Infrastructure Lessons from China
For China, infrastructure has facilitated economic development, and vice-versa. What can Africa learn from the important role of infrastructure in China’s economic development?
Yao Guimei, a researcher on Africa studies at the Chinese Academy of Social Sciences, shows how Chinese infrastructure reform has helped boost economic growth and helped it lift more than 800 million people out of poverty.
Specifically, the research shows that public infrastructure facilities can help improve people’s living conditions, even in poverty-stricken areas, and lead to better productivity.
China includes and prioritises infrastructure construction in its five-year plans, with different characteristics in different periods of economic development. Infrastructure is only second to the development of agriculture and township enterprises.
The rapid expansion of transportation and communications networks has stimulated the Chinese rural economy. Africa faces a similar challenge to connect its rural communities to power grids and 4G Internet networks and improve highways to advance trade development.
Furthermore, the improvement of Chinese water conservancy facilities has helped prevent floods and minimise the damage caused by natural disasters, promoting agricultural development.
African countries can learn from China’s experiences to develop and improve their infrastructure. The African Infrastructure Development Plan (AIDP) for 2012-2020 includes transportation, electricity and information networks, and cross-border water management.
However, the African governments have to play a leading role in infrastructure construction to ensure successful implementation nationwide. African countries need to reflect on how to manage the scale and speed of infrastructure construction.
Diverse investment entities and broad financing channels for infrastructure construction need to be available. Infrastructure construction has gradually evolved into a diversified investment model based on finance, credit, capital markets, and foreign investment.
China has gradually introduced diversified investment and financing models such as build-operate-transfer, asset securitisation and public-private partnership. These models have played a big role in some of China’s important infrastructure projects.
China also follows the principle of marketisation by charging fees for the use of public goods to share construction operation costs and promote rational and effective allocation of resources. For example, the fees collected for using bridges, tunnels and ferries are used to repay construction loans.
African countries can use a similar approach and learn from China’s infrastructure development to advance their economic development.
Originally published in China Daily (edited).