China’s Investment Policies

LEA analysis examines China’s investment approach in Niger and Kazakhstan, revealing a pattern of economic engagement that priorities infrastructure development and resource acquisition while often creating challenging dynamics for host nations. The evidence suggests China’s investment strategy involves significant control over operations with limited local participation, creating tensions that have recently prompted pushback from recipient countries.

Investment Patterns and Approaches

Resource Extraction with Limited Local Benefit

In Niger, China National Petroleum Corporation (CNPC) has established a significant presence in the oil sector. However, the Nigerien government has recently taken unprecedented steps to address what they describe as CNPC’s “subterfuge,” “misleading assessment of contractual documents,” and “lack of genuine will” to comply with national legislation. These criticisms point to a pattern where Chinese investment has failed to deliver expected benefits to local economies and populations.

The March 18th Council of Ministers meeting resulted in demands for:

• Equal pay between expatriate and Nigerien employees
• Prioritization of Nigerien workers in oil operations
• Local company participation in subcontracts
• Modification of agreements to better serve Nigerien interests
• Greater transparency regarding financial commitments

This represents a significant shift in Niger’s approach to Chinese investment following the nation’s August 2024 ordinance mandating “priority employment of Nigerien labor, the use of local goods and services, and technology transfer.”

Infrastructure Development with Strings Attached

In Kazakhstan, China has invested substantial sums primarily through loans rather than grants. This loan-based approach has resulted in Kazakhstan accumulating approximately $9 billion in debt to China. Projects include:

• Sinopec’s $1.25 billion investment in a petrochemical unit (expected to create 850 permanent jobs)
• Bank of China’s $100 million loan for the Big Almaty Ring Road (covering only one-eighth of the total cost)

Similar patterns are evident in Nigeria, where China has approved funding for the Kaduna-Kano rail project (providing 85% of the $1.2 billion cost) and participated in the $1.5 billion Lekki Deep Sea Port development (through China Harbour Engineering Co. Ltd).

Strategic Motivations

Economic Influence vs. Aid

Unlike Western approaches that often combine development financing with civil society support, China’s investments are primarily structured as loans or commercial ventures focused on infrastructure and industrial development. This reflects a distinct strategy:

1. Resource Security: Securing access to oil and other natural resources, though increasingly diversified beyond direct resource extraction
2. Market Access: Gaining entry to growing African and Central Asian markets
3. Belt and Road Initiative (BRI) Expansion: Creating transportation and infrastructure networks that connect China to Europe and Africa
4. Debt Leverage: Building economic dependencies that can potentially translate into political influence

The Shift from Aid to Loans

The China International Development Cooperation Agency (CIDCA) has begun focusing on “small and beautiful” projects, reflecting a shift toward smaller-scale, high-impact initiatives. However, even during the COVID-19 pandemic when Kazakhstan received financial contributions from Chinese state actors, most post-pandemic engagement has been structured as loans or investments rather than aid.

Consequences for Host Nations

The consequences of China’s investment approach are becoming increasingly evident:

1. Growing Sovereign Debt: Kazakhstan’s $9 billion debt to China creates long-term financial obligations
2. Limited Technology Transfer: Niger’s complaints suggest CNPC has failed to implement promised technology transfer and local content reforms
3. Labor and Management Disparities: Unequal pay and limited local participation in management have created tensions
4. Growing Resistance: Niger’s recent actions, including revoking the operating license of the Chinese-built Soluxe International Hotel, indicate increasing pushback

China’s investment strategy in Niger, Kazakhstan, and other developing nations reveals a pattern of economic engagement that, while providing needed infrastructure and development capital, often creates problematic dynamics for host nations. The recent assertiveness displayed by Niger’s government may signal a turning point in how recipient countries approach these relationships, demanding greater equity, transparency, and local benefit from Chinese investment partnerships.

As U.S. aid programs recede globally (with USAID cutting 83% of its 6,200 global projects), China’s loan-based approach to international development leaves significant gaps in civil society support, potentially impacting democratic governance and human rights in recipient nations. The contrasting approaches highlight the fundamental differences between Western aid models and China’s commercially-oriented investment strategy.