Topics

The workshop starts with an overview session focusing on China’s development approach. This is followed by a number of sessions focusing on thematic areas that are designed to explore some of the most critical issues facing Africa today using this common prism. The thematic topics to be covered include Agriculture and Rural Development; Infrastructure; and Special Economic Zones (SEZs), FDI, and Trade Development. An additional session is planned to exchange views on China’s economic cooperation with and engagement in Africa including China’s investment in Africa. The workshop will end with session discussing the implementation of reforms.

Topics to be covered in the workshop

1. Introduction
To kick off the workshop, there will first be a brief overview on China's initial development challenges, what the most successful areas are and where policies failed, focusing on China’s general principles and approaches to reform, and the role of the government. This will be followed by a presentation by a senior representative of the African participants reviewing Africa’s development experience and growing success, and suggesting the key development challenges facing the continent where China’s experience might inform Africa’s responses to the challenges. This session would set the stage for the thematic topics to be followed as detailed below.

2. Agricultural Reform and Rural Development
Agricultural growth based on higher productivity in Africa is essential for achieving the broad growth needed to reduce poverty and hunger in an environmentally sustainable manner. The main challenges in the continent's agricultural sector include low production diversification, low productivity, land erosion, creation of value added agricultural products and marketing.

Agricultural reform and rural development is one of the more important successes of China’s development and it would be useful to focus on the experiences of how China has overcome barriers to assist farmers to diversify agricultural production and to increase productivity, including 1) land reform and household responsibility system; 2) development of township and village enterprises to diversify rural production, 3) the development and application of agricultural technology such as hybrid rice, 4) China's current strategies in investing in the poor and remote regions with low population density, 5) the development of rural infrastructure and services, and 6) addressing environmental challenges.

3. Infrastructure
With 40% of the population living in landlocked countries, Africa has a major deficit in infrastructure -- transport, roads, water, telecoms, energy, etc. Low population density and the extremely low economic density (GDP per km2) result in high cost and low profitability of infrastructure investment. To accelerate Africa's growth performance, its investment needs in infrastructure are twice as much as the region has historically been investing. Complementary finances and market-oriented policy reforms will also be required to cover operations and maintenance requirements. China has gained considerable experience and learned its lessons in building sustainable infrastructure through commercial approaches and active private sector participation. The following themes would be especially relevant to Africa’s development challenges: 1) mobilizing external resources to finance infrastructure; for example, how China leveraged Development Assistance on infrastructure investment, and whether and how China has attracted foreign investment in infrastructure; 2) public-private partnership in building infrastructure; 3) how to plan infrastructure so it contributes to a shared and sustained growth, especially in remote areas; and 4) how to maintain and sustain infrastructure.

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4. Special Economic Zones, FDI and Trade Development
While global trade has increased to unprecedented levels over the last three decades, Africa’s share of trade has remained relatively constant and Africa's exports are still largely at the lower end of the value chain, i.e., in the form of raw commodities. High commodity and natural resource prices have increased FDI in Africa, and it will be important to use these resource flows to expand and diversify exports that will generate local employment and position the continent to compete effectively in the world market The key reasons for Africa's poor trade performance are a weak investment climate, inadequate trade facilitation, poor infrastructure development, including roads, ports, water and electricity supply, poorly performing customs and other trade-related institutions, low level of skills and constraints on finance.

The opening up of China since the early 1980s – allowing imports of capital, technology, and management know-how, along with other major policy reforms – has greatly enhanced China’s competitiveness and efficiency. Today, China is well integrated into the global market (trade as a share of GDP is 79%) and the global production network. It is the largest destination for FDI. Another important feature of China’s opening up to the outside world was the institution of Special Economic Zones or SEZs. The SEZs were an important form of reform experimentation and learning by doing and an integral part of China’s gradual approach to reforms. The SEZs were also a means to reduce resistance and opposition to critical reforms and build broad support for reforms through demonstration and controlled experimentation. What were the main constraints to China when it started its “Open Door” policies and how did it overcome these constraints? The key issues relevant to Africa include 1) how SEZs have been used to experiment and build support for critical reforms, 2) Chinese FDI policies and practices, especially the use of FDI as a mechanism for the transfer of technology and management know-how and policies encouraging the creation of local employment, 3) behind-the-border reforms vs. border reforms in propelling trade competitiveness, 4) Chinese government's current strategies to solve the underdevelopment in the inland regions and export policies for these regions and 5) relevance and limitations of China’s experience for Africa.

5. Discussion of China’s Cooperation and Engagement with Africa
There has been a dramatic increase in trade and investment flows between Africa and China, driven by economic complementarities. Africa has growing demand for inexpensive manufactured goods and machinery, while China's demand for Africa's natural resources continues to increase rapidly. But China is also increasingly importing from Africa labor-intensive raw or semi-processed agricultural commodities that are used for further processing either for industrial use (timber, cotton) or for consumer use (food products).

China and Africa go back a long way in their diplomatic and economic relationships. Both aid and technical cooperation historically have been of major importance between China and Africa, and both have increased significantly in recent years. In addition, China’s trade and investment in Africa is increasingly very rapidly, and the private sector has become an increasingly important force. Chinese FDI in Africa covers a variety of sectors, including petroleum, mining, agriculture, agro processing, infrastructure and manufacturing. Several factors contributed to the recent changes in China’s economic engagement with Africa: the growing trade and technology complementarities between China and Africa, including the complementarities in infrastructure sector, changes in China’s approach to financing, and Chinese government policies. China’s state financial institutions have been instrumental in cementing the new, commerce-based economic ties with African countries.

In recent years, the globalized marketplace has witnessed the rise of trade in intermediate goods and parts and components, which constitutes a fundamental shift in the structure of the world trading system. The prospects for industries in low-income African countries to engage in producer-driven network trade in the short- to medium-run are far more limited without attracting substantial FDI by firms already plugged into such networks. Increasingly, Chinese firms have these attributes. Still, the barriers to entry to global production sharing are significant.

A joint panel of Chinese and African participants will explore the "whys", "hows" and "whats" of China’s broad cooperation and engagement with Africa, including topics on 1) China’s approaches to economic cooperation and engagement with Africa, including China’s investment in Africa, 2) what Africa is looking for from Chinese cooperation, particularly Chinese investment, and 3) how Chinese engagement, particularly investment in Africa, can contribute to the integration of African production to the global production network and generate local employment.

6. Tying Up: What Are the Overall Lessons/Takeaways?
While the above sessions will focus on implementation of reforms and development approaches in each of the thematic areas, this final session will try to examine and discuss some of the common themes, including sequencing of reforms, the importance of reforms being implemented in an integrated (cross-sectoral) fashion, the importance of broad participation in strengthening the ownership of reforms, the use of reform experimentation and development as a learning process, and capacity building. In this session, participants will also share their main takeaways from the three-day workshops and their thoughts on topics and ways for continuous experience sharing between Africa and China.

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