Research On African Economic Cooperation From Chinese International Engineering Contracting Enterprises

China is the largest developing country in the world, and Africa is a continent with the most developing countries. In Africa, there are 54 countries and regions with a population totaling at about 1 billion. Sino-Africa economic development is a paragon of “South-South Cooperation” in the current world. Being highly complementary in terms of economy, China and African countries have a huge market and promising prospects for their economic cooperation. The Chinese Government has been long committed to consolidating and developing its friendly partnership with African countries. Investment in Africa is an important measure for China to realize the international strategic layout of its raw materials and energies and to expand the international competitiveness of its capitals. Sino-Africa cooperation has been expanding from the traditional fields, such as agriculture, mining, agricultural product deep processing and manufacturing to fields, such as finance, commodity services, wholesales and retails, real estate and architecture. Almost all industrial sectors have been covered by the bilateral cooperation. Therefore, to study the Sino-Africa economic and technical cooperation is of vital strategic significance.The rapid growth of African economy has fueled its demands for infrastructure construction. Many Chinese enterprises specializing in international project contracting are attracted to invest in Africa due to the rich energy and mineral resources, the low-cost labor and the huge market potential there. It is justified to say that project contracting enterprises play an important role in boosting Sino-Africa economic cooperation. Currently speaking, Chinese international project contracting enterprises are faced with brilliant development opportunities in terms of their direct investment in Africa. According to the latest report by African Development Bank, Africa has become the continent with the fastest-developing economy globally. Its development potential has attracted many foreign investors. However, there are also some problems and challenges to be resolved, such as increasing risk factors and international competition pressure, unfamiliarity with the local market environment, incompleteness of the legal system and the supervision system, lack of stable economic policies, etc. All these problems and challenges have brought huge losses to enterprises investing in Africa. Especially since 2010, affected by the global financial crisis, the European debt crisis and other factors, the international project contracting market has been severe. The competition in the traditional international project contracting sector has been growingly fierce, and the industrial development has been shifted into a new and key period for transformation of the development mode. Without making some breakthroughs in the new round of industrial adjustment, some enterprises might be eliminated. Thus, it is imperative for Chinese international project contracting enterprises to speed up transformation of their development mode and actively participate in foreign economic cooperation in terms of their contracting of the traditional international contracting business.The focus of this research is on evaluating the influencing factors and performance of economic cooperation between Chinese international project contracting enterprises and Africa at an attempt to help Chinese international project contracting enterprises to better seize the favorable investment opportunities in Africa, adapt to new situations, overcome various challenges, develop investment projects related to the project contracting business, gradually form a pattern featuring mutual promotion, supplement and development between foreign investment cooperation and major business and achieve sustainable development.This paper first introduces the theoretical bases and previous research into economic cooperation between Chinese international project contracting enterprises and Africa; defines the research field, characteristics and scope; and clarifies the research technical path and research methods.Second, this paper gives a brief analysis of the development process and status of economic cooperation of Chinese international project contracting enterprises in Africa; and compares and statistically analyzes the gross characteristics, domestic main characteristics, geographical characteristics and industrial characteristics so as to lay a solid foundation for further analysis in the following parts.Third, an econometric model is built up based on the quantitative methods, and is used to elaborate on factors influencing economic cooperation of Chinese international project contracting enterprises in Africa and reveal the development rules and characteristics of such economic cooperation.Fourth, major modes of direct investment of Chinese international project contracting enterprises in Africa are further summarized, which include the market access modes, the operation modes, the investment modes, the financing modes and the management and control modes. External conditions and internal mechanism for the direct investment of the Chinese side in Africa are analyzed, based on which rules are extracted to guide future practices.Fifth, the economic cooperation benefits of the Chinese side in Africa are analyzed. Through a preliminary selection of evaluation indexes, the building of the index system, the test and optimization of indexes, and combining the special conditions of Chinese international project contracting enterprises, this paper puts forward a system to evaluate cooperation benefits of the Chinese side in Africa. Through the empirical