China’s “Going Global” Policy in Africa: An Exploratory Overview of an Evolving Policy Framework

The pace of economic engagement between China and Africa has increased exponentially in recent years, fueled mostly by burgeoning trade and investment ties. This impressive transformation of Sino-African relations has been complemented significantly by China’s “Going Global” policy, resulting in a huge number and diversity of Chinese multinational companies on the African continent. This proliferation of Chinese companies in Africa has generated new opportunities and prospects for all stakeholders, but has also engendered a host of challenges. This has no doubt had a significant impact on both the making and shaping of China’s foreign policy in Africa, and subsequently China Africa relations as a whole. This study relies on an extensive review of available qualitative and quantitative data to gain insights into the complex institutional and operational framework behind Chinese government support for the international ambitions of Chinese companies in Africa. What are the motives behind Beijing’s “Going Global” Policy? Which key institutions are involved, and what policy tools are employed to encourage the overseas investments of Chinese companies? What are the key drivers behind Chinese companies’ foray into the African market and what are the implications for China Africa relations, both in the short-term and long-term? These and other essential questions are addressed in this paper.

for China Africa relations, both in the short-term and long-term? These and other essential questions will be addressed in this paper.

Methods and Sources
The entirety of this paper is based on secondary sources of information. In particular, Chinese government sources including policy papers and documents from bodies and agencies such as the Ministry of Commerce (MOFCOM), National Development and Reform Commission (NDRC), Ministry of Foreign Affairs (MOFA), and State Administration of Foreign Exchange (SAFE) are utilized. Additional sources include official pronouncements from speeches as well as proceedings from high-level meetings and conferences. The paper also made use of published materials from books, journals, reports and seminars. In addition, a critical review of findings from various case studies from different sources was conducted in order to gain a deeper understanding into the policy and institutional framework that drives China's "Going Global" policy in Africa.

