Sunday, 24 November 2013

China to pour US$1 trillion into African investments

China-Africa Cooperation held the 4th Round Table Meeting in Hainan, Nov. 20. (Photo/CNS)
China-Africa Cooperation held the 4th Round Table Meeting in Hainan, Nov. 20. (Photo/CNS)
The Chinese government and state-run banks will offer loans of up to US$1 trillion to Africa until 2025 as the continent emerges as China's newest top destination for investment, according to an analyst with the state-owned Export-Import Bank of China.
At a recent conference in Hong Kong on investments in Africa, Zhao Changhui said his bank would provide between 70% and 80% of the US$1 trillion in loans to Africa.
"For many enterprises in China, Africa is poised to become China's top overseas destination for commercial activities and investments over the next two decades," Zhao stated.
"With US$3.5 trillion in foreign reserves, China should not only buy US debt but should inject its funds into other overseas investments," Zhao said.
The analyst said his bank is seeking cooperation with Africa's infrastructure projects, including transnational highways, railways and airports. He estimated work on a railway network linking various states in Africa would cost US$500 billion.

Jeff Gable, head of the unit of non-equity research in Africa for Barclays Africa Group, hinted at an area that investors might be interested in examining, saying there is a huge need for the electrification of the railway in Africa. The infrastructure is far from complete in Africa, he remarked.
Another area that might draw funding from the Chinese government is the agriculture sector, according to Zhao.
With fertile lands on the African continent, Zhao said he believed cooperation between China and Africa on agriculture may help alleviate starvation in the continent over the next 10 to 15 years.
This view was echoed by Gable, who pointed out that Africa has the potential to grow into a leading global exporter of grains in the next 20 years, with output likely to climb from US$280 billion to US$880 billion during the period.
According to media reports, China Machinery Engineering signed a deal with the government of Equatorial Guinea in October to develop electric grids in the central African state.
Under the agreement, inked on Oct. 14, the Chinese company will build six new grids and expand existing grids in Equatorial Guinea for US$127 million, with construction expected to be completed in 21 months, according to the reports.
Source: WantChinaTimes

No comments:

Post a Comment