Zheng Haosheng: I'm doing business on the Belt and Road

Vice President of the China-Africa Chamber of Commerce, Inner Mongolia King Deer Cashmere Company Limited Chairman Zheng Haosheng's "Africa" business experience  

An African proverb says: "One hand cannot hold a gourd pot on its head." We in China also have a proverb that says, "Brothers of one heart can break gold." In today's world, mankind is facing more and more global challenges, and it is more necessary than ever for China and Africa to share the same destiny and overcome the difficulties together. --Mr. Zheng Haosheng

At the end of 2020, China and the African Union signed the Cooperation Plan between the Government of the People's Republic of China and the African Union on Jointly Promoting the Construction of the Belt and Road, which will effectively promote the in-depth docking of the Belt and Road Initiative and the African Union Agenda 2063, opening up a new chapter for China and Africa to jointly build the Belt and Road in high quality. It will open a new chapter for China and Africa to jointly build the "Belt and Road" in high quality. Over the past 20 years, China-Africa trade has doubled 20-fold, and the stock of direct investment has increased 100-fold. Even in 2020, with the epidemic raging globally, China's direct investment in Africa remains basically the same as in 2019. According to the Ministry of Commerce, by the end of 2019, about 3,400 Chinese companies had invested and prospered in Africa, 70 percent of which were private enterprises. Chinese private enterprises' direct investment in Africa is very strong.

Business is a language and trade is a culture. Chinese businessmen rely on the entrepreneurial spirit and cooperation concepts inculcated by Chinese culture to communicate with the world and realize win-win situation. Ltd. has invested in Madagascar, an island country in Africa, for 24 years. From the perspective of Chinese private enterprises, the story of "King Deer" has well practiced what Chinese President Xi Jinping has said in his speech at the Boao Forum for Asia in 2021: to build the "One Belt, One Road" together. "The pursuit of development, win-win situation and hope.

A few days ago, the People's Political Consultative Conference reporter interviewed Zheng Haosheng, vice president of the China-Africa Private Chamber of Commerce and chairman of Inner Mongolia King Deer Cashmere Co.

The "King Deer" of the original intention

Reporter: King Deer cashmere early investment in Africa, why did you choose?

Zheng Haosheng: King Deer cashmere development has experienced the start-up phase "introduced", and later "go out". King Deer cashmere is built in 1985, has introduced Britain, Japan and other eight foreign-funded enterprises into the company, the king of deer, to 1996, the company's output has reached 2 million pieces. Our products hit the international market, but at that time China did not join the WTO, cashmere products export quota system, the national cashmere products export quota are not enough for us to use. Insufficient quota became the bottleneck of the company's development. To this end, the company has sent people to visit foreign countries, research, and finally selected the target of the Republic of Madagascar, Africa. 1997 we established the first King Deer cashmere overseas factory and sales centers in Madagascar.

The reason why "King Deer" chose to invest in Madagascar to build factories, mainly due to its unique natural environment: First, a suitable climatic environment, temperature, humidity, fully in line with the conditions of cashmere knitting products, the workshop does not need to be heated and air-conditioned, the knitting is not easy to break the threads and flying hair, product quality and stability. Second, suitable fresh water resources. Thirdly, the advantage of labor resources is obvious, and the cost of labor is much lower than the domestic. Fourthly, from the perspective of investment, Madagascar has a superior investment environment: special preferential treatment to enter the European market; preferential treatment to enter the U.S. market for textiles, handicrafts and other items; and it is a member of a number of regional economic commons: SADC Southern African Economic Community, COMESA South-East Cooperation Organization, and COI Indian Ocean Alliance, etc., which provide convenient conditions for attracting foreign investment. Social advantages

Social advantages are mainly manifested in the following: Madagascar's political situation is relatively stable, the social order is generally good, the local people mainly believe in Christianity, the people's morals are kind and simple, especially the deep friendship between the Chinese and Malagasy people established over a long period of time, which lays a solid foundation for us to get along harmoniously; Malagasy policies are more transparent, and the labor law, investment law and other legal documents have been issued.

