Analysis Of Investment Opportunities Of Manufacturing Industry In Ethiopia And Other Four African Countries

Analysis of Ethiopia and other four African countries

With China's "

"The development opportunity of the national strategy, Africa is becoming another fertile land attracting manufacturing investment after Southeast Asia and South Asia.

Recently, the United Nations International

The China Africa Investment Forum on sustainable development was held in Beijing jointly sponsored by the center, the China Council for the promotion of international trade and the China Africa Development Fund.

The forum focuses on two topics: "promoting sustainable investment in Africa's economic growth" and "exploring opportunities for manufacturing and agricultural investment from the perspective of enhancing Africa's exports".

From the governments of China, the United Kingdom, and Ethiopia, Kenya, Mozambique and Zambia, the 4 governments, trade and investment institutions and representatives of the business community are exploring opportunities for sustainable development of China's investment in productive industries in Africa, thereby promoting the export of "made in Africa" and achieving inclusive growth in the African economy.

For textile and apparel industry, what advantages do African countries have in attracting industrial cooperation through attracting foreign investment? What are the problems that China's manufacturing industry should consider in the process of technology and capacity pfer?

Export tariffs are attractive.

On the China Africa Investment Forum for sustainable development, Shi Jiyang, President of the China Africa Development Fund, threw out such a group of figures: Africa has 54 countries and regions, more than half of the cultivable land, 1 billion 100 million people, and young people under 25 years old account for more than half of the total population, and there are 10 million new labor force each year.

Since 2000, Africa's GDP growth has remained above 9.5% for 10 consecutive years.

Africa will be the next pole of world economic growth.

As the first non investment fund in China since its inception in June 2007, the China Africa Development Fund has invested 86 projects in 36 African countries with a total investment of more than 3 billion 400 million US dollars, and at the same time, Chinese enterprises have invested more than 16 billion US dollars in Africa.

Xiong Jiuling, President of Beijing Council of trade promotion, added: "China has been ranking the largest trading partner of Africa for 7 consecutive years.

The existing more than 3100 Chinese enterprises invest in Africa, investing in the amount of US $about 32000000000, providing about 100000 jobs.

The potential market space of African countries has aroused unprecedented investment enthusiasm of Chinese enterprises.

For African countries, because of preferential policies for the two major global export markets of the United States and the EU, this advantage has become the main reason for African countries to attract foreign direct investment.

Julia Spiess, a market analyst at the United Nations International Trade Center, pointed out that in addition to having abundant natural resources and labor resources, all products invested in Africa, if exported to Europe and the United States, are less likely to be subject to tariff and quota restrictions.

Under the framework of the African Growth and Opportunity Act, which is provided by the United States to Africa, 6400 products from 37 countries in Africa can enjoy tariff reduction and exemption for US exports.

In addition, the EU signed an economic partnership agreement with African countries. According to the agreement, 80% of Africa's products can enjoy zero tariffs on exports to the EU.

Specific to the field of textile and clothing investment, Julia Spiess said that agriculture and animal husbandry are the traditional dominant industries in African countries. The spinning enterprises that invest in Africa will make full use of the local high-quality raw materials such as cotton, linen and fur.

For example, she said: "relying on Ethiopia, Zambia cotton planting and Mozambique sisal industry can focus on textile and garment processing; relying on Kenya fur industry can develop bags and shoes manufacturing industry."

As for export preferential policies, according to Zhang Huarong, chairman of Huajian group, a large Chinese investment company in Ethiopia, "Chinese clothing and footwear enterprises can invest in Africa and enjoy different treatment from China's export tariffs."

For example, a shirt from Africa to Europe and the United States is zero tariff, and export from China to Europe is 12% of tariffs, exports to the United States is a 19% tariff.

Zhang Huarong also praised the efforts of the local government.

He said: "when arriving in Ethiopia, it takes an average of 5 months to pport containers from China to Ethiopia, and now it will arrive in 1 months. The pport cost will be 6%, and now it will be reduced to 4.2%.

It takes only 25 days to pport containers from China to the capital of Addisababa, and the pportation cost is only 2.1%.

In order to achieve Ethiopia's goal of becoming an African manufacturing center in 2025, the local government has made great efforts to provide an excellent business environment for enterprises.

The labour market is stable and abundant.

For Chinese investors, the most concern of "entering Africa" is generally concentrated in the political environment, social order, basic matching, quality of life, labor quality, legal standardization and so on in African countries, as well as a series of restrictions on African countries' protection of local resources and natural environment.

At present, many reasons have prompted Africa to label war, disease and hunger. Africa still has more than 20 countries in the ranks of the world's least developed countries.

However, the gap between the rich and the poor in African countries is quite different.

