The China Factor
“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.