Address by Director-General Lin Songtian at the 5th Meeting of China-Africa Think Tanks Forum
2016/39/19

Your Excellency Dr. Arkebe Oqubay Metiku, Economic Adviser of the Prime Minister of Ethiopia,

Your Excellency Ambassador Zhong Jianhua, Special Representative of the Chinese Government on African Affairs,

Mr. Liu Hongwu, dean of the Africa Studies Institute of Zhejiang Normal University,

Distinguished guests,

Dear scholars,

Friends,

Good morning.

It gives me great honor to attend the 5th meeting of China-Africa Think Tanks Forum. First, I would like to extend warm congratulations on the convocation of the Forum.

This is the first China-Africa Think Tanks Forum convened after the Johannesburg Summit of the Forum on China-Africa Cooperation (FOCAC). I hope that experts and scholars present here can have in-depth academic exchanges, promote cultural communication, share your insight and wisdom with one another, and contribute your valuable suggestions and proposals, so as to provide theoretical and intellectual support for the implementation of the outcomes of the FOCAC Johannesburg Summit and for better development of China-Africa comprehensive strategic and cooperative partnership.

The theme of the Forum today is "China-Africa Production Capacity Cooperation and Africa's Industrialization", which is in line with the priority of current China-Africa cooperation, and serves the urgent need of China-Africa common development through cooperation, thus being of practical significance. I would like to share with you my thoughts from three aspects focusing on the theme of the Forum for your reference.

I. Main outcomes and significance of the FOCAC Johannesburg

Summit

The year 2015 witnessed a milestone in the history of China-Africa relations – the Summit of the Forum on China-Africa Cooperation being successfully convened in Johannesburg. This was the second FOCAC summit in the history of China-Africa relations, and was also the first time for the China-Africa summit convened in the African continent. At the opening ceremony of the Forum, Chinese President Xi Jinping delivered a keynote speech titled "Open a New Era of China-Africa Win-Win Cooperation and Common Development", articulating the new concept and thinking of China's African policy, and announcing new measures to promoteChina-Africa common development through cooperation. He proposed to upgrade China-Africa relationship into a comprehensive strategic and cooperative partnership featuring political equality and mutual trust, win-win economiccooperation, mutually enriching inter-civilization exchanges, mutual assistance in security, and solidarity and coordination in international affairs, and proposed ten cooperation plans for the following three years including industrialization, agricultural modernization, infrastructure, financial services, green development, trade and investment facilitation, poverty alleviation, public health, people-to-people and cultural exchange, and peace and security, for which China will provide a total of US$60 billion of funding support. In his speech, President Xi not only listed out a comprehensive planning and top-level design for the development of China-Africa relations, but also announced specific cooperation plans and related financing support, which is indeed a combination of theoretical guidance and operational programs, embodying the salient feature and style of China's diplomacy, and winning welcome and commendation of all African countries and the international community.

During his first visit to Africa in 2013 after taking office, President Xi Jinping put forward that in conducting relations with Africa,China adheres to the principles of sincerity, practical results, affinity and good faith and upholds the values of friendship, justice and shared interests. The core of the concept is closely linking China's development with assisting the development of Africa, thus to realize win-win cooperation and common development, to grow China-Africa community of common interests, and to build China-Africa community of shared future. The ten cooperation plans fully embody the principles and values emphasized by President Xi, and are highly consistent with the development goals and priority areas in the Agenda 2063 of the African Union. The main idea is, driven by cooperation in industrialization and agricultural modernization, with a focus on industrial partnership and production capacity cooperation, to support Africa in its effort to remove the address three major bottlenecks impeding development, namely, the backward infrastructure, inadequate professional and skilled personnel, and lack of financial resources, overcome the restraints in China-Africa cooperation, and to build independent and sustainable systems of industrialization, food security, as well as public health and disease prevention and control, so that Africa can achieve enduring peace and sustainable self-development.

Among the ten cooperation plans, cooperation in industrialization and agricultural modernization is the goal; infrastructure construction and development of human resources are the precondition; financial cooperation offers the support; people-to-people and cultural exchange and cooperation in peace and security provides the guarantee. All these aspects complement each other and constitute an integrated whole.

The arrangement of the funding support of US$60 billion also reflects the new ideas of China's commitment to upgrading China-Africa cooperation. Among the US$60 billion, only US$5 billion will be in the form of grant and interest-free loans in the following three years, which will be mainly used to support all friendly African countries in improving public well-being and strengthening capacity building in accordance with the inclusive principle. The arrangement of the remaining US$35 billion loans and US$20 billion funding will be guided by economic and social benefits of projects and sustainable development, and channeled to support African countries in conducting large-scale infrastructure construction, so as to improve their investment and development environment and create enabling conditions for the China-Africa common development through cooperation.

