Chinese investment

in residential

construction in Africa: The role of ABTs

Dr. ZHOU Mi

Chinese Academy of International Trade

and Economic Cooperation(CAITEC)

Background

• In the past year, economic situation has changed a lot,

developing countries are facing much more challenges. The

Sino-African relationship is getting stronger.

• Real estate is becoming more and more important in Chinese

outward FDI, which is 3.67% of all in 2013, reaching the peak

high in the past decade. As to the real estate industry, more

capital has flown into the developed countries for long-term

investment.

• Africa is resource-rich and material-poor and it needs more

houses to meet different kinds of demand, based on climates,

habits and income, while in most cases, land is not the first

factor to consider. With rapid development, there is huge space

for building in Africa, ABT should be considered if applicable.

Outlines

• China’s Outward Investment in Real Estate

• Factors to be valued for building technology

• China’s practices and experiences in ABT

• Challenges in Africa for Chinese companies

to apply ABT

• Suggestions

China’s Outward Investment in Real Estate in Africa

0.5 3.7

11.3

54.0

33.3

23.9

49.5

83.9

57.8

123.5

0

20

40

60

80

100

120

140

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

$m

illi

on

Estimation of China’s Investment flows to Africa in Real Estate

Estimation of China’s Investment stocks

in Africa in Real Estate

4.1 41.7

68.8

170.8

173.8

202.9

298.8

343.6

391.4

611.4

0

100

200

300

400

500

600

700

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

$m

illio

n

Factors to be valued for building

technology

ABT

TIME

COST

MATURITY

MAINTANCE

COMPATIBILITY

China’s practices and experiences in

ABT

• ABTs are more and more combined to meet user’s demand.

• Green Building: use environment-friendly construction

material to improve the energy efficiency and make use of

different energy like Solar, Wind and Terrestrial heat, etc.

• Ecological Building: create natural indoors environment with

high technology, making people more comfortable in the

building. Further to pursue a balance of taking from and

paying back to the nature.

• Intelligent Building: use modern control, communication and

intelligent technology to provide people more comfortable and

efficient environment in the building, which can satisfy

ordinary need and deal with some emergency automatically.

• And? Quicker? Bigger?

Instant Building

• Instant Building – combination of

manufacture and construction

• Advantage of prefabricationo Short term of building – 30 story hotel built over 15

days（183,000 square feet）

o Better quality guaranteed – all steel concrete

structure, fewer bias with 90% manufactured in the

factory, less supplementary building materials

o Less affection to environment – no welding, no dust,

no water

o Lower cost – up to 30% cheaper than conventional

building

A WORKERS’ CAFETERIA

HONGKONG-ZHUHAI-MACAO BRIDGE

CONCRETE CASTING

CHINA-SINGAPORE TIANJIN ECOCITY(CSTE)

• CSTE was approved by NDRC of China to be

the first national demonstration area on green

development. It is also the first eco-city built by

the cooperation between countries in the world.

• Started in Sept. 2008, the area is 30 km2 to meet

the living demand of 350,000. The planned

building term is 10-15 years. After 6 years

building, green industries have been established

while public infrastructure completed and more

than 20,000 people living there.

Planning model of the city

Why is it important?

• China has so many people together with nonsufficient

land and quite serious environmental problems. As the

expansion of cities, we need to face and deal with more

and more challenges.

• Continuous urbanization requires more space for people

living together, while the manufactures, agriculture and

cities are competing with each other for more land.

• This city was build on the deserted land with 1/3 from

Saline, 1/3 from deserted salt farm and 1/3 from polluted

water. They had quite some experiences for dealing with

the polluted water, mud and which can also be used in

other areas.

Challenges in Africa for Chinese

companies to apply ABT

• Market needs to be identified according the economic

stage, and trend of development, and industries

• ABT-related standards have not been established or

more affected by western countries

• Supporting infrastructure like transportation,

telecommunication or even municipal facilities are not

good enough for ABT

• Few contractors and designers can operate ABT, not

only because of few practices, but also due to the lack of

supporting industries here in Africa

• ABT need continuous maintenance services which are

crucial and not easy for Africa

Suggestions

• Technology is important but not everything. The benefits of

ABT need to be acknowledged by more stakeholders

• Standards can be formulated earlier than practice, in whose

process both the western, eastern and African ways should

be considered together

• Planning is important for ABT, which can be cooperated

discussed by host country and experienced experts

• Examples need to be made for others to follow in the cities

with more urgent demand, even more sustainable

• More finance could support the use of ABT more

• Risks or potential risks can not be ignored when apply

ABTs

Contacts:

Dr. Mi Zhou

Senior Research Fellow

Deputy Director

Institute of World Economy, CAITEC

Ministry of Commerce, PRC

DATAMASTER@163.COM