US' new Africa strategy is 'welcomed'

Far from being threatened by new arrivals, Chinese investors say competition will benefit Africans

Chinese contractors remain confident of not only maintaining their market share in Africa, but growing it, despite the recent announcement by the United States of a concerted effort to built their interests and activities in the continent.

Some Chinese companies have told China Daily that they welcome the arrival of the new competition, which they say will be beneficial to Africans.

Early last month, US President Barack Obama made a $33 billion investment pledge to Africa during the US-Africa Leaders' Summit in Washington - which involved talks with some 40 African leaders - a lot of which is meant to improve infrastructure there.

This strategy is in line with the US' stated goal in recent years of "catching up with China and winning in Africa", a move that aims to counter China's growing economic and political influence around the continent.

"We know infrastructure is the key to the future of Africa, so we have been doing this for decades. The infrastructure gap is still huge, so we believe that more competitors will be beneficial to the African people," said Mo Kun, a project manager at China Road and Bridge Corp in Kenya. "We don't feel pressure from increased competition because we have unique advantages."

He said that his company is highly confident about its market share because China and Africa have a robust relationship that goes beyond infrastructure.

"We see other Chinese companies as our main competitors, but we also realize the market is far from saturated, even with new participants from different countries," he said. "Compared with other players, we have a flexible way of operating that is more suited to the realities on the ground in African countries, and our cooperation comes without political or military strings.

"More important, our high-quality work and high levels of efficiency are much appreciated by customers," he said.

The US, along with Sweden, the World Bank and private investors, have so far provided funding for Obama's "Power Africa" energy initiative to $26 billion, a sign of the participants' ambition to take a bigger stake of Africa's infrastructure market.

China has become Africa's top trading partner, with transactions rising from $10 billion in 2000 to $200 billion in 2013. When Premier Li Keqiang visited Africa earlier this year, he forecast that bilateral trade could hit $400 billion by 2020.

During the 2000 to 2013 period, US-Africa trade rose from $50 billion to $110 billion.

"Chinese companies' chief advantage is their rich development experience built up over the past few decades at home. They can offer cost-effective, appropriate investment experience to different places," said Li Jun, the China-Africa Development Fund's Tanzania representative.

He said there are many companies from all over the world building infrastructure projects in Africa. Each has advantages and disadvantages. So it is vital that they all learn from each other to make investment bring benefits to local people.

"It's crucial to make proper plans and strategies when investing in Africa's infrastructure, because different regions of this continent have different on-the-ground realities and demands. Investors should have clear, well-conceived targets to avoid low investment efficiency," he said. "And more important, they should concentrate on supporting Africa's internal capacity to achieve sustainable, high-quality growth."

Cao Min, head of the Chinese desk for Standard Bank Group Ltd in East Africa, has been involved in Africa's infrastructure sector for more than 15 years. Said Cao: "Obama's new Africa strategy is obviously intended to counterbalance China's influence on the continent, but it offers more opportunities than challenges to Chinese companies."

He added that Chinese construction companies in Africa have won many bids under standards set by the World Bank or the European Union, and they will continue winning even as competition intensifies.

"One significant change should be mentioned. Some Chinese construction companies have transformed themselves from pure contractors into investors. So if Americans can help build up the infrastructure network in Africa, it's good for everyone's investment," he said.

China has been developing its infrastructure at a huge cost for about three decades, and it is still building at a fast pace. He said Africa has 54 countries, which means that it still has a lot of potential to absorb more foreign investment in every sector, including infrastructure.

lilianxing@chinadaily.com.cn

(China Daily Africa Weekly 09/05/2014 page19)