Africa remains an important and strategic investment destination for the approximately 2,000 Chinese companies operating on the continent even as the Asian economic powerhouse shows signs of an economic slowdown.
“When Chinese firms consider investment destinations around the world, Africa is always top of mind,” said Dr George Fang, Standard Bank’s Beijing-based Head of Mining and Metals in Asia.
“Africa is usually among the first destinations that are considered by Chinese companies that are looking to expand internationally, not only because of its abundant natural resources but also because of its rich cultural heritage, which in many ways is more similar to Chinese custom than that of the Western world.”
China is still unquestionably Africa’s largest single trading partner, with Standard Bank research estimating Sino-African trade to have reached USD210bn in 2013, up 6% from the USD198bn figure that prevailed in 2012.
Chinese imports from Africa, which largely comprise hard commodities, reached approximately USD115bn last year while Chinese exports to Africa totalled about USD94bn, according to Standard Bank data.
Despite China’s official Purchasing Managers’ Index (PMI) slipping to a six-month low of 50.5 in January, Standard Bank still expects the Chinese economy to expand by 7% in 2014.
That follows economic growth of 7.7% in in each of the preceding two years.
Dr Fang says that this slowdown is partly due to China’s government placing greater emphasis on more sustainable economic expansion, rather than simply chasing growth for its own sake.
Although the global economy has undergone a fundamental paradigm shift since the 2008 financial crisis, Africa remains an important strategic partner for China going forward, he argues.