Justin Yifu Lin leads Chinese business delegation to examine Africa’s investment environment
Peking University, Sep. 2, 2014: On 13 July, 2014, Justin Yifu Lin, Honorary Dean of the National School of Development of Peking University, former World Bank senior Vice President and Vice Chairman of the National Federation of Industry and Commerce led entrepreneurs from Hong Kong, Taiwan, Fujian and Zhejiang to Rwanda, Ethiopia and Senegal to examine their respective investment environments as well as to discuss the possibility of China’s labor intensive industries investing in Africa.
The majority of the Chinese delegation was made up of business leaders from textiles, garments and shoemaking. During the trip, the delegation met with various heads of state, visited special economic zones, listened to reports on the investment environment by related, had in-depth discussions on the situation with local Chinese Embassy Economic Counsellors, negotiated partnership possibilities with international buyers and witnessed the signing of investment agreements between two of the delegation members and African governments.
On 15 July, Rwandan President Paul Kagame received the delegation and discussed with Prof. Lin the value of 'New Structural Economics‘ for a developing African economy as well as the challenges and opportunities for Chinese entrepreneurs looking to operate in Rwanda.
Prof. Lin shakes hands with Rwandan President Kagame
President Kagame said that Rwanda is currently undergoing a shift in its economy which requires sustainable development and Rwanda will give its full support to companies with an intention to provide long-term and stable investment. Rwanda is now creating a more attractive investment environment and hopes to create partnerships of mutual benefit with Chinese companies.
Justin Lin with Chinese Entrepreneurs, Rwandan President Kagame and Ambassador Shen Yongxiang
On the 17 July, Professor Lin led the delegation to meet with Ethiopian Prime Minister Hailemariam Desalegn. Desalegn pointed out that his predecessor went to China to attract businesses and invite shoe manufacturer Huajian to invest in Ethiopia on the advice of Prof. Lin. Huajian’s success has created a great example, leading the wave of foreign investors to Ethiopia. The 22 standard factories in Ethiopia’s industrial park were all rented to within three months, helping the country take a big step in its economic development.
Ethiopian Prime Minister with Chinese Delegation
To honor Prof. Lin’s contribution to the Ethiopian economy, Prime Minister Hailemariam Dessalegn awarded Prof. Lin with a commemorative silver medal.
Silver Medal Awarded to Prof.Lin by Ethiopian Prime Minister Dessalegn
On 19 July, Sengalese President Macky Sall and Prime Minister Mohammed Dionne each met with the delegation. President Sall expressed his great expectations for Chinese entrepreneurs investing in Senegal: "We are very happy Chinese businesses are coming here, they have already seen great success in China and other countries, and will help Senegal in its economic recovery plan.”
Prof. Lin Shakes Hands with Senegal President Macky Sall
In 2012, President Sall proposed a new recovery plan to drive economic growth with the aim to make Senegal West Africa’s manufacturing hub and for it to become an emerging economy by 2035. The plan was predicted to require over 10 trillion CFA francs in investment, approx. over USD 20 billion.
Prime Minister Mohammed Dionne Meets with Delegation
During the mission, Prof. Lin also took the delegation to witness the signing of C&H Garment Company’s MOU with the Rwanadan Development Bureau and the signing of Zhejiang Gold Holdings Group’s investment agreement with Ethiopia’s Department of Industry. Prof. Lin pointed out that China’s labor intensive processing industries are now facing pressures from sustained increases in labor costs and developed countries may move business to places with lower production costs. To achieve sustained development, one must seek ways to lower labor costs. Currently Africa’s economic development is low on a global scale and as such is the ideal base for transfer in labor intensive manufacturing and may become the final destination for such transfers. The reasons for organising the mission to Rwanda, Senegal and Ethiopia are the social stability in the three countries, their higher labor quality and good investment environment.
Moving a portion of production to Africa is a conclusive decision, and can utilise the advantages of its labor costs and duty-free exports to developed countries to increase orders and help lay solid foundations for company headquarters in China move up on the value added axis on the smile curve. Moreover, as first movers in the shift, companies and enjoy government support from the highest levels (including from Presidents and Prime Ministers) and attention from international buyers and media, gaining a stronger position compared with late-comers.
Africa is the ideal location for China’s labor intensive companies investing overseas; it gives labor intensive manufacturing a second wind and provides a large enough as well as providing China with a massive opportunity for industrial upgrading and industrial transformation. For labor intensive companies to move to Africa does not only benefit China but also promotes economic development in Africa, improves the standard of living for Africans and gives us the opportunity to contribute to the development of mankind. Chairman Xi Jinping stated: “A single flower does not make a spring, while one hundred flowers in full blossom bring spring to the garden.” Chinese enterprises moving to Africa can help us move towards this beautiful vision.
Edited by: Zhang Jiang
Source: National School of Development