September 2018 – Workers celebrate the completion of the Ngnong Tunnel on Kenya’s Standard Gauge Railway, built by China Communications Construction Company (CCCC SGR Head Office/Facebook)

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German builders fret over China’s dominance in Africa

24 February 2020 | By GCR staff | 1 Comment

Contractors in Germany are considering banding together to compete with Chinese contractors in Africa.

“We need to work more intensively together,” said Hans Joachim Bliss of the Federation of German Contractors (HDB).

“One company can’t compete with a state-owned company from China,” he told Deutsche Welle.

With loans pouring out of China’s Export Import Bank, Chinese companies are building most of the roads, ports, airports and railways across Africa.

In 2018, they accounted for 62% of the continent’s infrastructure market share, Berlin-based European International Contractors (EIC) has calculated.

German contractors complain that they regularly lose bids to Chinese competitors, who can offer bids that are lower by 20% or more because they benefit from subsidies from Beijing and preferential treatment in African countries.

According to the EIC, Chinese companies are often exempt from visa regulations and taxes, as well.

Rankling German builders further, Chinese companies profit not only from Chinese largesse, but European funding as well, as African countries borrow from European and other development banks, such the European Investment Bank and the World Bank, and use these funds to pay Chinese contractors for projects.

“We haven't found the right [Africa] strategy,” said HDB’s Hans Joachim Bliss.

According to Deutsche Welle, the German Foreign Ministry has met with industry representatives met to discuss how they could compete more effectively in Africa.

But whereas the Chinese government actively throws its weight behind infrastructure projects through its Belt & Road Initiative, German policy makers are reluctant to get involved.

“Business cannot be linked to the geopolitical strategy,” Dorothee Schneider, head of the German Economy Ministry’s Subsaharan-Africa division, told Deutsche Welle.

Image: September 2018 – Workers celebrate the completion of the Ngnong Tunnel on Kenya’s Standard Gauge Railway, built by China Communications Construction Company (CCCC SGR Head Office/Facebook)

Further reading:

Straddling the world: Snapshot of China’s command over the global transport infrastructure sector

Chinese giant CREC is preferred builder for Helsinki-Tallinn tunnel