Chong Zhang, Chinese investment in energy infrastructure in Ghana: Engine for Development?

Background of the study
          In consequence of the accelerated growth of China's economy over the past four decades and the unstoppable phenomenon of globalisation, an increasing number of Chinese companies have begun to direct their attention overseas, seeking investment and operational opportunities in other countries. This shift in focus has been encouraged by the Chinese government’s ‘Go Global’ policy and the ‘One Belt, One Road’ initiative. These companies are attempting to identify new business opportunities and even establish global business empires. In contrast to the trend of Chinese companies going abroad, the reception of Chinese companies in foreign countries has been mixed. China has focused on providing tangible resources in the form of foreign aid and investment, avoiding direct involvement in the internal political and institutional issues of the countries in which it operates. Some scholars and politicians view China’s overseas aid and investment as a novel form of ‘aid’ and an alternative for recipient countries. Some even posit that China’s approach to foreign aid will eventually supplant the Western model of development assistance. An alternative perspective holds that China's unconditional aid and investment is driven by its own economic interests, which may undermine the framework for improving governance structures in developing countries that Western aid promotes. This approach has even been characterised as a form of ‘neocolonialism’.

The principal focus of this study is the Chinese infrastructure industry in Africa. The significance of the infrastructure industry is manifold. Primarily, it represents the most prominent sector for Chinese investment in Africa, with over 500 Chinese contracting companies engaged in active operations on the continent in recent years. A review of data from the world’s 250 largest international contractors reveals that the share of Chinese contractors in the African market was 10% in 2002. By 2019, this figure had reached 61.9%, indicating that Chinese contractors had become a decisive player in the African market. The latest trend in this industry is the gradual transition of Chinese contractors from the previous EPC+F model (i.e., engineering, procurement, construction plus financing, with the project transferred to the local owner after construction) to a new model, the IICO model (integrated investment, construction, and operation). This new model entails not only construction but also participation in the early planning of the project, equity investment, and responsibility for the day-to-day operation of the project for a period of time after completion.

The unavoidable result of this emerging phenomenon is that Chinese enterprises operating at the local level will engage with a diverse array of local stakeholders at multiple levels. This presents a novel challenge for them and offers a fresh source of inspiration and stimulation for my research. In countries in sub-Saharan Africa such as Ghana, there is an acute need for electricity to facilitate industrial development. However, they are constrained by their own energy structure and construction capacity, and thus require substantial foreign investment in a range of areas, including development, construction, management, and operation. This presents a unique opportunity for Chinese companies.

This study is based on the following core assumptions and analytical approaches: 1) Ghana requires power and the construction of a power plant; 2) Chinese companies are willing to provide and jointly profit from it; 3) A specific demand pattern leads Chinese companies to encompass the entire process of the industry and achieve a long-term presence, independent operation, and dominance in the supply of power as a national necessity; 4) This results in an inevitable and continuous interaction between the companies and the society as a whole. 5) This study attempts to delineate the multifaceted and intricate nuances of the interaction, examining the underlying causes and subsequently analysing the socioeconomic and cultural ramifications, commencing with the respective historical memories of the diverse stakeholders, the prevailing contextual issues, and the specific field.

Objectives of the study
1. to explore the diverse ideas of development between Chinese and Africans;

2. to depict the multi-scalar interactions between different agents within Chinese and Africans.

3. to discover new social science theory from the process of China’s and Chinese’s entry into Africa and contribute it to the global community of knowledge.

Research approach and analysis
This will be an ethnography of infrastructure, which has its conceptual roots in the Enlightenment idea of a world in movement and open to change. This world was conceived as a space where the free circulation of goods, ideas, and people created the possibility of progress. The Chinese power plant in Ghana has been the focus of my research, and I have also developed new field sites in Rwanda, Ethiopia and Egypt through conducting fieldwork in these countries. Concurrently, I will meticulously collate and categorise academic studies, historical documents and media reports pertaining to the countries and regions where the case companies are situated. These will be synthesised with statistics regularly disseminated by pertinent government departments and research institutions to elucidate the historical context, thereby delineating the attributes of the external environment and the characteristics of the parties engaged in the interaction on the ground. In the final thesis, I will synthesise the perspectives of Chinese, Western, and local scholars from diverse disciplinary backgrounds, drawing upon anthropology, sociology, history, and other relevant fields.