The Great Leap Outward: China's "Going Global Policy" in Perspective
China's investment policies have frequently changed over time, with initiation of new policy and changes in strategic directions. In the immediate aftermath of the formation of the People's Republic of China in 1949, restrictive investment policies as a consequence of the state planning system, coupled with a lack of investment resources resulted in very limited outward investment activity. However, China's opening up and reform initiated by Deng Xiaoping led to many changes in Chinese government policy, which has over the years shaped and directed the degree of internationalization of Chinese MNCs. Today, outward investment is a key focus of the Chinese government, especially since the announcement of the going global policy in 2000 (Buckley et al., 2007, p. 47).
This strategy was launched as part of the 10 th Five-Year plan in 2001, the same year that China acceded to the World Trade Organization (WTO). The president of China at the time, Jiang Zemin detailed the objectives of the plan as increasing outward direct investment, undertaking construction and engineering projects abroad, and exporting labor services. Some of the most obvious measures in that direction included the relaxation of investment restrictions abroad and the increase in financial support for corporate champions.
The first formal reference to the strategy however, was said to have occurred in the Chinese Communist Party Central Committee (CCPCC) Opinion on the Formulation of the 10 th National Economic and Social Development Five Year Plan (the Opinion) adopted in December 2000. As the first formal reference to the going out strategy, the Opinion, in its 12 th Article stated the following as one of the goals of the Five Year Plan: "Implement the 'go-global' strategy, and (Freeman, 2008, pp. 4-5).
The plan was eventually included in the 10 th Five Year Plan, and subsequently in the 2006 11 th Five Year Plan. The Outline of the 11 th Five Year Plan for national economic and social development highlighted the following seven needs: i. To encourage overseas investments to enhance China's competitiveness and expand the scope and modalities of China's international economic and technical cooperation; ii. To continue to develop overseas project contracting and labor service cooperation, and encourage competitive companies to explore processing and trading overseas, thereby promoting export of products, services and technology; iii. To support companies in exploring resources overseas that were in short supply domestically and promote adjustment of the sectoral structure of resources trade; iv. To encourage the use of foreign intellectual property resources to establish research and development and design operation centres overseas; v. To support capable companies in developing transnational operations to achieve internationalized operations to achieve internationalized development; vi. To improve the overseas investment service system and create a good investment environment for companies through improvements in systems governing finance, insurance, foreign exchange, taxation, intellectual property rights, laws and regulations, information services and entry and exit management; and vii. To improve corporate governance structures and internal regulatory mechanisms to regulate and supervise overseas investments (Huang & Wilkes, 2011, p. 9 against risks of all kinds" (NDRC et al., 2006).
Among other things, the document stipulates the sectors in which outward investment is encouraged, allowed or prohibited, provides policy support for the encouraged sectors and spells out the basic goals of the government in encouraging outward investment. The sectors that are encouraged are: i. Those that can acquire resources or raw materials for which there is domestic shortage and which is required urgently for the development of the national economy.
ii. Those that can promote the exports of domestic products, equipment or technology in which China enjoys a comparative advantage, as well as the export of labor services.
iii. Those which can significantly improve China's technological, research and development capability, as well as make use of internationally advanced technology, advanced management experience and professionals (NDRC et al., 2006).
The Outward Investment Policy includes a Catalogue of Encouraged Outward Investment which details the encouraged sectors. These cover a wide range of industries including agriculture, mining and quarrying, manufacturing, services and others.
The activities that are encouraged in the agricultural sector include planting of natural rubber, planting of oil-seeds, cotton, and vegetables, harvesting, transportation and cultivation of timber, animal husbandry, especially breeding of quality varieties of breeder animals, breeder birds and aquatic offspring, and ocean fishery, including ocean fishing and ocean mariculture. The activities encouraged in the mining and quarrying industry include prospecting and exploitation of petroleum, natural gas, iron, manganese, chromium, copper, bauxite ores, lead, zinc, nickel, cobalt, titanium, vanadium, niobium, tin, gold, silver, uranium ore, salt, phosphate sulfur, boron ore, coal, oil sand, oil shale heavy oil, diamond, graphite, etc. The activities encouraged in the manufacturing industry include textiles, clothing, footwear and other leather goods, furniture, agricultural machines, paper, industrial chemicals, fertilizers, pharmaceuticals, smelting, satellites, industrial machinery, cement, vehicles, electronics and many others. The activities encouraged in the service sector include global marketing network, ocean freight transport, construction and operation of communications network, software development and application service, research of new and high technologies and new and high tech products, trans-border highway and railroad transportation, and construction and operation of trans-border highways, railroads and bridges, journalism, radio programs, films, television programs, and the spread of culture and art that increases publicity of the Chinese culture (NDRC et al., 2006).
The investments that are prohibited are those that: i. Endanger national security and hurts public interests; ii. Utilize techniques or technologies that are prohibited by China from exportation; iii. Are in areas of operation prohibited by Chinese law; iv. Prohibited from receiving investment by the law of the hosting country, other industries prohibited by the international treaties that China has concluded or taken part in; v. Prohibited by law, administrative law, or regulation (NDRC et al., 2006). Aside from the sectors that are encouraged or prohibited, all other sectors are "permitted". Investments that fall into the encouraged sectors receive policy support, while those in the permitted sectors do not receive any support, though they may be undertaken. Article 8 of the Outward Investment Policy details policy initiatives aimed at providing support and incentivizing companies to pursue the aforementioned encouraged investment projects. For these investments, "the state shall provide policy support in macroeconomic control, multilateral and bilateral economic and trade policy, diplomacy, finance, taxation and foreign exchange, customs, resources and information, credit and loan, insurance, and bilateral and multilateral cooperation and foreign affairs, etc." (NDRC et al., 2006).
