"Chinese investment in residential construction in Africa: The role of ABTs" presentated by Dr Mi Zhou at the African Union for Housing Finance (AUHF) Conference, November 17-18, 2014 in Cape Town. 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 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. Chinese contractors have accumulated quite some experiences in ABT field, which would be quite helpful for the building in Africa. With rapid development, there is huge space for building in Africa, ABT should be considered if applicable. Key message of the presentation: • Sino-African cooperation in building has quite some space • China has quite some experiences in ABT • ABT should be important when considering the different factors Dr Mi Zhou is the Deputy Director of the Institute of World Economy, CAITEC. He is a Senior Research Fellow. He has published more than 200 articles and books within his research fields on Outward Investment, Contracting and Trade in Services. He finished his post-doc research in Fudan University and visited Stanford University. His presentation sponsored by the Africa-China Urban Initiative (http://urban-africa-china.angonet.org). http://www.sbs.co.za/auhf2014/

1. Chinese investment
in residential
construction in Africa:
The role of ABTs
Dr. ZHOU Mi
Chinese Academy of International Trade
and Economic Cooperation(CAITEC)

3. 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.

4. 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

5. China’s Outward Investment in Real Estate in Africa
0.5 3.7
11.3
54.0
33.3
23.9
83.9
49.5
123.5
57.8
140
120
100
80
60
40
20
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$million
Estimation of China’s Investment flows to Africa in Real
Estate

6. Estimation of China’s Investment stocks
in Africa in Real Estate
4.1
41.7
170.8
68.8
202.9
173.8
343.6
298.8
611.4
391.4
700
600
500
400
300
200
100
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$million

7. Factors to be valued for building
technology
TIME
ABT
COST
MATU
RITY
COMPATI
BILITY
MAINT
ANCE

8. 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?

9. Instant Building
• Instant Building – combination of
manufacture and construction
• Advantage of prefabrication
o 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

10. A WORKERS’ CAFETERIA

25. HONGKONG-ZHUHAI-MACAO BRIDGE

26. CONCRETE CASTING

27. 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.

28. Planning model of the city

29. 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.

30. 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

31. 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

32. Contacts:
Dr. Mi Zhou
Senior Research Fellow
Deputy Director
Institute of World Economy, CAITEC
Ministry of Commerce, PRC
DATAMASTER@163.COM