Chinese Firms Surge into Africa in Search of Customers, Contracts, Jobs

China Merchants Port Holdings has invested $400 million to build China’s first port in Africa. The massive project, now under construction in Djibouti, will serve China’s commercial and naval ships and deepen China’s economic and security interests in the African continent. As well, the project will create jobs for Chinese engineers and local labor and help Chinese construction companies compete for contracts in the world market. Chinese firms earn $50 billion a year building ports, highways, and airports across Africa, according to the China Africa Research Initiative at Johns Hopkins SAIS.

The project illustrates how China’s economic interests in Africa have shifted from primarily resource extraction to feed its factories to direct investment and money-lending for infrastructure projects. As China’s economy has evolved from basic manufacture to high-value manufacturing and services, and as median incomes in Africa have risen, Chinese firms increasingly view Africa as a market for their construction services and exports.