Future-proofing Africa-China infrastructure cooperation

This policy brief examines ESG implementation in Chinese-led infrastructure projects in Africa and Southeast Asia. It identifies key challenges including lack of transparency in loan contracts, weak domestic regulatory environments in recipient countries, and inadequate planning for long-term local capacity and land acquisition. The document recommends that the AU and ASEAN create joint platforms for ESG standards, that recipient governments increase transparency through the publication of loan contracts, and that local capacity building be prioritized to ensure project sustainability.

• China has shifted its infrastructure funding strategy in the Global South due to the COVID-19 pandemic and the Ukraine crisis, which increased the risk of debt distress. This shift involves reducing funding for large-scale projects, focusing on smaller projects, and adopting innovative public-private funding models.
• Chinese contractors have historically followed the 'host country principle', conforming only to the recipient country's norms. However, domestic ESG reforms in China, including President Xi Jinping's 2021 commitment to stop funding transnational coal power projects and norms from the Ministry of Commerce and the Asian Infrastructure Investment Bank, have improved transnational ESG implementation.
• Weak domestic financial governance in recipient countries often leads to opacity in loan negotiations and tender processes, which damages public confidence and the reputations of both Chinese contractors and recipient governments.
• The strength of a recipient country's regulatory environment directly impacts ESG outcomes. For example, while both Indonesia and Zimbabwe opted for Chinese-led coal-fired power, Indonesia's stronger regulatory environment limited the environmental impact, whereas Zimbabwe's low levels of government standard-setting resulted in poor ESG standards.
• Lack of transparency and coordination in host governments has led to environmental and social damage. In the cases of Lamu Port in Kenya and Kuantan Port in Malaysia, damage to fisheries and marine environments harmed local livelihoods and, in Lamu's case, threatened a World Heritage Site, leading to community resistance like the 'Save Lamu campaign'.
• Sustainability of infrastructure is threatened by inadequate planning for long-term impacts, specifically regarding local capacity. Research on ICT projects in Tanzania and Cambodia found that Chinese companies make more effort to use local labour in Southeast Asia than in Africa, which hinders local capacity building in the latter.
• Land acquisition and community relocation for mega-projects often cause controversy and reputational damage for contractors, even when the responsibility lies with local actors, as seen with the Standard Gauge Railway in Kenya.
• To improve ESG outcomes, the document recommends that the AU and ASEAN establish common dialogue platforms to share ideas and articulate joint ESG project standards. Additionally, recipient governments should normalise the publication of loan contracts and establish mid-process reviews involving civil society.

APA

South African Institute of International Affairs (2022). Future-proofing Africa-China infrastructure cooperation. https://saiia.org.za/research/future-proofing-africa-china-infrastructure-cooperation/

Chicago

South African Institute of International Affairs. Future-proofing Africa-China infrastructure cooperation. 2022. https://saiia.org.za/research/future-proofing-africa-china-infrastructure-cooperation/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Future-proofing Africa-China infrastructure cooperation |date=1 December 2022 |url=https://saiia.org.za/research/future-proofing-africa-china-infrastructure-cooperation/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2022futureproofing, author = {{South African Institute of International Affairs}}, title = {{Future-proofing Africa-China infrastructure cooperation}}, institution = {South African Institute of International Affairs}, year = {2022}, month = dec, url = {https://saiia.org.za/research/future-proofing-africa-china-infrastructure-cooperation/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }