China Exclusive: Industrial cooperation to feature China-Africa ties

China and Africa face "historic opportunities" as the Chinese market for basic industrial materials is saturated while less-developed African countries are crying out for them, according to a foreign ministry official.

Cooperation in what the Chinese government refers to as "industrial production capacity" will not only help China's economic development, but also meet African countries' demand at this relatively early stage of their industrialization, Lin Songtian, head of the foreign ministry's department of African affairs, told Xinhua.

Industrial production capacity cooperation mainly refers to moving production lines from a country to another one or setting up factories, industrial parks with local partners, mainly employing local people.

In the past year or so, Chinese leaders have, on many occasions, raised the concept when meeting with leaders of other developing countries, saying China's extra industrial capacity with low cost can meet the demand of countries in the middle of industrializing process.

After more than three decades of reform and opening up, China's capacity to produce these fundamentals such as iron an steel, cement and plate glass, is huge. However, most African countries cannot manufacture them themselves and rely heavily on imports, according to Lin.

"While we need to divert these products from the domestic market and expand the overseas market, African countries are eager to import them so as to speed up their industrialization," he said.

African countries are rich in natural resources, while China boasts capital, machinery, technology and managerial experience in manufacturing these industrial products, thus creating a "golden opportunity".

That hasn't stopped some from questioning China's motives in this area since Foreign Minister Wang Yi said in March that promoting industrial capacity cooperation is the top priority for China-Africa work in 2015.

Lin responded to such concerns by stressing that industrial capacity cooperation should not be interpreted as shifting China's outdated, polluting overcapacity abroad.

"The cooperation will never be conducted at cost to the natural environment and long-term interests of Africa," he said. "It is rather something mutually beneficial, and a real integration of China and Africa's developmental demand."

While the demand and political willingness is there, Lin warned, however, that China and Africa are "not completely prepared" for the cooperation.

Many African nations must improve their laws and administrative efficiency to make foreign investors feel "secure, happy and comfortable," he said.

According to the diplomat who used to serve as China's ambassador in Liberia and Malawi, another big obstacle for investors is the weak infrastructure, including a fragile power generation sector and poor transport systems, in many African countries.

Lin said, this problem can be solved and many Chinese companies would be happy to give a hand in building those basic infrastructure.

On the other hand, Chinese investors in Africa, mostly private firms, are also faced with bottlenecks, such as lack of financing and experienced staff, Lin added.

Industrial capacity cooperation will not only prosper between China and Africa and is set to feature China's economic cooperation with other developing countries.

On March 27, Chinese Premier Li Keqiang and Kazakhstan Prime Minister Karim Masimov witnessed the signing of 23.6-billion-USD deals in industrial capacity cooperation in Beijing, involving iron and steel, nonferrous metals, plate glass, refinery, hydropower and automobiles.

In Chinese manufacturing sector, the amount of industrial fundamentals like iron and steel exceeds domestic demand by nearly 28 percent, while 35.5 percent of manufacturers have seen less than 75 percent of their capacity fully utilized, latest data from the Ministry of Commerce showed.

The central government has vowed to help companies seeking to transfer their spare industrial capacity abroad by increasing financial support, cutting red tape, broadening funding channels and coming up with more favorable policies. Endi