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Speech by Ambassador LIN Songtian, Director-General of African Department of MFA at African Session of Forum on Global Production Capacity and Business Cooperation
2016/06/16

Distinguished Vice Governor XU Kezhen,

Distinguished African Envoys,

Distinguished Ministers, Guests, Representatives of Chinese and African Enterprises,

It is a great pleasure for me to attend the African Session of Forum on Global Production Capacity and Business Cooperation in Wuhan. First of all, I would like to extend my warm congratulations to the successful opening of the forum.

Africa is the important direction of China's international cooperation on production capacity. Hubei province holds the African Session to sets up a special platform for promoting China-Africa production cooperation, which is at the right time and of significance. I would like to make a briefing on opportunities and challenges Africa is facing and the new concept, thinking and measures of China's Policy to Africa.

I. Opportunities and Challenges Facing Africa

The average annual economic growth rate of Africa has been above 5 % since the beginning of this century, thus making Africa one of the fastest growing region in the world. Despite the weak global economic recovery, Ethiopia, Kenya and some other African countries still maintain a momentum of rapid development.

Africa is now facing a rare historic opportunity for development. Objectively, Africa enjoys the advantages of abundant natural resources and population dividend which are in urgent need to be developed and utilized. The population of Africa has exceeded 1.1 billion and is expected to reach 2.5 billion by 2050. The youth population is over 50%, even 75% in some countries. Africa is becoming the new consumer market with rapid urbanization process, fast growing number of middle class and its great market potential. Subjectively, almost all African countries highly expect to accelerate the process of industrialization and economic diversification and pursuing self-reliant and sustainable development. African Union's Agenda 2063 mapped out a new blueprint for the next 50 years' development of Africa. Most African countries have made strategic development plan for the next 5 or 10 years.

From the perspective of international environment, the fourth industrial revolution is being promoted quickly. The world economy is facing a new round of structural adjustment and industrial relocation, which provides Africa with a historic opportunity for its transformation of economic development. The "Four Asian Tigers" and China all seized the historic opportunity of structural adjustment of world economy and industrial relocation, and actively opened up and created conditions to receive the relocation of foreign industry and production capacity, thus achieved economic take-off. International industry layout is now facing a new round of world economic adjustment. Africa's natural resources, population dividend and market potential are valued by all parties. Africa is likely to become one of the new destinations of international industry and production capacity transfer and become a new growth pole that will drive the world economic development.

At the same time, Africa is also facing many challenges and unfavorable elements. Firstly, the effect of political transformation. Frequent change of ruling parties in some African countries, leading to the problem of lack of stability and consistency of government policies, thus affects the interest of the foreign investment. Secondly, 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 are common problem for African countries. Thirdly, underdevelopment in infrastructure and lack of professional personnel and skilled workers are outstanding problems, including access to water, electricity, telecommunication, railway, roads, ports, and airports, as well as the shortage of skilled personnel and industrial workers. Fourthly, security risks still remain high. Non-traditional security factors such as terrorist attacks, kidnapping, piracy, public security and diseases are obvious. Fifthly, the anemic world economic recovery and falling commodity prices have direct negative impact on the energy and mineral product export of Africa and against the initiative to invest in Africa, thus making severely negative impact on the development momentum of Africa.

II. New concept, new thinking and new measures of China's Policy to Africa

China-Africa relations has maintained strong momentum of development since the beginning of the new century. The Johannesburg Summit of the Forum on China-Africa Cooperation ( FOCAC ) in last December was a great success. It developed a new blueprint for China-Africa cooperation, marked the beginning of a new era for China-Africa win-win cooperation for common development. President Xi Jinping articulated the new concept and thinking of China's Policy to Africa comprehensively and systematically and declared to elevate the China-Africa relations to a comprehensive strategic and cooperative partnership and to implement Ten Cooperation Plans with Africa in the next three years in the following key areas: industrialization, agricultural modernization, infrastructure, financial services, green development, trade and investment facilitation, poverty reduction, public health, cultural and people-to-people exchange, and peace and security. Furthermore, China pledged US$60 billion of funding support for the Ten Cooperation Plans.

The Ten Cooperation Plans fully embody the principles and values of China's Policy to Africa initiated by President Xi,including sincerity, practical results, affinity and good faith, upholding the values of friendship, justice and shared interests. The core elements of the concept is closely combined China's development with assisting the development of Africa, so as to realize win-win cooperation for common development between China and Africa.

The Ten Cooperation Plans are highly consistent with the development goals and priority areas in the Agenda 2063 of African Union. The main idea is, driven by cooperation in industrialization and agricultural modernization, with a focus on industry alignment and production capacity cooperation, to support Africa in its efforts to remove the three bottlenecks impeding development, namely, the backward infrastructure, inadequate professional and skilled personnel, and lack of financial inputs, thus to help Africa develop its industrial system, food security system and public health system for sustainable self-development, address the three issues crucial to people's well-being, i.e. employment, food security and health care, and realize enduring peace and sustainable self-development.