As industry moves forward, people's heart should come first

Reporter: China and African countries language barrier, different cultures, "King Deer" how to solve the problem of localization of human resources?

Zheng Haosheng: "King Deer" overseas factories must take the road of localization. Madagascar living in poverty, labor quality is very backward. King Deer company in Madagascar to build a factory in the early stage, the highest level of education of the local staff is junior high school education, many people only elementary school level. Newly recruited workers have no concept of textile technology, everything has to be trained from scratch.

At the beginning of the factory, due to cultural differences, the departure rate of local employees was quite high, and we had to recruit, train, and employ them almost every year, and the cycle was repeated several times. An employee of the company who went to Madagascar from China told me that he was recording every time he communicated with the local staff one by one, and through such a reserve of details to understand the local customs and habits and integrate into the local staff, not only to impart technology to them, but also to influence their concepts.

Now, the number of technical production, quality, business and financial management personnel dispatched by the head office has been reduced from more than 150 in the early days to 50 now. Nowadays, the local employees not only master the textile operation skills, most of the local employees' education level has also improved significantly, some of them can even use Chinese to communicate briefly, and some of them have already joined the company's technical and management team. In these 24 years, we have trained a large number of local middle and high level enterprise leaders, and there are also a large number of master's degree and doctor's degree who studied in France and the United States working in King Deer Company. Their opportunities and treatment, responsibility and ability have been equalized without any difference. Through the moderate localization of management personnel, King Deer Madagascar Company has established harmonious labor relations and public relations.

I have always believed that the friendship of nations lies in the affinity of people, and the affinity of people lies in the affinity of hearts. Although Africa is backward, but the African people are very good, as long as you and his heart, he will give selflessly. "King Deer" has built a factory in Madagascar for 24 years, providing nearly 10,000 local jobs every year without a single dispute or accident.

Together with other textile industries, we have created 1/3 of Madagascar's industrial output value, and endeavored to promote the development of the local economy; we follow the standards of the European Union and the United States in terms of human rights and environmental protection.

Our camaraderie can be truly answered by our African employees. Some employees are two or three generations of a family working in our factory, and most of the residents in the neighboring communities are employees of King Deer.In the early summer of 2019, I went to the company to inspect the work, when many African employees were pulling me for a group photo.We didn't speak the same language, but I could see their love for the company from their friendly and joyful smiles.

The staff translated the words of an African employee, which roughly meant that he was very proud of working in King Deer, and the company allowed his family to have food, clothes and schooling for his children. People around him are envious of him, he hoped that "King Deer" orders more, the factory has been running.

I am also quite touched. Enterprise globalization is to go out of the country, do the difficult things that others don't want to do, do the good things that others can't see, so as to benefit the world, benefit the world. People's hearts are connected, and righteousness and profit are taken into account. Only with such a concept, Chinese private enterprises can better take root in Africa and grow a "big tree" of industries that can benefit China and Africa.

Epidemic test of true friendship

Reporter: Since last year, the new crown pneumonia epidemic ravaged the world, Africa's anti-epidemic situation is particularly severe. "King Deer" in Madagascar factory situation?

Zheng Haosheng: 2020 at the beginning of the Spring Festival, the epidemic spread in China, when Madagascar is still a safe place, we and Madagascar emergency contacts, procurement of 250,000 valuable war protective masks want to be shipped back to China as soon as possible to donate to the relevant departments. When the government of Madagascar was informed of the situation, it instructed the Customs and other relevant departments to make special arrangements and release the goods immediately. 250,000 masks finally arrived at the front line of epidemic prevention in the motherland after traveling over thousands of miles.