One of the foremost means of providing policy support is the Special Funds for Foreign Economic and Technical Cooperation. These funds are overseen by the Ministry of Finance and MOFCOM at the central and local level and are used to support outward investment and other activities such as agricultural, forestry and fisheries cooperation, civil engineering contracting, labor services, the establishment of high and new technology development platforms and design consulting. In line with these funds, outward investment is defined as investment by Chinese enterprises outside China to establish an enterprise, or obtain ownership or management rights over an enterprise, or rights to products of an enterprise by means of a newly established business entity, acquisition, merger or share participation (Freeman, 2008, pp. 6-7).
Practically, there are two main types of financial support for outward investment. They include direct support for costs and interest subsidies. Support for costs are given either for pre-investment expenses or operating costs, depending on the nature of the investment. Some investment projects do not qualify for all types of support. Generally, they may only receive support for pre-investment expenses and interest payments, but not operating costs. Subsidies for pre-investment expenses on the other hand are given to enterprises involved in outward investment, cooperative projects in agriculture, forestry or fisheries, contracting, labor services, high or new technology research and development platforms and design consultancy. The pre-investment expenses that qualify for subsidies include the costs for obtaining third party legal, technical or business consulting services, surveys or investigations, project feasibility studies and the purchase and translation of regulatory documents and specifications. The subsidies given for pre-investment costs may not exceed 50% of the actual expenses on the required services (Freeman, 2008, p. 7 and high technology research (Freeman, 2008, p. 7).
Interest rate subsidies are applied to interest on loans for enterprises that engage in outward investment or cooperative projects abroad in agriculture, forestry and fisheries. To qualify for interest rate subsidies, the loans must be medium or long term loans with a period not less than one year from a domestic Chinese bank. The total amount of the loan in question should not be more than the investment by the Chinese party or the contract amount and the subsidy may not exceed five years. In principle, the interest rate subsidy for RMB loans may not exceed the People's Bank of China base rate in effect and for foreign currency loans it cannot exceed 3% (Freeman, 2008, p. 7).
The government periodically makes changes to its policy support for outward investments. For example, in 2006 there was an increase in the number of forms of support with the introduction of new directives. One of these was a 20% subsidy for the transport of raw materials to China for enterprises engaged in the exploitation of raw materials. To qualify for this subsidy, the raw materials in question must be transported by a Chinese enterprise with an equity interest, and must fall within the following resources: oil, natural gas, iron, copper, aluminium and other metals, and also forestry and fisheries resources. A subsidy was also introduced for the cost of personal accident insurance for Chinese personnel working outside China and subsidies were also permitted for the cost of personnel required to be sent outside China to handle events of force majeure such as terrorism, war and natural disasters.
Again in 2006, the maximum amount of subsidies a single enterprise could receive in any one year was limited to RMB20 million. Investment projects that can receive support are also limited by the value of the total investment. So for foreign investment projects, the Chinese party's investment must not be less than US$1 million or its equivalent, while for foreign high or new technology development platforms, the contract amount must be not less than US$500,000 (Freeman, 2008, pp. 7-8).
The Outward Investment Policy has also targeted specific sectors in other ways. One of the earliest to be encouraged was investment in processing trade. A number of measures on this sector were adopted.
However, the Chinese government does not generally provide specific sector and country specific incentives for outward investment rather than the supports available for encouraged investment sectors.
What it does though, is provide guidance on targeted countries and sectors in them. These are based on what the Chinese government views as preferred sectors for investment in various destination countries.
For example, in the past the government has tried to guide Chinese companies to invest in the assembly of consumer electronics and the Middle East and Europe and textile processing in Africa, Latin America and Europe. Subsequently, the government has released more comprehensive catalogues of countries and target sectors in which Chinese companies are encouraged to invest. These catalogues are however, only for guidance. In addition, market analyses, guides to the legal environment and investment barrier reports for many countries are made available by the government to support Chinese companies in their investment decisions (Freeman, 2008, p. 8).
The Outward Investment Policy document further details government policy regarding prohibited outward investment projects in Article 9, stating that the state will not grant approval for such projects, and will take the necessary measures to prevent and stop such projects (NDRC et al., 2006).
The impact of the going out policy was felt soon after its implementation. Notably, China's ODI stock reached approximately US$36 billion and ranked sixth among 118 emerging economies by the end of 2002. In 2004, the government began a gradual liberalization of the ODI regulatory regime with the "reform of the investment system". This reform was aimed at decentralization of investment verification and approval at the provincial level, relaxation of foreign exchange controls, and stimulus packages to ease the transition of Chinese companies onto the world stage (Bowman et al., 2013, p. 8).
The going global strategy was effective in its ability to motivate Chinese companies to actively seek and acquire foreign assets and equity interests in contrast to merely trading in global commodities and In line with this trend, Africa has witnessed a surge in Chinese investment across all sectors of the economy. Chinese FDI has grown from $1 billion in 2004 to $35 billion in 2015, according to official figures. This represents an impressive, average annual growth rate of 40 percent (Sun et al., 2017, p. 20 suggests that there are more than 10,000 Chinese firms operating in Africa today (Sun et al., 2017, p. 27).

