Business / Economy

Slowdown in China won't affect its investments in Africa

(Xinhua) Updated: 2016-02-18 11:00

NAIROBI - African countries will continue to benefit from Chinese investments despite an economic slowdown in the world's second largest economy, according to executives.

Mark Smith, Head of Infrastructure & Capital Projects, Deloitte East Africa said that China's status as the biggest lending and trading partner with Africa will not be altered by its current economic slowdown.

"The issue of economic slowdown in China is more about perception than reality. The Chinese mainland is growing at an average of 6-7 percent and the country's outbound investments in Africa and the rest of the world are still high," according to Smith.

Smith was speaking during the launch of the 2015 Africa Construction Trends Report on Tuesday which revealed China has eclipsed traditional donors from the west to become leading financier of the continent's infrastructure projects.

African countries will benefit from Chinese investments in strategic areas like infrastructure, agriculture, tourism and energy production, according to the report.

Smith noted that diversification of Africa's economies, market reforms, political stability and a rising purchasing power among middle classes has attracted investments from China and a host of middle income economies.

"Chinese firms are still keen on investing in Africa as the majority of countries liberalize their economies. Chinese investments are an integral component of the continent's growth agenda," Smith told Xinhua.

He added that China will remain a major source of affordable credit and technology to hasten modernization of Africa's infrastructure alongside development of the nascent manufacturing sector.

"Chinese investments in light manufacturing, transport corridors and agriculture will boost Africa's growth. These investments will not slacken in the face of a slowing global economic growth," Smith remarked.

Disruptions in the global commodities market has affected economic growth in China and emerging markets across Asia, Africa and Latin America.

Executives stressed that China will play a critical role in the efforts to stabilize the global economy.

Gabriel Ouko, the Director of Infrastructure and Capital Projects, Deloitte Consulting Limited said a rebalancing of the Chinese economy will have multiplier effects globally.

"China is the largest market for commodities that mainly originate from Africa. A stable Chinese economy will promote trade and investments in this continent," Ouko said.

China's economy grew by 6.9 percent year on year in 2015, its lowest annual expansion in a quarter of a century. However, such a growth rate still ranks China among the fastest growing economies worldwide.

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