Study On The Capacity Cooperation In The Automobile Industry Between China And African Countries Under The Belt And Road Initiative

After years of development,China’s automobile industry has become one of the pillar industries of the national economy.However,as it is argued that China’s economy has already entered a “three-phase superimposed" stage,the domestic market’s weak demand for cars along with higher requirements put forward by transportation,energy and environment are all urging China’s automobile industry to seek new international market in order to solve the industry’s development bottleneck problem.In the meantime,Africa’s low-cost human resources,policy support and abundant natural resources have constantly attracted Chinese auto companies moved to Africa.Under the guidance of the theory of FDI,the theory of national competitive advantage and the theory of international capacity cooperation theory,this study tries to analyze the capacity cooperation in the automobile industry between China and African countries by adopting various analytical approaches such as the SWOT method,statistical analysis,economic indicators analysis and comparative analysis.It is concluded that the advantages of capacity cooperation in the automobile industry between China and African countries are mainly policy advantage and capacity advantage.The industrial policy,trade cooperation policy and financial support combine to form the policy advantage in Africa;meanwhile,China’s automobile industry enjoys a comparative advantage in capacity scale,product price and foreign investment capacity and scale.Yet the transfer of China’s spare capacity in the automobile industry to the African market is still restricted by the Africa import policies,the shortcomings in the Chinese companies’ business strategy,product quality,investment of technology and the lagging economy and infrastructure in Africa.The "Belt and Road" initiative,along with the expanding of the African market and relatively low entry barriers,create opportunities for capacity cooperation in the automobile industry between China and African countries.But the turbulent political environment,the growing number of trade frictions,serious corruptions among African countries,as well as the fierce competition of US,European,Japanese and South Korean auto-companies in the African market are all posing huge challenges on the China-Africa automobile industry capacity cooperation.Although faced with various risk,it is argued that over the coming period China’s international capacity cooperation in the automobile industry will still focus on countries along the “Belt and Road” and the continent of Africa.A new flying geese model may emerge,with China as the core.This study puts forward suggestions on promoting the capacity cooperation in the automobile industry between China and Africa from three points of view: macro,meso and micro.It is suggested that intergovernmental cooperation should be enhanced and the capacity cooperation could be carried forward by setting up industrial parks or special economic zones,strengthening education cooperation,providing quality automobile industry capacity with fiscal subsidies and tax incentives.It is also suggested that the government should think on the basis of subdivided industries and promptly introduce relevant industrial policies,encourage more industry associations to take initiatives and take part in the international cooperation.In this way,a bridge of capacity cooperation between Chinese and African companies could be set up and lead to synergy.Finally,companies are recommended to adjust business strategy accordingly by implementing active brand strategy,paying more attention to the quality of products,accelerating the establishment of international marketing mode and after-sales service system,adopting localized operation and management mode,strengthening the core technology competitiveness and thoroughly investigating the local market,all of which will provide basis that ensures Chinese companies’ smooth entry in Africa.