Against the backdrop of weak global economic recovery and sluggishness of major commodity prices in the world market, and when China itself is also facing downward pressure for economic growth, China has not reduced its support and input to Africa. On the contrary, China has worked out a comprehensive planning and provided the largest-scale funding support. It shows China's firm will and determination to promote China-Africa common development through cooperation.

II. Opportunities and challenges for the development of China-Africa

cooperation

In the new century, China-Africa relations have entered a new stage of comprehensive and fast growth. The Johannesburg Summit promoted China-Africa friendly cooperative relations onto a historic new high, and ushered in a new wave of China-Africa common development through cooperation. China-Africa cooperation is unprecedented today in terms of the breadth, depth and intensity, and has become a new bright spot of China's external cooperation. We should seize the opportunities, overcome challenges, and take solid steps to implement the outcomes of the summit to deliver more tangible benefits to the people of China and Africa.

We believe that China-Africa cooperation is facing a rare historic opportunity to synergize the development strategies of the two sides. First, China and Africa enjoy a unique political advantage for our common development through cooperation. China and Africa, living through thick and thin together, have always been in a community of shared future; always developing win-win cooperation, have constituted a community of common interests. We have always treated each other with sincerity, rendered each other support, and never betrayed each other. Our relations have stood the test of vicissitude in the international landscape. Second, China and Africa are highly complementary and enjoy great potential for our common development through cooperation. Africa enjoys the advantages of abundant natural resources, population dividend and great market potential, while China has the comparative development advantages in capital, technology, market, businesses, capable personnel and successful development experience. At present, African countries are all pursuing economic independence and self-reliant and sustainable development, which are in urgent need of foreign investment and technology transfer. China has entered a new stage of development, which needs to transfer a large number of advantageous industries and production capacity overseas. African countries all hope to learn from China's successful development experience and development model so as to improve their governance capability. And China is willing to share its own experience and outcomes of development with African countries without any reservation.Therefore, China and Africa need each other and can draw on each others' strengths in promoting common development through cooperation, and are face a historical opportunity to synergize our respective development strategies.

At the same time, China and Africa are also facing many challenges for promoting common development through cooperation. On the part of China, China has just entered a new stage with "bringing in" (referring to attraction of inbound foreign investment) and "going global" (referring to outbound foreign investment) being on a par with one another. The Chinese government actively encourages and supports Chinese companies to "go global", i.e. to develop overseas investment cooperation, but a lot needs to be done in terms of the top-level design, strategic planning, policy support and financial services, and institutions related to the coordination, management and services for companies to "go global" need to be further improved. Chinese companies have strong interests to invest overseas, but are not highly globalized, as well as lack of overseas operation and management experience and capacity. They are short of related talents, and do not have sufficient knowledge about Africa. There are obvious problems of the companies which are incapable of going global, not courageous enough to go global, and not aware of where to go and how to get there. Most of the Chinese companies in Africa are involved in low-end areas such as general commodity trade, projects contracting, resources and energy development, and dare not participate in operation and management or unwilling to participate in independent investment and operation. There are a small number of Chinese companies in Africa that do not have a strong sense of self discipline or teamwork spirit, focusing just on short-term gains, and do not pay due attention to benefit the local society, with some of companies and individuals even breaking local laws and regulations.

On Africa's part, it is in urgent need of improving soft and hard environments for cooperation with China. First, the ideas and concepts cannot match the wishes for development. Some African countries and some of the general public, due to the history of long-term exploitation and looting by western colonizers, have the complicated sense of love and hate for foreign investment. They are reluctant to open the markets. They like foreign assistance and investment, but are not willing to see investors making money. Second, laws and regulations, preferential policies and government services to promote and protect foreign investment need to be improved. Insufficiency in related laws and policies and inadequate enforcement by the government arecommon problem for African countries. Third, underdevelopment in infrastructure and lack of outstanding personnel are outstanding problems. There is underdevelopment of the infrastructure in general including access to water, electricity, telecommunication, railway, roads, ports and airports or without forming a complete system, as well as the shortage of skilled personnel and industrial workers. Fourth, political transformation has affected the process of industrialization. There is frequent change of ruling parties in some African countries, leading to the problem of lack of stability and consistency of government policies. Some of the policies of the government keep changing, sometimes being done arbitrarily. Some countries introduce environmental protection and labor standard that is not consistent with the reality, where the trade unions and non-governmental organizations are very strong, affecting normal production activities of investors. Fifth, there are also high security risks. Unrest happens from time to time in some parts of Africa. Hot-spot issues keep cropping up. Non-traditional security factors such as terrorist attacks, kidnapping, piracy, public security and diseases are obvious.

