Chinese tycoon eyes huge potential for mainland companies in Africa
Continent need Beijing to boost industrialisation while mainland companies could develop their resources, Zong Qinghou of the Wahaha Group says
Beijing’s go-Africa campaign has hit a chord with Zong Qinghou, one of the mainland’s richest people. The chairman of beverage maker Hangzhou Wahaha Group yesterday unveiled a plan to make a foray into Angola along with a variety of private businesses.
Zong, 44, the 11th-richest mainlander on Forbes’ China rich list, told a panel discussion during the National People’s Congress the continent’s vast land and rich mining resources, coupled with the Chinese government’s support for businesses to expand abroad had lured him to Africa. “I’ve met the Angolan president and several ministers and they cordially invited Zhejiang companies to invest there,” Zong said. “It’s time to look at the continent because they need us to boost their industrialisation and we could get their resources.”
Foreign minister Wang Yi who also participated in the panel discussion, agreed and pledged to support private businesses in tapping tap the African market.
“It helps China to reduce our excessive capacity on the domestic market by investing in Africa,” Wang said, adding that Zong’s proposal to invest in Africa was in alinement with the central government’s macroeconomic policies.
READ MORE: Beijing’s pivot towards Africa
Beijing would shift focus from boosting Sino-African trade to strengthening direct investment in the continent, part of efforts to use loans and investment in exchange for resources, the foreign minister said.
Zong told the South China Morning Post after the panel discussion that Wahaha would lead a consortium of Chinese private companies to invest in Africa.
“We must understand that they need our help in every aspect of economic development,” he said. “My plan is to form a big group of private businesses to offer the countries whatever help they need from us in their industrialisation process.”
He said natural gas reserves, copper and diamond mines and arable land in Angola were attractive to Chinese businesses.
READ MORE: China’s model for sustainable investment in Africa
In November, China signed dozens of deals with Africa before a China-Africa summit in Johannesburg, which was attended by President Xi Jinping.
State-owned companies such as Sinosteel and Sinochem are major Chinese investors in Africa while privately businesses are battered by worries of business risks and uncertain political situations.
Beijing is striving to “export” redundant manufacturing capacity as a way to transform its domestic economy into a sustainable growth pattern.
The foreign minister said Beijing would double efforts to protect Chinese companies doing businesses abroad, including deploying more diplomats at embassies or consulates.
China has been Africa’s largest trading partner for the past six years.
The mainland’s investment in the continent recorded a more than 30 per cent annualised growth in the past 15 years, hitting US$432.4 billion in 2014.