In May, Madagascar was not spared from the global epidemic outbreak. Our company decided to donate the renovated, remodeled and landscaped pharmaceutical factory to the government of Madagascar free of charge, which is now the only pharmaceutical factory in Madagascar. The President of Madagascar highly appreciated King Deer's donation, and he praised Chinese enterprises as the practitioners who were brave enough to enhance the traditional friendship between China and Africa, and made outstanding contributions to the anti-epidemic work in Madagascar.

Later, we also donated 50,000 masks for the local medical institutions, donated more than 40 cubic meters of wood for cooking for the local homeless people's rescue point; now, King Deer Company purchased 110,000 KN95 masks in China and sent them to Madagascar to help Madagascar's fight against the epidemic in a small way.

African proverb says: "One hand cannot put a gourd pot on the head." We also have a Chinese proverb: "Brothers working together can break gold." In today's world, mankind is facing more and more global challenges, and it is more necessary than ever for China and Africa to share the same destiny and overcome the difficulties together.

In the midst of the epidemic, 95% of our local employees have signed a request to work voluntarily while protecting themselves. Our overseas employees and the company is a common destiny of brothers, but also comrades in arms. 2020, King Deer company more than 7000 employees did not have a case of infection, the successful completion of the 2020 production task.

Africa big market in China's opportunity

Reporter: Africa is an indispensable and important part of the "Belt and Road" cooperation, at present, more than 40 African countries and the African Union Commission have signed the "Belt and Road" cooperation documents with China, accounting for about 1/3 of the total number of countries and international organizations that have signed such documents. On January 1 this year, the launch ceremony of the African Free Trade Area (FTA) was officially launched online. Analysts believe that although the construction of the African Free Trade Area faces many challenges, it highlights the determination of African countries to promote economic transformation, and is expected to enhance the resilience of Africa's development. How do you see the opportunities for China in the big African market?

Zheng Haosheng: According to the forecasts of the World Bank and the United Nations Conference on Trade and Development (UNCTAD) and other organizations, with the full implementation of the continent's FTAs, the total exports of the African region will increase by nearly 29 percent by 2035, with intra-regional exports growing by more than 81 percent. Africa as a whole will accelerate its industrialization process, enhance its global competitiveness and attractiveness and better integrate into the world economy.

We can say that China-Africa relations are now at their best in history, and cooperation for mutual benefit and common development is gaining momentum. This is also very favourable to our country's proposal of a double cycle of domestic and international development, making full use of the two domestic and international markets.

As we all know, due to the sharp rise in domestic labor costs and other factors, China's textile industry and Southeast Asia, Africa and other emerging economies, the cost of comparative advantage is gradually shrinking, such as the King Deer of the company such as the typical labor-intensive Chinese textile enterprises "go out" is the general trend. From the competitive development trend, in the future, China's textile needs also need to be imported from less developed countries abroad, King Deer company in this regard is the "first move".

China's investment in Africa is mainly in infrastructure construction, oil and mineral development, weaving industry, financial industry, construction industry, communication technology and other service industries. We are engaged in manufacturing and processing in Africa, and I believe that investment in the field of processing and manufacturing can improve the added value of primary products, create employment opportunities, increase exports and foreign exchange earnings, expand tax revenues and fiscal revenues, as well as transfer of technology, and promote the diversification of the African economy and the process of industrialization, etc., and therefore investment in this field is highly welcomed by African countries.

Africa is an old and "young" land. Of its total population of nearly 1.2 billion, 60% are under the age of 24. Youth means growth and unlimited imagination.

With the steady development of China-Africa economic and trade relations, Africa has become an important node area for the construction of the "Belt and Road", and the promotion of production capacity cooperation between the two sides is the main line of China-Africa economic and trade cooperation in the future, which is also the best opportunity for domestic enterprises to export their advantageous production capacity, and to "go out" to the world. The best historical opportunity for domestic enterprises to export their advantageous production capacity, and let themselves "go out" to the international market. Of course, "going out" also need to master certain skills, in addition to brand and technology, need to do more homework, and the local community for a high degree of integration.