Relatively speaking, Ethiopia, Kenya, Mozambique and Zambia are relatively politically stable countries in Africa.

According to the global happiness index released by a United Nations and a university in the United States, Zambia ranks among the highest in Africa's happiness index.

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Zhang Huarong told reporters: "spinning enterprises to invest in Africa need not worry about the loss of people and property caused by social unrest. We have strong Chinese government behind us to support and protect it.

At first, Huajian invested in Ethiopia, and the Guangdong provincial government was the main driver.

In 2011, former Prime Minister of Ethiopia Meles visited Guangdong and met with the provincial leaders. He especially mentioned that Ethiopia had the advantage of textile and clothing raw materials, and hoped that Chinese textile enterprises would go ahead and invest.

After receiving the notification from the provincial government for the first time, I arrived in Shenzhen and had the opportunity to talk with Prime Minister Meles for more than 40 minutes to reach a cooperation.

In recent years, leaders of both the state and the provincial government visited Ethiopia to visit Huajian and help enterprises solve practical problems.

In cooperation, we actively communicate with local governments about production objectives and implementation of production projects, and take care of each other. "

Tang Xiaoyang, deputy director of the Carnegie global policy center at Tsinghua University, said strong political leadership and effective administrative system are essential for sustainable economic development and full potential development in Africa.

He mentioned in particular that the government of Ethiopia has strong decision-making power in economic development, giving powerful help to the landing enterprises.

In addition, according to Zhang Huarong, "the price advantage of local labor is obvious.

The average monthly salary of our employees in Jiangxi headquarters is 4000 yuan, while the local employees in Ethiopia are 500 yuan.

In addition, there are 600 million young and middle-aged labor force in Africa. In comparison with the difficulty of recruiting domestic workers, we can recruit quite a number of highly educated graduates in Ethiopia, and the attraction of demographic dividend is very attractive.

Zhang Huarong further said: "in January 2012, when Huajian landed in Ethiopia, there were only 500 workers and two middle and top grade brand lines in the United States.

Today, the factory has developed to more than 4000 workers, and the export target of US $18 million in 2015 is expected to reach US $25 million this year.

Our practice has proved that African workers can produce products of high quality and high added value.

In April 2015, Huajian's total investment of 2 billion US dollars light industrial park was put into operation in Ethiopia.

Employee training is crucial.

Textile and clothing belong to the processing and manufacturing industry. Efficient productivity requires a large number of skilled workers, and the quality of the workforce is very important.

Most African countries are in the primary stage of agriculture and animal husbandry for a long time.

"In the first 3 months of the construction, we shipped more than 300 local workers from Ethiopia to Jiangxi and Ganzhou to work with headquarters staff to learn labor skills.

Although the initial investment is large, we have tasted the sweetness.

Through hard work, the productivity of African workers has increased significantly, from the initial equivalent of 65% of Chinese skilled workers to 90%. "

"To invest in Africa, it is better to give fish than to fish."

David Kennedy, director of the Department of economic development of the Ministry of international development, said that since reform and opening up, China's achievements have been obvious to all. Chinese enterprises can help African enterprises to establish health and safety production standards system, improve their survival skills and improve their living conditions through their own development experience.

As a result, it is not empty talk for Chinese enterprises to achieve sustainable development in Africa.

Alanchard Gonzalez, executive director of the United Nations International Trade Center, said that the proportion of small and medium-sized enterprises in Africa accounted for 95%, which required a large amount of capital, technology and talent support, which is very promising for Chinese enterprises.

The construction of industrial parks is a convenient means for Chinese enterprises to go out and help African countries improve their industrial chains and infrastructure facilities.

Although the initial investment is large, this is indeed the best way to reduce investment risks and adapt to local resource development requirements.

Huajian light industrial park is a comprehensive commercial real estate with a sound sewage treatment and energy saving power grid system. The goal of the park is to solve 30 thousand to 50 thousand of the population's employment and earn 200 thousand dollars in foreign exchange earnings.

Through the development of textile and garment manufacturing industry, the high concentration of different formats of industrial parks brings about local economic development. This behavior is not speculative.

Zhang Huarong told reporters.

David Kennedy said: "according to the assessment, more than 30 countries in Africa can accept international pfer of production capacity.

The pfer of capacity can not only help Africa get rid of the low productivity industry, but also drive it towards industrialization and commercialization.

In addition, Tang Xiaoyang also pointed out to reporters: "in the past, even in Africa, even infrastructure construction was not supported by industry and commerce, such as the Tanzania Zambia railway, because there was no way to maintain it without logistics and pportation, and now through industrial investment cooperation, it can strengthen its industrial matching system."