Those who could help Africa overcome the three bottlenecks impeding development, address the three issues crucial to people's well-being, will be regarded as sincere friends and reliable cooperation partners of Africa who sincerely assist Africa in its efforts to realize enduring peace and sustainable self-development. China always holds that to support Africa to realize peace, stability and development is in the common interest of people all over the world, and is also the common responsibility for the international community. China is willing to fully leverage the two major advantages of China-Africa relations, namely, political mutual trust and economic complementarity, making new and greater contribution to realize enduring peace and sustainable self-development, and become the sincere friend and reliable cooperation partner of Africa, and play a leading and model role for international cooperation with Africa.

We will focus on implementing the outcomes of the Johannesburg Summit, giving 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 deliver more benefits to the two peoples.

Firstly, to fully promote transformation and upgrade of China-Africa cooperation based on bilateral cooperation, working in the same direction. China has pledged US$60 billion of funding support for the Ten Cooperation Plans over the next three years, of which US$5 billion is in the form of grant and interest free loans for all African friendly countries aimed at humanitarian assistance and human resources training and capacity building. The arrangement of the remaining US$35 billion loans and US$20 billion funding will be guided by economic and social benefits and sustainable development of the project itself, and support African countries in conducting large-scale infrastructure construction, so as to improve their investment and development environment and support more Chinese enterprises to invest in Africa, thus promoting industrial alignment and capacity cooperation between China and Africa, so as to realize win-win cooperation for common development. That means China-Africa cooperation has been shifted from unilateral assistance to business investment in accordance with market principles.

African countries are diversed in national conditions, culture, level of development and opening to the outside world. There is also a great difference in their minds, laws and regulations, preferential policies and government service for absorbing and protecting foreign investment. Therefore, The Ten Cooperation Plans shall be implemented differently on the bilateral basis, fully respecting the ownership of African countries and people, and adhering to the voluntary principle. Any country who wishes to absorb foreign investment must have sound and complete laws and regulations and fair environment for law enforcement, which may ensure the investors feel safe; must have preferential policies to ensure the investors feel pleased to make profits; must have high efficient and pragmatic "One Stop" government service to make investors feel comfortable. Whoever ready for cooperation and has the cooperation conditions in place will be among the first for Chinese investors to develop such cooperation with. China will never give impression on any African country for cooperation.

Secondly, to comprehensively promote China-Africa production capacity cooperation is on the basis of the new concept of intensive development and starting from pilot countries and pilot projects. The implementation of the outcomes of the Johannesburg Summit and the promotion of China-Africa production capacity cooperation is a new thing for our both sides and have no previous examples to follow. We will take the responsible attitude and kick off pioneering work in some countries, listing Ethiopia, Kenya, Tanzania, and the Republic of Congo as the demonstration and pioneering countries for such cooperation. We will help South Africa in its efforts to become the locomotive in Africa's industrialization. We will take Egypt, Angola, Mozambique, Zambia, Uganda, Rwanda, Togo, Sierra Leone, Guinea, Senegal as our priority partners for production capacity cooperation. We will make good use of the successful development practice to guide capacity cooperation between China and Africa. Meanwhile, We will encourage and support Chinese enterprises to explore mutually beneficial cooperation with all African countries in accordance with market principles.

We stand for the concept of intensive development and will not support the construction of large scale infrastructure which lacks economic and social benefits and self sustainable development, will try our best to avoid new debt risks and fiscal burden for African countries. It's said that if you want to get rich, first build roads. Everyone knows that China contributed for the construction of TANZARA for Africa which has been written into the annals of history of China-African relations. Yet the status quo of TANZARA tells us that if there is no enough freight and passenger flow or effective operation, you can not be rich even you have the road. On the contrary, it may become the financial burden of relevant countries. We will pool resources to build demonstration zones, and combine the construction of large infrastructure projects such as water, electricity, railway, roads, and ports with the development of industrial parks and special economic zones, so as to achieve sound interaction and mutual benefit between large-scale infrastructure projects and industrial development. For example, we will support Ethiopia in developing an economic corridor along the railway of Addis Ababa to Djibouti, and support Kenya to develop a new layout of three-in-one China-Kenya production capacity cooperation in building major projects of Mombassa-Nairobi railway line, Mombassa port, free trade zone and special economic zones.

Thirdly, to develop China-Africa production capacity cooperation in a safe, orderly and efficient way. Peace and security is the precondition of cooperation and development. Order and efficiency are so important to ensure the sustainable cooperation between the two sides. We will adhere to the principle of safe development, positively support African countries in their efforts to create the safe development environment and safeguard the security and legal rights of Chinese enterprises and people. We will follow the principle of "government guidance, businesses being the major actors, market operation and win-win cooperation", strengthen the internal and external coordination so as to prevent disorderly and vicious competition. We will stand for economic and social benefits of the projects themselves, focus on the their self-sustainable development, and try our best to avoid inefficient loans and investment. We will pursue green development, and not undertake the old colonial path of looting and robbery, and will never pursue cooperation and development at the cost of long-term interests of African countries or damage the local eco-environment.

Thank you!

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