Chinese construction firms changed the way they operate in Africa

Over the past two decades, Chinese construction companies have been a dominant force in Africa’s infrastructure development, largely fueled by substantial financial backing from Chinese banks. Between 2000 and 2019, Chinese lenders committed nearly $50 billion to African transport projects, primarily through development finance institutions. However, since 2019, this funding has significantly dwindled, with only $6 billion allocated to infrastructure projects. Despite this decline, Chinese companies continue to flourish across the continent, maintaining their market leadership in countries like Ethiopia, Ghana, and Kenya. A recent study sheds light on the strategies that have enabled these firms to sustain and expand their presence in Africa. The research, conducted through extensive fieldwork in China, Kenya, and Ghana, identifies three key drivers of their success. First, Chinese companies leverage their ties to the Chinese state to establish and maintain their market presence, particularly in projects aligned with African development agendas. Second, they build trust-based relationships with other companies, governments, and international organizations, enabling them to secure cross-border projects. Third, they cultivate everyday relations with local politicians, officials, and business elites, embedding themselves deeply in local political and business environments. The study emphasizes that while state support is crucial for market entry, it is the firms’ ability to adapt and shift between these strategies that ensures their survival and expansion. This flexibility allows them to compete effectively in international tenders, partner with other multinationals, and adapt to local conditions. The findings also challenge the perception that Chinese companies are mere extensions of China’s foreign policy, highlighting their increasingly independent and competitive behavior. For African governments, this shift presents both opportunities and responsibilities in shaping the role of Chinese firms in their economies. The next phase of Africa-China infrastructural engagement will likely be driven by operational contexts, diverse alliances, and a competitive global market rather than large Chinese loan packages.