“The Beijing Summit proposed forward-looking plans that are crucial for driving the next phase of China-Africa cooperation.” —Ikenna Emewu, Editor-in-Chief of Africa China Economy Magazine
The 2024 Forum on China-Africa Cooperation (FOCAC) Summit in Beijing recently concluded, establishing a firm political foundation for the construction of a new era, all-weather China-Africa community of shared destiny. This lays a solid groundwork for Chinese companies to further enter the African market, a promising investment destination. Africa, with a population of 1.4 billion, where 70% are under 30 years old, contains 12 of the 20 fastest-growing economies globally. What opportunities does this young and vibrant continent offer for Chinese companies venturing abroad? What principles should Chinese companies follow when entering the African market?
From September 4 to 6, during the FOCAC Summit, China announced plans to provide Africa with financial aid amounting to 360 billion yuan over the next three years.
Why is China So Focused on Africa? Africa’s development potential can be gleaned from some key data. Africa is the world's largest producer of diamonds, gold, and platinum. South Africa produces 95% of the world's diamonds and jewelry; Zimbabwe and the Democratic Republic of Congo account for roughly 50% of global gold production. Additionally, Africa possesses vast reserves of cobalt, copper, chrome, uranium, platinum, and bauxite. An entrepreneur once intended to develop a logistics and storage industry in Africa, only to discover a rich diamond mine beneath the land they purchased, eventually pivoting to mineral resource trading.
The African Development Bank's 2024 African Economic Outlook report forecasts that Africa's economic growth will rebound to 3.7% in 2024, surpassing the global average of 3.2%. The report also predicts growth could further rise to 4.3% by 2025. Africa’s economy is expected to remain resilient, with 41 countries forecasted to grow at a faster pace in 2024 compared to 2023. The United Nations Economic Commission for Africa predicts that, buoyed by rapid growth in regional export trade, private consumption, and fixed investment, African economic growth will rise from 2.8% in 2023 to 3.5% in 2024, and to 4.1% by 2025.
Africa is home to the second-largest population in the world after Asia, with a youthful demographic structure that has long been underestimated by Chinese companies. According to the 2022 African Economic Outlook, 18 African countries had growth rates exceeding 5% in 2023, and this number is expected to increase to 22 in 2024. Additionally, according to United Nations data, Africa has the highest population growth rate among major regions, with the population of sub-Saharan Africa projected to double by 2050. Africa's young population, with a median age of just 19, offers significant growth potential and is attracting a growing number of Chinese companies. However, Chinese businesses still lack sufficient understanding of the African market.
New Opportunities in Africa: The Case of United Imaging Healthcare （联影医疗）
Industries such as education, agriculture, digitalization, healthcare, and renewable energy all hold tremendous potential in Africa. During an interview with the responsible parties at United Imaging Healthcare, an EqualOcean analyst gained insight into the unique growth potential of Africa’s healthcare market.
In recent years, Africa's economy and healthcare industry have exhibited rapid growth, revealing significant market potential that warrants further exploration and investment. According to the China Chamber of Commerce for Import and Export of Medicines and Health Products, in the first half of 2024, China's total trade in medical products reached $97.755 billion, with exports totaling $52.579 billion, a 1.91% year-on-year increase. In the African market, China’s exports of healthcare products, including traditional Chinese medicine, Western medicine, and medical equipment, amounted to $2.176 billion, an 8.59% increase over the same period last year, demonstrating the growing demand for Chinese medical products in Africa.
Several Chinese pharmaceutical companies, including Fosun Pharma (复星医药), Humanwell Healthcare（人福医药）, Mindray Medical （迈瑞医疗）, Shanghai Pharmaceuticals（上海医药）, HEC (东阳光), and BGI Genomics （华大基因）, have actively expanded their presence in the African market through drug exports, equity acquisitions, and investment in local manufacturing. These strategies not only reflect Chinese pharmaceutical companies’ confidence in the African market but also offer new opportunities for the region’s healthcare resource development.
United Imaging Healthcare (UIH), a leader in global healthcare, has expanded its business to nearly 80 countries and regions, including Asia, the Americas, Europe, Oceania, and Africa. By mid-2024, UIH had served over 13,700 clinical and research institutions globally, forming partnerships with over 35 leading hospitals, research institutions, and universities across the world.
In Africa, UIH products have been sold to countries like South Africa, Kenya, Ethiopia, and Malawi. The company has set up regional headquarters and subsidiaries in places like the United Arab Emirates, Morocco, and South Africa to fully support business development across the region. UIH’s African division employs about 95% local staff, achieving extensive localization under the company’s global strategy.
“From an investment perspective, it may not bring immediate returns, but we highly value the long-term growth potential and customer needs in the African market.” —Allen, Vice President of International Business at United Imaging Healthcare
In many African countries, healthcare resources remain scarce and unevenly distributed. UIH products are often the only advanced medical imaging equipment in certain regions. Previously, China provided support to African countries like Comoros, Sao Tome and Principe, and Tanzania by supplying artemisinin-based drugs and technology, helping reduce malaria rates by 98%. This effort not only mitigated the health impacts of malaria but also saved these nations substantial fiscal resources.
The construction of the African Center for Disease Control (Africa CDC) headquarters in Addis Ababa, Ethiopia, completed on January 1, 2023, is a milestone in decades of China-Africa public health cooperation. The building, spanning 23,500 square meters, includes an office building, laboratory facilities, and is Africa's first modern, fully equipped CDC headquarters.
