Chinese economic and trade co-operation zones in Africa: facing the challenges
The idea of exporting Chinese special economic zones to Africa was adopted as an official policy within the Forum on China–Africa Cooperation (FOCAC) framework at the third meeting held in Beijing in 2006, when President Hu Jintao formally announced the establishment of three to five Economic and Trade Co-operation Zones (ETCZs) on the continent as one of the targets of FOCAC’s 2007–09 Action Plan.
The current number of Chinese ETCZs in Africa has exceeded the target. At present there are eight Chinese ETCZs approved by China’s Ministry of Commerce on the continent: two in Zambia, two in Nigeria, and one each in Ethiopia, Mauritius, Egypt and Algeria. However, of these, only the ETCZ in Egypt is operational, with the Chambishi (Zambia) one being partially operational. This policy briefing offers an analysis of the reasons for the current state of affairs, and the challenges that these zones are facing.
The recommendations to African host countries include:
- African hosts should integrate these zones into broader industrial policies and development strategies
- based on China’s experience with SEZs, African hosts should enforce policies and regulations to ensure a multiplier effect into the domestic economy
The recommendations to China include:
- ETCZ feasibility studies should be more thoroughly conducted, covering existing infrastructure network, market structure and synergies
- decision-making regarding ETCZs should be more market oriented rather than defined by political considerations
- China would benefit from a more open and inclusive approach that considers not only the host government but also the local stakeholders, from business class to local authorities and communities
- a more efficient and attractive strategy should be developed to attract Chinese and other investors, this could involve more efficient co-ordination with the China–Africa Development Fund and Chinese policy banks