Service With a Smile |
Economist sees opportunities for Africa in China's new liberalization policy |
By Lu Anqi | ChinAfrica Web Exclusive |
The liberalization of the service sector in China presents new opportunities for African companies, according to a senior South African economist.
Martyn Davies, the Johannesburg-based Managing Director of Emerging Markets & Africa at Deloitte and Touche, said firms that could benefit include Naspers (media, information technology) and Richemont (luxury goods).
Davies was reacting to an announcement by China's Minister of Commerce Gao Hucheng on the sidelines of China's annual parliamentary session in Beijing, which concluded on March 16.
China will further ease foreign investors' access to service and high-end manufacturing sectors, Gao said on March 13. Sectors like finance, education, culture and logistics will also be opened wider to foreign capital, and restrictions on high-end manufacturing will be relaxed. Foreign investors will be encouraged to participate in innovating and upgrading China's state-owned enterprises.
However, Davies added that it is very challenging for most African economies to invest in China due to their lack of "corporate muscle." Though there are exceptions, notably South Africa, Morocco and Egypt, "by and large, African companies are unable to gain market traction in China," he said.
Commenting on the impact of China's minimum 6.5 percent growth target on Africa's development, he said China's GDP growth figure was a very simplistic indicator to assessthe influence. "One should look at the measures being adopted by Beijing to boost growth through capital investment [such as infrastructure spending]," he added.
Davies pointed out that China's economic restructuring and consumption-driven model will bring significant opportunities for African economies with a sizeable agricultural sector, predominantly in southern and eastern Africa.
"The rising Chinese demand for 'soft commodities' is [also] a very real opportunity," he said. "
But the South African economist is worried that China's "rebalancing" into a services and consumption-driven economy would be negative news for some commodity-driven economies. Many African countries are commodity-driven economies.
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