The China Fac­tor

Business Traveler (USA) - - SPECIAL REPORT -

“For the next 20 years, Africa will be the sin­gle-most im­por­tant busi­ness des­ti­na­tion for many Chi­nese mega-cor­po­ra­tions.”So says Zhao Changhui, chief coun­try risk an­a­lyst for the Ex­port-Im­port Bank of China (Ex­im­bank).

The same could be said of the last ten years as well: A sig­nif­i­cant amount of the growth and in­vest­ment in Africa can be at­trib­uted to huge amounts of for­eign direct in­vest­ment (FDI) from China, whose con­tin­ued in­ter­est in fi­nanc­ing in­fra­struc­ture projects through­out the con­ti­nent – all while pur­chas­ing raw re­sources – shows no sign of abat­ing.

Ac­cord­ing to FDI In­tel­li­gence, a di­vi­sion of the Fi­nan­cial Times, China’s FDI in Africa to­taled $87 bil­lion in 2014 – a 64 per­cent in­crease year over year. Cash loans from the East are also be­ing pumped into in­fra­struc­ture de­vel­op­ments within Africa, with Ex­im­bank pro­vid­ing the nec­es­sary funds for projects that meet both par­ties’in­ter­ests – es­sen­tial roads for the lo­cal pop­u­la­tions, and easy ac­cess to and from min­ing and other busi­ness cen­ters for Chi­nese com­pa­nies.

Such a close trad­ing part­ner­ship means Chi­nese com­pa­nies get first dibs on Africa’s rich com­modi­ties, which in­clude oil, tim­ber and cop­per. In­fra­struc­ture projects also pave the way for Chi­nese com­pa­nies to se­cure lu­cra­tive ser­vice con­tracts in many African coun­tries, which in turn at­tract a grow­ing num­ber of cor­po­rate trav­el­ers and in­creased travel de­mand.

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