tanzania in 2009.

Achievements

China Today: What role has the CAD Fund played in promoting China’s investment in Africa over the five years since its founding?

Chi: Five years of practice have made the CAD Fund an important platform of support for Chinese enterprises investing in Africa and for deepening Sino-African cooperation.

The CAD Fund has so far committed to investing more than US $2 billion in over 60 projects in 30 African countries, in areas ranging from agriculture, infrastructure, manufacturing, and building economic and trade zones for mineral exploitation. Initial statistics show that upon coming into effect these projects will take the total amount of investment in Africa by Chinese enterprises to more than US $10 billion, increasing the annual value of Africa’s exports by US $2 billion and its tax revenues by around US $1 billion. The projects should also create in excess of 700,000 jobs in Africa.

The CAD Fund has set up four offices respectively in South Africa, Ethiopia, Zambia and Ghana, covering the area south of the Sahara Desert. Local governments in Zambia and Ghana have accredited these offices as international organizations.

After years of practice, the CAD Fund is now well versed in supporting, guiding and expanding Chinese investment in Africa. Chinese enterprises, along with African governments and civil society, have all expressed their appreciation of our efforts.

China Today: Could you please list some of the projects that the CAD Fund has supported so far? Have their operations lived up to expectations?

Chi: The CAD Fund focuses on supporting the expansion of agriculture, manufacturing, infrastructure, economic and trade zones, and resource exploitation. Its aim is to accelerate local economic development. Our efforts have helped to increase employment and tax revenues and to improve African countries’ balance of international payments.

The CAD Fund teams up with domestic enterprises with the common purpose of investing in various projects in Africa. Those that have been constructed and put into operation play a significant role in promoting local socio-economic development and improving local residents’ living standards.

Cotton growing and processing in countries such as Malawi, Mozambique and Zambia – joint investments by the CAD Fund and certain Chinese enterprises – constitute one of the biggest Sino-African agricultural projects. It acts as a bridge between Chinese enterprises and African farmers, whereby the former provide the latter with seed, fertilizers, pesticide and technical guidance. The project also includes setting up cotton ginning mills and cottonseed oil mills to produce processed products, which will promote local exports, earn foreign exchange and thus benefit the 600,000 or so farmers in the three countries.

A power plant in Ghana – a joint venture between the CAD Fund and Shenzhen Energy Group Co., Ltd. – has been in commercial operation since October of 2010. The project has a 200,000-kilowatt generating capacity, making up one sixth of the local installed capacity, and has helped to reduce local power shortages. Both the former and present presidents of Ghana have highly commended the project.

A leather-processing factory constructed near Addis Ababa, capital of Ethiopia, began production on November 24 of 2010. It now has an annual capacity of 4.5 million finished leather items. The factory employs 500 workers and has also bolstered the income of 50,000 livestock farmers. Every year, the factory earns more than US $20 million through leather exports, thereby encouraging local farmers to raise livestock and promoting an upgrade in the local leather processing industry.

The Suez Economic and Trade Cooperation Zone is a joint venture between the CAD Fund and the Tianjin Teda Group Company Ltd. So far, 30 or more enterprises have entered the zone and created around 1,000 jobs for local residents.