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Business / Economy

Former French offical calls for closer cooperation in Africa

By Zhong Nan (China Daily) Updated: 2015-11-19 08:00

France is keen to support the globalization strategies of Chinese companies in Africa with its well-established financial services and commercial networks, said former French prime minister Dominique de Villepin.

While most Chinese companies in Africa concentrate on English-speaking regions and compete with Indian, European and the United States companies for market share, Villepin called for a different approach.

Former French offical calls for closer cooperation in Africa

Dominique de Villepin, former French prime minister. [Photo provided to China Daily]

"Chinese companies can focus on Francophone countries such as the Democratic Republic of the Congo, Gabon or Algeria where international competition is not that tough," he said.

Currently, there are more than 120 million people across 31 Francophone countries in Africa that can speak French as either a first or a second language, according to a report published in June by the United Nations Educational, Scientific and Cultural Organization.

"Central and West African countries are in the process of urbanization and industrialization. But most of the governments and companies have limited budgets to achieve the goals. China's comparative advantages in production capacity and equipment manufacturing can be combined with French technology and regional commercial networks for joint exploration of the African markets," said Villepin.

Such cooperation will benefit all parties, he said. African countries can achieve development at lower costs and fast speed, while China, which is in the midst of industrialization, can realize its industrial upgrading. France, which is in the process of post-industrialization, can also deepen its business influence in Africa, he said.

Keen to diversify its earning ability, France started to speed up its visa procedures and has been competing with other European nations such as the United Kingdom and Germany to attract Chinese business travelers and tourists.

China and France have already started cooperation on education, security and public sanitation in Africa under government deals sealed in the past five years, according to the Ministry of Commerce.

Attracted by France's strong business ties with Africa, Bank of China Ltd has set up three branches in Paris and Lyon to provide financial services to more than 240 Chinese companies in 31 countries. It also launched a renminbi clearing center in Paris in December.

Affected by weak demand for global goods, lower commodity prices and the Ebola crisis in West Africa, China's outbound direct investment to Africa dropped more than 40 percent year-on-year to $1.19 billion in the first half of this year.

"Other key challenges for Chinese companies in Africa include lack of international management experience and cultural clashes amid growing business problems in the continent," said Zhao Ying, a researcher at the Chinese Academy of Social Sciences' Institute of Industrial Economics in Beijing.

"To prevent financial losses, it is necessary to build stronger partnerships with French companies as they are familiar with local legal and commercial environment, profitability models, as well as proficient in identifying risk points in various investment activities," said Zhao.

 

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