Remarks for the
High-Level China-Africa Experience-Sharing Program on Special Economic Zones and Infrastructure Development
Robert B. Zoellick
President, The World Bank Group
September 14, 2010
It is my pleasure to participate in the opening of this year’s High Level China-Africa Experience-Sharing Program, now in its third year. I would like to thank our Chinese partners, the Ministry of Finance, Ministry of Commerce, and Leading Group on Poverty Alleviation.
China’s cooperation with Africa is by no means new. Trade between China and Africa goes back hundreds of years, and modern China has been cooperating with Africa since the early days of the People’s Republic.
What is new, however, is the level and significance of China’s partnership with Africa. Two-way trade between China and Africa has grown at more than 40 percent a year since the beginning of the decade, reaching nearly US$107 billion in 2008.
Chinese foreign direct investment in Africa is also growing rapidly, topping US$5.4 billion in 2008, and more than 1,500 Chinese companies have invested in Africa.
China has been particularly significant as a source of financing for investment in African infrastructure. A World Bank report estimates that China's investment in infrastructure in Africa over the period 2001-2006 was roughly comparable to that financed by all OECD countries combined over the same period.
This growing role of China in Africa is part of a broader shift to a new multipolar economy, in which the developing world represents an increasingly important source of global demand. We see a similar trend in the global development landscape, with China and other developing countries assuming important roles alongside traditional development partners. These new partners are contributing not only aid, but more importantly are becoming major trading partners and sources of investment and know-how.
This is particularly true in the case of China’s engagement with Africa. African countries want to learn about China’s development experience, particularly about overcoming poverty and sustaining economic growth.
The two themes for this year’s program -- special economic zones and infrastructure development -- are particularly important.
Let’s look first at special economic zones.
A key to China’s economic success has been the development of a competitive manufacturing sector. How did China move in three decades from being a poor agrarian economy to become one of the world’s largest manufacturing centers? Special Economic Zones played a key role -- as a test-bed for economic reforms, for attracting foreign direct investment, for catalyzing development of industrial clusters, and for attracting new technologies and adopting new management practices. Even though their importance has diminished over time, a recent World Bank study estimates that as of 2007, SEZs still accounted for about 22% of national GDP, about 46% of FDI, and about 60% of exports -- and generated in excess of 30 million jobs.
African countries want to learn from such success, and China is ready to help.
The Chinese government is supporting the establishment of industrial zones in several countries in Africa, with the hope that the success of China’s special economic zones can be replicated. This is a welcome initiative to expand Chinese investment in Africa beyond the minerals, energy, and infrastructure sectors into activities that offer greater opportunities for creating jobs and transferring know-how.
The World Bank Group is exploring with the Chinese government and with several African governments, ways in which we can work together to ensure win-win-win outcomes.
We believe there are a number of things that the Bank can bring to the table:
First, we can help develop the necessary legal, regulatory, and institutional framework for the zones to offer a world-class business environment, attractive not only to Chinese firms, but also to other foreign investors, and equally importantly, to domestic firms as well.
Second, we can support measures to ensure linkages to the local economy by creating a level playing field for both foreign and local firms and through interventions to provide opportunities for local supply chain, skills, and technology enhancement.
Third, we can support complementary infrastructure, as well as the establishment of efficient trade facilitation and logistics procedures and infrastructure.
Fourth, we can help governments to integrate the zone development plans into broader master plans at city or regional level in order to promote more efficient and integrated mixed-use of land and to avoid the risk of the zones becoming enclaves.
Fifth, through the IFC and MIGA, we can offer financing and insurance to the zone development companies and can support them in undertaking feasibility studies and in developing phased development plans of international standards.
Finally, and most relevant to this program, we can help to facilitate mutual learning and sharing of knowledge.
One aspect will be to work with relevant Chinese partners to ensure that African policymakers and practitioners get access not only to the strong expertise in zone construction that is offered by the Chinese zone development companies, but also to other aspects of China’s successful SEZ experience, including such areas as development, management, promotion, and marketing of zones. Another aspect will be to share -- both with our African and Chinese partners -- lessons from SEZ experience in other countries.
Let me now turn briefly to infrastructure.
Africa lags on infrastructure development, with major deficits in transport, roads, water, telecoms, and energy.
China’s experience can be instructive for African countries. It also suffered from infrastructure deficits at the beginning of its development process but succeeded in putting in place world-class infrastructure -- covering both urban and rural areas. Africa may also draw from China’s attention to rural infrastructure as a way to improving productivity and overcoming poverty.
Let me return to an earlier theme -- the changing global economic and development landscape -- and to look at this from the perspective of sharing knowledge.
Development is no longer a North-South transfer. It is South-South, even South-North, with lessons for all with open minds.
It is Africa learning from China on SEZs and infrastructure; it is China learning from Africa about effective community-driven development approaches; it is the United States learning from China about high-speed railways; and so on.
Nor is development any longer about simplistic panaceas, theory untested by realities, or one-size-fits-all structures. Rather, development is about a humble pragmatism, learning from experience, and applying sound principles while adapting to local needs.
This logic was recognized by Deng Xiaoping when, in 1985, he told Ghana's President Jerry Rawlings: "Please don't try to copy our model. If there is any experience on our part, it is to formulate policies in light of one's own national conditions.” This was wise advice. There is indeed a lot that African countries can learn from China's experience. The key, however, is to adapt that experience to Africa’s own needs, circumstances and conditions. This is precisely the type of understanding and adaptation that the World Bank Group aims to support though this and other China-Africa experience-sharing programs.
In closing, I want to again thank our Chinese partners: the Ministry of Finance, the Ministry of Commerce, and the Leading Group on Poverty Alleviation. It is exciting to see representatives from so many African countries here in China to share experiences. We look forward to learning from all of you.
I wish you a successful program. Thank you.