The China-proposed Belt and Road (B&R) Initiative is playing an increasingly vital role in improving the economic growth of Africa through rising investment in sectors like infrastructure, agriculture and energy, economists at Standard Chartered Bank said Friday.
"China's engineering procurement and construction (EPC) work in Africa was on the rise before the B&R Initiative was launched [in 2013], but EPC work in East Africa has since taken off," Razia Khan, chief economist for Africa and the Middle East of Standard Chartered Bank, told a briefing in Beijing.
China is Sub-Saharan Africa (SSA)'s second-largest trading partner, with $97 billion bilateral trade in 2017, according to Khan.
"We expect a continued rebound in China-SSA trade in 2018 given higher commodity prices and a modest demand recovery in a number of SSA economies," Khan said.
With closer regional cooperation in trade, there is increasing demand in the African market for China's capital and services, Standard Chartered said.
Africa has been a recipient of China's trade and investment, and the B&R Initiative has brought closer ties between China and African countries, Saif Malik, regional co-head of Global Banking Africa & Middle East, said at the same meeting.
Infrastructure investment in African markets is one of the focuses of the B&R Initiative, which fits local needs, Malik noted.
The Initiative will not only help drive the infrastructure development in Africa, but also support sectors, including agriculture, renewable energy and industry, according to information released by Standard Chartered.
Industrial capacity cooperation is a significant part of ties between Chinese and African companies along the B&R Initiative routes.
For instance, the number of industrial parks that China has set up or is planning to establish in Africa was about 100, and 40 of them have started operating, China's Ministry of Commerce said in January.
Malik said that due to the diversity of the African market, Chinese firms are likely to encounter many challenges when doing business there.
Global financial institutions that have deep knowledge of the local markets could provide advice from a geopolitical angle to help Chinese firms avoid potential risks, he said.
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