Building Bridges: New WB Report highlights China in Africa
By the end of 2007, China has provided US$ 3.3 billion towards the construction of ten major hydropower projects throughout the region. When completed, these projects will result in an additional 6,000 megawatts of electrical capacity, increasing the total hydro power capacity in the region by 30 percent. Further, the World Bank study found that China has invested around US$ 4 billion rehabilitating 1,350 kilometres of railway lines and constructing more than 1,600 kilometres of new railroad. In addition, China has supplied US$ 3 billion in Information and Communication Technology equipment for the construction and development of “backbone” infrastructure throughout the region.
As evident by the seven fold increase in infrastructural financing to the region, China’s engagement within Africa continues to grow. According to the World Bank, in 2006 China imported natural resources worth more than US$22 billion, with petroleum accounting for 80 percent of this trade. At present, China depends on Africa for 30 percent of its oil imports, 80 percent of its Cobalt imports and 40 percent of it manganese imports.
An interesting finding of the World Bank study is that only 7 percent of Chinese infrastructure financing is directly linked to natural resource exploitation. Rather, the World Bank posits, most of the financing is directed to broader development projects. However, the fact still remains that China will tie access to natural resources, mainly petroleum, timber and minerals, directly to infrastructure contracts. China is gaining access to valuable mineral resources through package deals that link resource extraction to infrastructure contracts. Further, China’s emphasis on bolstering the region’s transportation sector goes a long way towards increasing the efficiency of resource extraction.
The World Bank study again raises valuable questions as to the merits of China’s involvement on the continent. Although the correlation exists between a rise in regional GDP and infrastructural development, it is important to note that not everybody is happy with China’s involvement. Chinese firms contracted within the region often use Chinese labour and have been criticised for flouting labour and regulatory laws of the host country. This has proven divisive and a flash point for conflict as is evident by the rise of protest against Chinese firms operating on the continent.
However you view China’s engagement on the continent, the fact remains that their level of involvement is both growing and deepening. Through providing valuable infrastructural development, China continues to bolster its soft power throughout the region, winning the hearts and minds of Africa’s leaders one contract at a time whilst bolstering the regions continued strong level of economic growth and development.
Visit Consultancy Africa Intelligence
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