Illustration: Liu Rui/GT

Overseas industrial zones are nothing new. As early as the 1990s, China's pioneer enterprises built industrial zones in Egypt and Cuba. In 2007, the Ministry of Commerce of China called for bids for industrial parks across the globe. In the end, 19 were chosen in countries like Ethiopia, Cambodia and Nigeria. At the time, the expansion of Chinese enterprises was at its initial stage, so development in industrial zones was slow and on a smaller scale.

Since China launched the "Belt and Road" initiative and the State Council issued guiding opinions on promoting international cooperation on industrial development, the Chinese government has placed enormous importance on the construction of overseas industrial zones.

Industrial zones have become a tool that enterprises utilize to expand to foreign countries as part of the national initiative to encourage overseas expansion. Many Chinese companies that specialize in manufacturing are operating in development zones or special economic zones where they enjoy favorable conditions and are familiar with the production patterns involved.

At the global level, industrial zones are not exclusive to China. Since the 1950s, Ireland, Singapore and other countries have set up modern industrial zones for companies. African countries also had similar projects since the 1970s. But it is China that has made the most successful model in this regard.

During China's reform and opening-up, special economic zones, development zones and hundreds of industrial zones served as the driving force. After seeing China's achievements in economic zones, countries in Africa and Southeast Asia followed suit.

Industrial zones have already been set up in Botswana and South Africa. Mozambique, Angola and Tanzania also made similar attempts. Industrial parks, despite their small-scale investment, can quickly gather resources and provide a favorable platform for the production of foreign firms. As industrialization advances, industrial parks can collect resources from both upstream and downstream on the industrial chain.

These industrial zones can also become the main driving force of urbanization. Mega cities such as Shanghai (Pudong) and Shenzhen were developed from industrial parks which later evolved into modern metropolises.

From initial development to industrialization and modernization, the pattern of industrial parks holds huge potential. But investment in industrial parks in Africa is at a very initial stage. This is a slow investment process with huge output and delayed returns, given the continent's weak industrial base.

Coordination among Chinese developers, enterprises and African governments poses another challenge. Industrial parks are long-term investment projects. Issues such as land property rights, leasing rights, what industries the parks plan to develop and future objectives require careful research.

The author is a professor of Tsinghua University and deputy director of the Carnegie-Tsinghua Center for Global Policy. The article is an excerpt of his speech at the Jiangsu-Southern African Development Community Forum of Investment and Development recently held in Nanjing. opinion@globaltimes.com.cn