Huawei, ZTE may benefit from 20b loan to Africa

Published on August 1, 2012 by connie | This story has been viewed 588 views

Shenzhen, China- Chinese President Hu Jintao said on the fifth FOCAC Ministerial Conference on July 19 that China will provide a quota of $20 billion loan to African countries. It’s said part of the loan will be used to improve the communication network in Africa and China’s local two leading communication equipment providers, Huawei and ZTE Communication, are expected to benefit from it.

Chen Deming, Minister of the Department of Commerce made explanation over the above mentioned assisting plan on July 20 that China will strengthen cooperation with the subeconomic regions in Africa, such as West African Economic Community, South African Economic Community and East African Economic Community, on the planning of the interconnection of roads, water, electricity, communication network and other infrastructures. “The constitution and implementation of these plans will be based on the market economy and will be promoted through enterprise cooperation,” he said.

The communication facilities in African countries are backward and need to be improved. Some of the above mentioned USD loan provided by Chinese government will be used to improve the communication status quo of African countries. With mature operation experience after several years development in Africa, Chinese communication equipment providers are expected to obtain priority in the equipment purchase in African countries.

Though the scale of Huawei is larger than ZTE Communication, ZTE is not inferior on the ability to obtain African order since it is a state-owned enterprise. The scales of the order of the two companies are uncertain that it depends on the implementation of the $20 billion loan.

Shenzhen Post Elaine contributes to the story.

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