Resources for Infrastructure: The Sustainability Dynamics of Sino-Afro trade
The Resources for Infrastructure (RFI) deal is quite typical in the context of Sino-Afro cooperation. This trade structure is ideal because China and Africa have complementary competitive advantages – China has strong construction capabilities, but is resource scarce while Africa is resource abundant with a severe infrastructure deficit.
Despite the magnitude of China’s investment across Africa, in depth information on this activity is relatively scarce and Sino-Afro trade still largely remains opaque. This report seeks to analyze the paramount nature of Sino-Afro trade: Resources for Infrastructure (RFI). In its simplest form, China helps fund and construct infrastructure projects in return for natural resources. We conclude that the benefits that arise from China’s investment in Africa have helped stimulate economic growth. Nonetheless, it is necessary for Chinese and African officials to address sustainability issues that are present in the trade model.
The report introduces China’s outward foreign direct investment policy and the nature of RFI model, offering recommendations for sustainably strengthening the Sino-Afro trade model by concluding three cases.