Key Institutions Involved in China's Going Global Policy
Chinese SOEs receive extensive support from the government of China which usually comes in the form of financing but also includes information and advisory services and establishing of contacts with African governments. Other companies that are owned by provincial governments as well as private companies also receive government help. important. They can afford to take on these projects as they receive additional public sector backing (Corkin & Burke, 2006, p. 11).
The proliferation of Chinese enterprises in Africa is therefore not a product of circumstance but instead, the result of a well-executed and coordinated strategy by the Chinese government, combining political will and goals with a wide range of mechanisms and resources comprising of political and financial institutions. This system is designed to enhance the mutual support of all actors involved and to coordinate their actions and intents and it is within this institutional infrastructure that Chinese firms are encouraged to go abroad. Commission (NDRC) which has been historically responsible for approving overseas investments and has even been informally referred to as the "small state council" was also considered part of this second level. The third level comprises those functional departments responsible for various fields such as finance and taxation. They are mainly tasked with assisting the core ministries to ensure that the policies are coordinated with other existing policies, and to assist in issuing and implementing the policies. The fourth and final level includes mostly line ministries responsible for specific sectors such as mining, agriculture and forestry. While each of these ministries is directly in charge of policies within its own sector, they are less influential in determining overseas investment policy affecting its sector. In addition, there exist several departments under each of these ministries who also play important roles such as execution of polices (Huang & Wilkes, 2011, p. 2).