Ⅲ. Main considerations over the implementation of the outcomes of

the Johannesburg summit

In comparison, the opportunities for China-Africa common development through cooperation outweigh the challenges. For the next stage, we will focus on implementing the outcomes of the Johannesburg summit, give priority to promoting industrial alignment and capacity cooperation between China and Africa, and promote China-Africa common development through cooperation in a safe, orderly and efficient way, so as to open up new dimensions for business cooperation and people-to-people exchanges between China and Africa, and deliver more benefits to the two peoples. To that end, I want to share with you the following considerations:

First, making the best use of the US$5 billion grant and interest-free loans of China for African countries, and supporting all friendly African countries in improving their capacity for independent development and improving public well-being. Based on the features of individual countries and bilateral relationship, China will put most of the money on Africa's efforts in poverty alleviation, human resources training, and capability to keep peace and maintain stability, and work to enable all friendly African countries to share the benefits.

Second, starting with demonstration countries and projects to lead cooperation with the continent and to steadily promote China-Africa production capacity cooperation and industrial alignment, and working to develop role models among African countries as pioneers in China-Africa production capacity cooperation. African countries differ in the level of productivity, development conditions and business environment. China will kick off pioneering work in some countries, and pool strength and resources to build some countries into role models in China-Africa production capacity cooperation and industrial alignment. In those 'demonstration countries', we will focus on developing cooperation demonstration zones, and use the successful development practice to guide industrial alignment and capacity cooperation between China and Africa.

On the basis of comprehensive research, China has listed Ethiopia, Kenya, Tanzania and the Republic of Congo as the demonstration and pioneering countries for such cooperation. South Africa shall work as the locomotive in Africa's industrialization efforts. Egypt, Angola and Mozambique will be the priority partners for production capacity cooperation.

It needs to be emphasized that for these demonstration countries and priority partners, China will pool resources to build demonstration zones, and combine the construction of large infrastructure projects such as railway, roads and ports with the building on industrial parks and special economic zones, so as to build industrial belts along the routes and achieve sound interaction between large-scale infrastructure projects and industrial development. For example, we will support Ethiopia in building an economic corridor along the railway line of Addis Ababa to Djibouti, and building several industrial parks along the railway line, so as to promote logistics with railway transport, mobilize the development of the industrial parks, which can in turn support sustainable development of the railway line. We are supporting Kenya in building major projects of Mombassa-Nairobi railway line, Mombassa port, free trade zone and special economic zones, and develop a three-in-one China-Kenya production capacity cooperation layout combining railway, ports and special economic zones. Efforts will be made to build an economic corridor and regional logistics hub along the Mombassa-Nairobi railway line. We will also support the Republic of Congo in building a new port and railway at Pointe-Noire port, and promote the building of a harbor industrial park and special economic zone, so as to develop new layout of China-ROC production capacity cooperation. In conclusion, whichever African country is ready and has the cooperation conditions in place will be the among the first for China to develop such cooperation with.

Third, adhering to the principle of win-win cooperation to ensure sustainable development of China-Africa cooperation. China will follow the principle of "guidance of the government, leading role of businesses, market operation and win-win cooperation", focus on the economic and social returns of projects and sustainable development, and ensure that the development of China-Africa production capacity cooperation proceeds in a safe, orderly and efficient way. China will follow the model of intensive development to ensure sound interaction between infrastructure construction and industrial development. China will pursue green development, and must not take the old colonial path of looting and robbery, and must not pursue development at the cost of long-term interests of African countries or damage the environment. China takes the issue of sustainability of debt of African countries very seriously, and will make concessional loans more preferential, and offer loans to African countries in a responsible attitude, and avoid inefficient loaning which might cause new debt risks and fiscal burden for African countries.

Fourth, combing both pioneering projects and widely applicable projects to orderly promote win-win cooperation and common development of China and African countries. By choosing demonstration countries and priority partners in Africa for production capacity cooperation, China does not mean to exclude other African countries. Neither will such an approach affect normal mutually beneficial cooperation between Chinese businesses and other African countries. In doing so, we mainly draw on China's experience of starting with some pilot work and spread the successful practice later, a lesson accumulated through its reform and opening up, and use successful cooperation to build demonstration countries and zones, so as to accumulate experience, play the guiding role, and strengthen development of comprehensive China-Africa cooperation.

Thank you.

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