China – Africa relations over the past years have yielded fruits, as the latter’s foreign direct investments in the African continent has changed the economies of many countries. An article published recently revealed that the East Asian country is investing ten times more in Africa than in the United States of America. Chinese amount of investments have raised eyebrows from the West, seeking clarity on their motives.
China – Africa Development Fund in Africa, commonly known as CAD has exceeded over $10 billion. The figure accounted for China Development Bank’s (CDB) financial investment in Africa to over $50 billion. Chinese companies have found a breeding ground to open businesses and create employment opportunities aided by the efforts of African Governments to lure the investors in their states. Business incentives and conducive business environments have attracted them to carry out economic activities. The availability of potential market and labor force have been other factors that have promoted the entrance of Chinese firms.
CDB spokesperson and chief economist, Liu Yong said the world’s largest development finance institution had financed over 500 projects in 43 African countries, with the financial injection cutting across the various economic sectors. The finances have seen the construction and development of infrastructure, support of the mining industry, industrialization, and telecom added Liu Yong.
Chinese firms have undertaken major projects in Africa especially in the infrastructure sector, building better road networks for efficient transportation and railway connections to enhance trade. Their technological advancement has strengthened the China – Africa partnership as they jot down deals to ease their operations.
Early in September, President Xi Jinping announced that China would be providing $60 billion in financial support to Africa. The funds will come in grants, loans, and credit lines. However, pundits have argued that the financial aid could prove to be a heavy burden to nations with an unsustainable level of debts.