research, differences of economic cooperation benefits of the Chinese side in Africa and the causes are analyzed.Sixth, this paper conducts a case analysis of economic cooperation of China Jiangxi Corporation for International Economic and Technical Cooperation(CJIC) in Africa. With CJIC as an example, the development process and trend, management modes and effects of its economic cooperation in Africa are analyzed, based on which measures for optimization are put forwardAt last, this paper puts forward development suggestions and countermeasures for economic cooperation of Chinese international project contracting enterprises in Africa in terms of national support, industrial policy guidance and internal corporate management.Below are innovation points of this paper:(1) Innovation of the research perspective: According to a thorough literature review, it is found that scholars both at home and abroad mostly focus on analyzing the macroscopic investment motives, investment periods and investment industries as to direct investment of Chinese enterprises in Africa, and that few of them study the direct investment of the Chinese side in Africa in a specific industry. Moreover, in terms of research perspectives, Africa is often chosen as a single research object. Few of them study from the perspective of Chinese enterprises operating in Africa. The research perspective of this paper is unique from the other similar researches. In this paper, economic cooperation of Chinese international contracting enterprises in Africa during the strategic transformation process is analyzed, which detailed study the total, domestic subject, location and industry characteristics, influence factor, cooperation model and efficiency evaluation. This is unique in the current research field.(2) Innovation of the research methods: The 54 African countries are divided into four levels according to the ranking of contract project turnover. Comprehensively consider the influence factors of five aspects, the second and third level indicators are selected: to comprehensively evaluate the influence factors of economic cooperation between China?s international contract engineering enterprise and Africa with componential analysis and multiple linear regression; select 8 indexes form the 11 indexes to develop the evaluation of economic cooperation between China?s international contract engineering enterprise and Africa based on the SFA. Through the empirical analysis of exogenous and endogenous variables, this paper finds out variables essential for enterprises of the kind to improve their economic cooperation benefits in Africa, which provide the theoretical basis and the practical guidance for economic cooperation of relevant enterprises in Africa in the future.(3) Put forward new ideas and measures to promote the economic cooperation between China?s international contract engineering enterprises and Africa. It makes holistic and deep thinking on the influence factors, main models, efficiency evaluation of economic cooperation between such enterprises and Africa, analyzes the Jiangxi international company case, puts forward specific measures to meet the practical and operational in the system, organization, personnel quality, risk control aspects from the national level top-level design, policy support, to the norms guide at industry level, and then to enhance the quality at enterprise level. Based on the practice of African economic cooperation, this paper discusses the internal relations between various factors, and draws on the latest theoretical research results to absorb the international investment, development economics, project management and other leading theories, so as to make up for the relevant research gaps to a certain extent.Economic and technical cooperation of Chinese international project contracting enterprises is a relatively new research direction. The broadness of the research scope, the difficulty of data acquisition and the rarity of existing research data—all these have resulted in a gap between its actual findings and expected findings. Specifically speaking, the limits of this paper are mainly reflected in the following three aspects:(1) Difficulty of collecting information about Africa in the field: Economic cooperation and direct investment in Africa calls for lots of first-hand data and materials. However, since this is still a relatively sensitive issue at present, many data lack transparency. Thus, during the research process, it is quite hard to obtain in-depth data about economic cooperation and direct investment of the Chinese side in Africa. Only some data about project contracting and investment and indirect materials are obtained, which affects the paper quality in some way.(2) Limit of research time and materials, and time lag of some data: The current knowledge of the economic and technical cooperation of Chinese international project contracting enterprises in Africa is still superficial. It calls for an in-depth analysis, understanding and research of its characteristics and trend. This is the limit of this paper in terms of the microscopic perspective.(3) The research sample of this paper is the economic and technical cooperation of Chinese international project contracting enterprises in Africa. Economic and technical cooperation of enterprises in other Asian countries or other continents in Africa is not analyzed. Thus, it is impossible to clearly point out the practical status of foreign investment enterprises in Africa.The author hopes that this research can serve as a modest spur to induce other scholars to deepen, widen and diversify research in this field, and provide a beacon for economic and technical cooperation and investment of Chinese enterprises in Africa.