The Ministry of Finance (MOF)
The MOF was established in 1949, and its main responsibilities include: i. Drafting development strategies, plans and policies for China's fiscal and taxation sectors, and cooperating in the development of macro-economic policies based on forecast economic trends; ii. Drafting laws and regulations regarding fiscal, taxation and accounting management; iii. Managing the central government's revenue and expenditures, including preparing the annual budget, supervising its use and reporting to the central government.
The MOF is also in charge of negotiations and agreements regarding China's overseas fiscal activities, such as debt (Huang & Wilkes, 2011, p. 4

National Development and Reform Commission (NDRC)
The NDRC, sometimes referred to by its previous name, the State Development and Reform Commission, is the main government body that designs, regulates and coordinates national economic development and industrial policy. Its functions include regulating government investments in domestic industries and developing "strategies, goals and policies to balance and optimize China's overseas investments" (Huang & Wilkes, 2011, pp. 3-4). The NDRC's objective is to create an advantageous environment for Chinese enterprises doing business in Africa. They support the setting up of inter-government investment cooperation institutions between China and African countries and promote Chinese-African economic and technological cooperation. Its executive body is the Foreign Investment Department. The NDRC also engages in tariff exemptions for exports from least developed countries in Africa (Li et al., 2012, p. 27 host country catalogue that lists the countries for which the Chinese government subsidises OFDI (Huang & Wilkes, 2011, p. 4). It has also worked in conjunction with the Ministry of Finance, Ministry of Commerce and General Administration of Customs to establish a tariff exemption group to decide a number of issues, which include the list of tariff exemption commodities, rules of origin and the implementation periods (Li et al., 2012, p. 27). The NDRC is also: "involved in the approval process for Chinese OFDI and large scale Chinese OFDI projects in industrial sectors such as natural resources and other projects involving large sums of foreign exchange need prior investment approval from the NDRC" (Huang & Wilkes, 2011, p. 4).
Projects for resource development that require Chinese investment exceeding US$30 million as well as non-resource development projects that require investment amounts of more than $10 million must be approved by the NDRC, while resource development projects with investments of over US$200 million and non-resource projects requiring investments of over US$50 million must be reported by the NDRC to the State Council for Approval (Freeman, 2008, p. 8).

China Export Import Bank (Exim Bank)
The Export-Import Bank of China is one of the principal lending arms of the Chinese government. It was founded in 1994 and is fully owned by the state, with the central government guiding its operations.
It is headquartered in Beijing, but has 25 domestic branches and four overseas institutions namely, the

China Development Bank
Like the Exim Bank, the China Development Bank (CDB) was established in 1994. Its main mission has been to build China's infrastructure including its national highway and rail networks, gas pipelines, water projects, and power plants as well as key economic sectors like petroleum-chemical refining, and telecommunications. The bank is also tasked with disbursing loans for Chinese businesses in pursuance of the "going global" strategy (Wang, 2007, p. 15

China-Africa Development Fund (CADF or CAD Fund)
CAD Fund was established in 2007 to encourage Chinese enterprises to conduct trade and other economic activities in Africa. It is a subsidiary of CDB and also its principal source of funding. It is a market-oriented operating fund with 50-year duration. CAD Fund's objective includes "to promote economic cooperation between China and Africa and advance Africa's economic development". It does this by investing directly in Chinese enterprises that have already set up operations in Africa and also providing funding for those that wish to do so. CAD Fund operates on market economy principles and is solely responsible for all its profits and losses. The Fund's target group is Chinese enterprises who already operate in Africa or wish to invest in projects on the continent, as long as they comply with the laws, statutes and regulations of China and the recipient country which is being invested in. Financial support from the fund helps to support Chinese enterprises who experience capital shortage, but it also provides advisory services to Chinese enterprises who often lack experience in the African market.
Based on market principles and the investment needs of specific African countries, CAD Fund seeks investment in sectors such as agriculture, machinery manufacturing, infrastructure, construction materials, trade zones and resources development. Management of CAD Fund are required to meet annually with representatives from various Chinese government ministries (Schickerling, 2012, p. 47).

China Securities Regulatory Commission (CSRC)
The CSRC was set up in 1990 as a ministerial level agency to manage the country's security and futures markets. With regards to outward investment, it is responsible for approving and supervising Chinese companies' overseas stock issues and debenture activities, stock market listings and related financial activities. However, the agency's actual role in supervising overseas listings is limited to making suggestions and providing coordination while most of the supervisory work is undertaken by the responsible departments in the location of the listing (Huang & Wilkes, 2011, p. 4).

State Asset Supervision and Administration Commission (SASAC)
SASAC was established by the State Council and tasked with the responsibility of supervising the non-financial state-owned enterprises. As a direct representative of the Chinese government, owner and investor in state-owned enterprises, SASAC has wide-reaching responsibilities and powers. Before SASAC was established, its responsibilities were divided between the State Economic Trade Commission and several ministries and other government agencies that controlled and supervised their respective sectors. This situation sometimes resulted in state-owned enterprises competing amongst themselves, hence the creation of SASAC (Huang & Wilkes, 2011, p. 5).
As an investor, SASAC is mostly concerned with ensuring the competitiveness and profitability of state-owned enterprises under its supervision. SASAC is comprised of two levels: the national level which directly controls 120 national state-owned enterprises, and the subnational level which act at a provincial level. SASAC is directly involved in the major decision making of firms under their control.  (Wang, 2007, p. 16 billion, though it had declined by 6.5% compared with the previous year (Freeman, 2008, p. 10).

