China-Africa Economic and Trade Cooperation (2013)(5)

IV. Supporting African Infrastructure Construction

Infrastructure construction is a starting point for improving the investment environment and people's livelihoods in Africa, and is of great importance for poverty reduction and development on the continent. The Chinese government encourages enterprises and financial institutions to participate in African infrastructure construction, including transportation, communications and electric power projects, in a variety of different ways. In 2012, Chinese enterprises completed construction contracts worth US$40.83 billion in Africa, an increase of 45% over 2009, accounting for 35.02% of China's overseas contract work completed. Africa has been China's second largest overseas contract market for four successive years. Capital, equipment and technologies from China have effectively helped reduce construction costs for African countries and, as a result, their infrastructure situations have gradually improved.

Chinese enterprises have built numerous city roads, expressways, flyovers, railways and ports in Africa, effectively improving traffic conditions there and enhancing economic and trade development and personnel exchanges between African countries. In Angola, Chinese enterprises undertook the contract for a project that involved repairing a railway running from east to west through the country.

Chinese communication enterprises have participated in the construction of communication facilities in Africa, such as backbone fiber-optic transmission networks, fixed-line telephone lines, mobile communication and Internet facilities, expanding the coverage of Africa's telecommunication network, raising the network's performance quality and reducing communication costs. A contract to build a fiber-optic transmission backbone network in Tanzania was also taken on by Chinese enterprises. The network will cover major provinces and cities in Tanzania, link it with six neighboring countries and connect it to seabed optical cables in East and Southern Africa. After the network is completed, there will be three backbone loops, one each in northern, southern and western Tanzania, and eight international transit links, making communications of East Africa more integrated.

China has also worked closely with African countries in building hydropower stations and power grids, alleviating power crises that have long plagued some African countries. In 2010, Chinese enterprises started to build the Malabo Gas Plant in Equatorial Guinea. After the plant is completed, the country will have a complete power supply system, from power generation to power transmission and power transformation. This will improve the power supply conditions of Malabo City and Bioko Island while promoting agricultural irrigation and ecological tourism in surrounding areas.

The Chinese government and Chinese financial institutions have offered a great number of concessional and commercial loans to Africa for its infrastructure construction. From 2010 to May 2012, China approved concessional loans worth a total of US$11.3 billion for 92 African projects. For example, the Addis Ababa-Adama Expressway of Ethiopia and the Kribi Deep-water Port of Cameroon were both funded by concessional loans from China. Some of China's main commercial banks have also started buyer's credit businesses in Africa, supporting the power grid in Ghana, hydropower stations in Ethiopia, a west-east expressway in Algeria, and other projects.

While undertaking infrastructure projects in Africa, Chinese enterprises have paid attention to localized operation and management styles, and taken an active part in programs benefiting local people. For example, large Chinese communication companies in Africa have raised their localization rate to above 65%. They have also cooperated with 1,200 local subcontractors, indirectly providing more than 10,000 job opportunities. In Zambia, Chinese enterprises have repaired roads, hospitals and houses of some mines, and donated sports facilities for communities and money for charity activities, making positive contributions to local development.

Infrastructure construction is a significant part of Africa's further economic and social development. China will deepen cooperation with Africa in transportation, communications and other infrastructure fields to improve people's livelihoods, steadily push forward Sino-African trans-national and trans-regional infrastructure construction partnerships, and enhance exchanges and cooperation in the field of regional integration so as to help Africa improve its capacity for integrated development.