Two new funds to boost trade with Africa

China-Africa trade stood at nearly $200 billion last year, while Chinese investment in Africa has reached $17 billion, according to the department of African affairs at China's Ministry of Foreign Affairs.

In December of 2012, CABC surveyed the 198 member companies which had established a presence in 32 countries across Africa. With 34,000 local employees and 6,400 Chinese workers, the companies had trade relations with 51 African countries and $2.4 billion in sales revenue last year, representing about 16 percent of their total business revenues.

The 198 companies, including Chongqing-based automobile producer Lifan Group, Guangdong-based shoemaker Huajian Group and power supplier Shenzhen Energy Corporation, have so far invested $1.1 billion in the 32 African countries and have plans to invest an additional $5 billion over the next three years.

Around 80 percent of CABC's members are private companies and the rest are State-owned enterprises.

Chi Jianxin, president of the CADFund, said: "In contrast to State-owned enterprises, whose African sales are largely based on huge infrastructure projects, private-sector Chinese companies are more sophisticated in processing local products like cotton and leather into manufactured goods such as garments and shoes."

Chi added that even though logistics costs remain high in Africa, preferential tariffs for African exports to developed markets, low labor costs and favorable investment policies can make up for this.

More than 700,000 people have benefited from the CADFund throughout the continent over the past six years. Its investment now contributes $1 billion in tax revenues to different African governments, and funds the export of some $2 billion worth of goods each year.

The latest China-Africa ventures to be created include a partnership between Chinese cement producer Tangshan Jidong Cement Co Ltd and household appliance manufacturer Hisense Group, who have created a cement plant with 1 million tons of annual production capacity, and a home appliance factory that will be operational in South Africa this month.

Elsewhere, a cotton spinning industrial park in Tanzania and an iron mine that produces 1 million tons per year in Liberia, will be launched in the second half of this year.