China Council for the Promotion of International Trade (CCPIT)
The CCPIT is dedicated to promoting cooperation between Chinese and African entrepreneurs. During ministerial conferences of FOCAC, the CCPIT convenes the China-Africa business sub-forum to stimulate pragmatic bilateral cooperation. Its executive body is the Department of International Liaison.
Under the leadership of the CCPIT, the China-Africa joint chamber facilitated activities to improve mutual cooperation (Li et al., 2012, p. 27

Discussion
Chinese government support for the internationalization efforts of Chinese companies is therefore a recurring theme which has no doubt played a crucial role in expanding the scope and scale of Chinese business activities in Africa. As demonstrated above, government ministries and agencies as well as a string of financial institutions have been an instrumental part of this strategy. Several key motives and drivers account for this comprehensive strategy. Among the more common ones are:

Resource Acquisition
Due to a massive domestic investment, rapid urbanization and production for domestic and foreign consumption, China has witnessed an unprecedented demand for resources such as oil, iron ore, copper and aluminum. China is presently consuming more than 25% of the world's total annual production of minerals. It is forecasted that China's dependence on imported oil and gas will rise from 51.2% and 5.8% in 2008 to 60% and 30% in 2015, and continue to grow to 70% and 50% in 2030. This huge demand cannot be sustained by domestic production alone, given China's limited domestic deposits of most resources, and so the threat of severe resource shortage is a real issue for China's policy makers.
It is no surprise then that energy exploitation and development have consistently been at the forefront of China's OFDI drive, accounting for 70% of the total value from 2005-2013 (Du, 2014(Du, , pp. 1130(Du, -1131. Of particular importance to China is access to energy resources. According to a study by the International Energy Agency (IEA), China is well aware of its growing dependency on imported energy and is therefore taking the necessary steps to secure "a more prominent position in the existing Peng "blessed Chinese involvement in the exploration and development of international oil and gas resources" and also "tied such projects specifically to the objective of stable, long-term supplies of oil and gas". The study concludes that China is increasingly aware of the fact that its diplomatic goals with respect to energy, primarily oil and gas, must "aim toward participation in the global energy system in a way that maximizes domestic energy security" (International Energy Agency, 2000, p. 10).
The Chinese government's need to secure much needed resources to fuel China's burgeoning economic growth is therefore a huge impetus for the Chinese government to aggressively pursue oil and numerous other natural resource commodities in Africa. China has already assumed the status of second-largest importer of oil in the world, and coupled with a declining domestic production of oil, as well as the increasing need to sustain economic growth, the Chinese government has had to take steps to explore long-term deals with African governments in order to ensure an uninterrupted access to much needed raw materials, especially energy resources like oil. In essence, China's search for energy security has become the chief, overarching driver of its foreign policy push in Africa, which has long assumed a major role in this objective, and much of this focus is evidenced by specific policy initiatives such as the Going Global policy.

