New Chinese funds to launch in Africa and boost investment

The launch of two new African funds is being planned by the China-Africa Business Council (CABC) and the China-Africa Development Fund (CADFund), to boost Chinese investment in Africa.

One fund will be for commercial ventures, and the other for mining activities, with offices for the funds to be established in Beijing this month.

Zheng Yuewen, chairman of CABC, which represents the interests of more than 550 Chinese companies in Africa, said each fund will raise $1b in its initial phase from member companies and the CADFund, China’s largest private equity fund focusing on African investments.

“China has been looking to invest in different ways in Africa, instead of focusing only on building infrastructure projects such as roads, bridges, ports and stadiums throughout the continent,” said Zheng.

Africa is becoming more appealing to international investors with the rise of urbanisation, commodities, jobs, new overseas markets, and improved manufacturing, trade, services and resource sectors, which are creating attractive business opportunities for investors.

“African countries have good opportunities to capitalize on high international commodity prices, their young energetic labour forces and abundant resources,” Zheng said.

“They also have the opportunity of taking advantage of the global investment trend to seek solutions to poor levels of infrastructure, the high unemployment and poverty by accelerating transformation through commodity-based industrialisation.”

He said that during Africa’s long-term industrial transition in the future, more Chinese companies will move their factories to Africa to help the continent upgrade its technological ability.

The two new funds will provide capital to Chinese enterprises seeking investment opportunities in Africa, particularly in the mining sectors, commercial and trade investment.