China’s audacious infrastructure plans could put a major strain on African economies

China’s audacious infrastructure plans could put a major strain on African economies

It has been described by Chinese president Xi Jinping as the “project of the century”. And the One Belt One Road (OBOR) initiative is certainly ambitious. A massive infrastructural development program that will potentially span 60 countries, and cost an estimated US$5 trillion, it will mean building new rail networks, roadways, and pipelines across Asia, Europe, and Africa.

First proposed in 2013, OBOR is the latest in a line of projects designed to increase China’s economic reach. Though its scale is unprecedented, OBOR’s basic objective is the geographical expansion of Chinese capitalism.

The initiative is part of a massive restructuring of the Chinese economy as the country seeks to move from a “newly-industrialised” economy to a “fully-developed” one. The old drivers of development such as low wage, low-end export manufacturing have been wildly successful. But the system has essentially run its course. Overproduction and cyclical crises have led to social and economic problems such as unemployment, increasing income disparity, and an overheated housing market.

Simply put, capital accumulation and expansion under the old export-oriented model is no longer sustainable. The Chinese economy needs to move towards the production of higher value goods, an expanded services sector, and increased domestic consumption.

OBOR represents the latest, and most aggressive, step in this shift.

From Africa’s point of view, OBOR presents a mixture of challenges and opportunities. Few African leaders made it to the Belt and Road Forum in Beijing earlier this year, and there remain big questions about how the initiative will affect projects throughout the continent.

East African nations such as Kenya, Tanzania, and Ethiopia are seemingly the focus for China. But related projects have popped up everywhere from Cameroon to Namibia and Nigeria.

For many African states, the main question will be how they can leverage the vast sums of money behind OBOR to grow their own economies. They will be wary of an infrastructure heavy agenda resulting in a return to a colonial-style situation in which transport links are simply created to shuttle resources out of the host country, without creating opportunities for growth.

Additionally, OBOR may open up African markets to a wide variety of cheap Chinese goods, undercutting local manufacturers, and stymieing the prospects for large scale industrialisation of their own.

States throughout Africa already have infrastructure projects that they understandably wish to prioritise. Will OBOR interfere with these or cause them to be dropped altogether in favour of Chinese plans?

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thanks to maria for the link..

“A massive infrastructural development program that will potentially span 60 countries, and cost an estimated US$5 trillion, it will mean building new rail networks, roadways, and pipelines across Asia, Europe, and Africa.”

old silk road is the new one belt one road..

“Additionally, OBOR may open up African markets to a wide variety of cheap Chinese goods, undercutting local manufacturers, and stymieing the prospects for large scale industrialisation of their own.”

401

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~ by seeker401 on October 3, 2017.

2 Responses to “China’s audacious infrastructure plans could put a major strain on African economies”

  1. OBOR = ONCE BORROW ONLY REGRET
    https://survivaltricks.wordpress.com/2017/08/24/understanding-foreign-trading-with-china-beware-of-strangers-bearing-gifts/

    • 3. Conclusions.

      1. Present China still hold Han China as its model empire. The future of those weak countries trying to trade with China does not look good.
      2. Foreign trading is a dangerous double sided sword and cannot be left unregulated.

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