New Markets
For many Chinese manufacturers and entrepreneurs, the types of goods they produce and sell has immense value in Africa. These include affordable electronics, household appliances, apparel, and other domestic goods. Since Africa's economy is less developed than that of the West, such inexpensive products get a much better reception there. Besides, due to the low level of industrialization in Africa, there exist little to no competition in some industries. This is a big draw for Chinese companies who can immediately command a large share of the market.
In addition, due to the opening up and reform measures initiated by then President Deng Xiaoping, China has increasingly become a destination of choice for foreign firms wishing to lower production costs and expand their markets. This, coupled with increased domestic competition has meant that Chinese firms are finding it increasingly tough to do business in their home country. A KPMG report targeting foreign firms operating in China interviewed a number of senior executives over a range of sectors about the challenges and opportunities of operating in China. Such opinions as "growth slowing", "costs rising" and "China being an increasingly expensive place to do business" were reported. This could be seen as the beginning of a shift in the world's production chain with China moving up the value chain (Ahmed, 2013, p. 51).
A study by IBM Business Consulting Services notes: "In aggregate, the majority of profits in China disproportionately flow to highly regulated, highly concentrated industries such as oil and gas, mining and telecommunications services that are primarily controlled by SOEs. In contrast, many manufacturing sectors are deregulating, hindered by overcapacity and facing intense profit pressures. As a result, Chinese manufacturers are naturally looking abroad for new markets with less competition and higher profit potential" (IBM Consulting Services, 2006, pp. 4-5).

Diversification
Another motivation for China's going-global policy is the need for Chinese multinationals to diversify as a way of spreading risk. Expansion into the African market is a way of diversifying the markets for their products in the global economy. In this regard, the Chinese government also encourages companies to enter into new markets and to use foreign market access as a way of getting around trade barriers by foreign countries. For example, after the passage of the African Growth and Opportunity Act, Chinese companies began setting up textile factories in Africa in order to gain entry into the U.S market.

Strategic Assets
It has become necessary for Chinese companies, especially State-Owned Enterprises to obtain strategic assets as they become part of the global economy. This is especially crucial for companies in the energy sector, who with government assistance are able to purchase a myriad of operations in strategic locations without having to worry about cost efficiency. This has been the case in Africa where Chinese companies have been obtaining strategic assets from failing investments within the energy sector.

Conclusion
There is certainly no doubt that with its going global policy, China is pursuing its own self-interests.
However, tangible potential benefits exist for all stakeholders. African states will gain much needed foreign investment to bolster economic growth, diversify their economies and climb up the global value chain. The Chinese government stands to benefit from continued, uninterrupted access to natural resources, while improving its relations with African states through the strengthening of its diplomatic standing, which will go a long way towards actualizing the political partnership it needs to counter Western influence and enhance its standing within the international stage. Chinese companies will gain much needed international experience and move closer towards their internationalization aspirations.
Additionally, African markets present huge opportunities for expanding revenues and profits, reducing risk through diversificationas well as reducing costs by taking advantage of cheap labor and raw materials.
Overall, China's investments on the continent have contributed to African development while helping China to diversify its external assets, most of which are tied up in foreign treasury bonds with relatively low yields. It has also increasing led to a change in public policy, from a more myopic focus on trade and investment in a few sectors to a more diverse and broad-ranging engagement. Chinese investments in Africa have not only spurred the growth of Chinese firms but has also enhanced Africa's economic development through the upgrade of industrial technology, provision of jobs, increase in foreign exchange earnings, development of infrastructure, knowledge transfer, and economic diversification.
Thus, China Africa relations under its current form as well as its future outlook appears to be ripe with opportunity, not only for China and its armada of multinationals, but for African states as well. What remains to be seen is if African governments across the continent can ensure that their own key interests are captured within this engagement. This is the challenge faced by African countries, but within which exists the opportunity to enhance the pace of economic development and improve the quality of life of its people. However, several issues need to be tackled in order for both parties to realize the full potential in this engagement. Many African governments now possess adequate leverage to not only negotiate with China on equal terms, but also spell out the terms of any agreements. China has time and again reiterated its commitment to a mutually beneficial and win-win partnership. The onus lies on African states to engage China in a way that will compliment their domestic growth and development strategies. A starting point will be encouraging Chinese companies to establish joint ventures with local firms, use local materials and labor, reinvest profits in the local economy and share technical know-how. This way, engagement with China will not only serve to benefit the Chinese side, but will also work towards cultivating and harnessing the development of the local economy, with the aim to improve the quality of life of Africans.