Chinese policy makers have a taste for the grandiose. Their most eye-catching plan of late has been the “one belt one road” directive. It aims to build infrastructure links from China to Europe and the rest of Asia, cementing ties with central Asian and Middle Eastern neighbours en route.
Yesterday’s news that state-owned China Railway Construction Corp has signed $5.5bn of contracts in Nigeria and Zimbabwe — following the signing of an even larger one in Nigeria late last year — shows how far this “new silk road” extends.
Last year, China’s government kicked off the plan by pledging $40bn to an infrastructure fund. This month it announced a capital injection of more than $60bn into two policy banks to beef up lending capacity. The sums are likely to grow. This month China promised $45bn infrastructure investment to Pakistan. The appetite is there: Asia alone needs to add $11tn in urban infrastructure by 2030, HSBC reckons. Countries such as Thailand and Indonesia have a shortfall of domestic capital. The former is already working with China on rail plans.