China's price and pace

Throughout SSA it's likely to be a Chinese contractor and/or supplier that is the one to beat.TAZARA train station in Ifakara, a small rural town in the Kilombero district, Morogoro region, south central Tanzania

 

From a package deal to rebuild Nigeria's oil refining industry to a bypass round the east of Nairobi, China crops up whenever new construction business is discussed in Africa. Its hardly surprising that Chinese firms are the most powerful competitors for infrastructure, low-cost housing and other schemes in South Africa these days; China now accounts for half of the world's total supply of the most critical commodity, cement. And it can supply at that legendary 'China price' nearly all the hardware, materials and know-how needed along with, as on Angola's rebuilt rail line – and following the example of the much earlier TAZARA - the necessary hard-working labour teams too.

 Thus a major rural electrification programme is being carried out in Chad by CMEC – and yet another oil refinery is being built there on a package deal basis by specialised Chinese contractors too. Cement plants incorporating Sinoma Engineering technology are being put up around the continent. It really is no wonder China is the number-one trading partner of so many sub-Saharan countries these days.

TAZARA, Tanzania's railway networkAbility to supply finance and organised labour deals on a package basis without worthy social-cost strings is one of the main reasons for this, partly because Beijing can bundle funds together with the award of development contracts without going through the lengthy Western tendering process. And the solution is often accompanied by awarding of concessions for raw materials access.

Willingness of individual Chinese citizens to live with the people here, develop business networks and invest in SME ventures like poultry production in Zambia is another.

And a third is the sheer appropriateness of Chinese low-cost construction techniques. China itself is going through a huge building boom of its own, fuelled by double-digit growth and US debt and slowed only by its insatiable demand for energy. Far more highways, railways and general infrastructure developments are now taking shape in China than anywhere else. There exists a vast all-forms supply industry that produces nearly all the necessary materials and machinery; only the very latest developments in contractors plant being lacking. With their Chinese-made laptops Chinese contractors can plug in to all this and use their near-impenetrable business networks, rather than the costly trade fair system that rivals rely on, to access and put it all together rapidly. They are not afraid to put their boots on the ground, live off local supplies and get on with the job, without air conditioned  accommodation and free flights home being available. And customers are happy with the price and the pace.

We already have Chinese trucks delivering on South Africa's roads, and upmarket Chinese-designed housing schemes are now literally springing up around cities like Lagos. Chinese process technology is being used to refine more and more of Africa's minerals including oil. And much more Chinese earthmoving equipment will soon be seen in Africa just as soon as demand at home allows its release. As the paid-for items alongside this report show it really is a case of China rising.

Alain Charles Publishing, University House, 11-13 Lower Grosvenor Place, London, SW1W 0EX, UK
T: +44 20 7834 7676, F: +44 20 7973 0076, W: www.alaincharles.com

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