While Africa's socio-economic development is rapid, medical markets across countries vary significantly. The rising demand for healthcare, coupled with resource scarcity, offers UIH vast opportunities to continue its mission of improving access to high-end medical equipment and services globally. In 2020, UIH installed the first CT scanner in the border town of Malava, Kenya—the only CT machine within a 200-kilometer radius. Without this machine, Malava residents would need to travel four hours for a CT scan, far too late for life-threatening conditions like brain hemorrhages.
Infectious diseases are no longer the most pressing health issue in many African countries. As economies grow, living standards improve, and urbanization advances, chronic diseases like cancer, cardiovascular disease, and stroke are becoming major health challenges. In August 2024, UIH signed a research collaboration agreement with South Africa’s Nuclear Medicine Research Infrastructure (NuMeRI), introducing UIH’s PET/CT equipment to South Africa and advancing nuclear medicine research. Chronic conditions, including diabetes, once concentrated in developed countries, are now emerging as threats in Africa. This shift reflects changes in lifestyle, such as unhealthy diets, lack of exercise, and increased stress, putting African healthcare systems under new pressures. For Chinese healthcare companies, this presents significant opportunities in chronic disease management, medical devices, and innovative drugs. Providing efficient, affordable healthcare solutions could open vast market opportunities in Africa.
Africa as a Land of Opportunity for Private Enterprises
In 2023, Africa attracted $52.6 billion in foreign direct investment, which is helping develop infrastructure, create jobs, promote economic growth, and enhance the role of African nations in the global supply chain.
However, Africa faces challenges in ensuring the effective allocation and utilization of funds, avoiding corruption and mismanagement. While foreign capital brings technological and managerial advantages, lax oversight could lead to resource exploitation and environmental degradation, exacerbating wealth inequality. Balancing the positive and negative impacts of investment, and implementing and enforcing sound policies, is a shared challenge for African governments and the international community. Private enterprise plays an indispensable role in utilizing foreign investment effectively.
At the 2024 China-Africa Private Economy Cooperation Forum in Shenzhen, the Special Report on Private Enterprises' Investment Cooperation in Africa was released, highlighting that private enterprises are becoming key players in China's investment in Africa. As the largest foreign investor in Africa, China’s stock of direct investment in the continent exceeded $40 billion by the end of 2022, continuing to grow steadily in 2023.
Chinese private enterprises’ investment in Africa shows a clear regional concentration. In Eastern Africa, investments focus on Kenya, Tanzania, and Uganda; in Southern Africa, Zambia, Mozambique, and Angola; in West Africa, Ghana, Nigeria, and Côte d'Ivoire; and in Northern Africa, Egypt and Morocco. In Central Africa, the Democratic Republic of Congo is the main target. Investments in these 12 African countries account for 48% of China’s total investment stock in Africa, underscoring their importance to China’s overseas investment strategy.
Many Chinese companies operating in Africa prioritize localization. For example, Inner Mongolia King Deer Cashmere employs over 7,000 local workers at its Madagascar factory, with only about 50 Chinese employees. This model effectively promotes local employment and economic development.
Projects by Chinese private enterprises in Africa are often characterized by being “small but beautiful” and focused on improving livelihoods. For example, Xin’an Group built the first modern pesticide formulation plant in Ghana, with an annual capacity of 30,000 tons. The factory addresses Ghana’s “weeding problem” in agriculture and introduces high-yield solutions for corn, increasing local farmers’ incomes by 40-60%. As a result, Xin’an Group has become West Africa’s largest pesticide supplier and was awarded for its outstanding contribution to Ghana's agricultural development.
Chinese private enterprises also establish a foothold in Africa by leveraging technological advantage. TCL, for instance, has been in the African market since 2004, selling smart terminal products like TVs, air conditioners, refrigerators, and washing machines across 46 African countries. By 2023, TCL's sales in Africa exceeded $100 million. In 2021, TCL and a partner established a TV+ factory in South Africa, introducing advanced production technology and management practices. TCL’s factory is now a modern LCD TV manufacturing center, and the company plans to further upgrade the factory’s digitalization and intelligence, boosting television production in South Africa and Southern Africa.
China’s export of capacity, particularly in infrastructure, meets urgent needs in Africa. Infrastructure construction in Africa remains immature, with significant gaps in transportation, energy, and communication. Chinese enterprises can collaborate with African countries to fill these gaps, accelerating the construction and upgrading of roads, railways, and ports. China's robust manufacturing and supply chain systems can also rapidly provide critical materials and equipment, enabling Africa to develop independently. Additionally, China's technology and management expertise can facilitate knowledge transfer and local capacity building.
In the transportation sector, the export of second-hand vehicles will also help address Africa’s transport challenges. Many African countries have high demand for vehicles, but most people cannot afford new ones. China’s “trade-in” programs enable refurbished used vehicles to be exported to Africa, meeting local transportation needs while solving China’s vehicle replacement problem.
Transsion Holdings is a flagship example of Chinese private enterprise’s success in Africa. Since its early focus on Africa, Transsion has become a market leader, holding a 48.7% share of the African mobile phone market in 2022, with revenue of 20.633 billion yuan ($2.98 billion). Transsion’s success lies in its focus on local needs, such as long battery life, affordable prices, and local preferences, like hairdressing tools in regions where personal grooming is a priority.