Advertisement
‘New normal’: Chinese revenue from African projects is in decline, and the situation is unlikely to change
- Revenue earned by Chinese firms from engineering and construction works in Africa has dropped by 31 per cent since the peak of lending in 2015
- Observers say factors including a more conservative approach from lenders and a falling number of projects are behind the decline
Reading Time:4 minutes
Why you can trust SCMP
1
With lenders tightening their purse strings and the number of projects in decline, Chinese revenue earned from engineering and construction works in Africa has fallen by more than 30 per cent since 2015.
Now observers say this is the “new normal”.
It was a different picture almost a decade ago when Chinese companies earned more than a third of their total overseas revenue from Africa. That is certainly not the case today.
According to data from the China Africa Research Initiative (CARI) at Johns Hopkins University’s School of Advanced International Studies, engineering and construction contracts in Africa earned Chinese companies US$37.84 billion in gross annual revenues in 2022, which was a 31 per cent drop from US$54.78 billion generated in 2015, the year lending to Africa was at its highest.
Africa made up 19.4 per cent of global revenue for Chinese companies in 2022, CARI said, almost halved from its 2010 peak of 38.9 per cent.
Excluding small businesses, it is estimated there are more than 10,000 state-owned and private Chinese companies currently operating in Africa. Most of these moved to the continent during former Chinese president Jiang Zemin’s push for businesses to “go out” in search of new markets and raw materials at the beginning of the century.
Between 2000 and 2022, China pledged a total of US$170.1 billion to African countries – money that went into building mega projects, including ports, hydroelectric dams, highways and railways.
Advertisement