Research On The Economic Risk Of China's Power Investment In Africa Based On The One Belt And One Road Initiative

Since the reform and opening up,China's economic strength has increased rapidly,and residents' income has continued to grow steadily.On this basis,the country has saved a considerable amount of foreign exchange reserves,and the opportunities and demands of Chinese enterprises to " go out " have also increased,which has also become the common needs of the people.With the continuous development of the national economy,China's GDP surpassed Japan's in 2011,leaping to the second largest economy in the world after the United States,and its economic strength further improved.Since the “one belt,one road”initiative was formally put forward in 2013,the scope and scale of China's outward foreign direct investment have also been expanding.However,there are also many risks of China's foreign investment activities.The lack of analysis on the choice of target countries and investment environment will bring many hidden dangers.In recent years,China has built a considerable number of power stations and invested a lot in Africa.According to the data onto the International Energy Agency,at least 33% of the power facilities in Africa will be built by China from 2010 to 2019,and China has made a great contribution to the power facilities in Africa.Nevertheless,600 million people in Africa still have no access to electricity and their demands for electricity is still strong.In addition,Africa has sufficient natural energy for power generation but its infrastructure construction capacity is insufficient to make full use of it.Therefore,building a reliable power system will require a lot of foreign investment.Based on this,this paper analyzes the economic risk of China's power investment in Africa.Firstly,the basis of China's power investment in Africa is described.Among them,the capacity of China's power infrastructure construction is analyzed.The capacity of China's infrastructure construction can be regarded as the first in the world.Among the world's top 500 enterprises,there are 21 power enterprises.The abundant capital and strong ability of these enterprises are the important supporting forces for participating in international competition and entering Africa.Then the demand for electricity in Africa is described.The lack of electricity in Africa requires the development of power engineering projects.And its power infrastructure construction capacity is poor,there is investment space.Secondly,the paper analyzes the situation of China's power investment in Africa in three aspects,namely the scale,main body and structure of China's power investment in Africa.The analysis shows that the scale of China's power investment in Africa is relatively large.Meanwhile,compared with other countries in Africa,China's share is the first.And from the perspective of investors,large state-owned enterprises are the backbone of power project construction.The investment structure is analyzed from country distribution,type of power investment and China's power investment mode in Africa.The main mode of China's power investment in Africa is EPC mode.The fifth chapter mainly analyzes the economic risks of China's power project investment in Africa.Because EPC is the most important investment mode in China's power investment in Africa,the economic risks implied in the EPC mode are analyzed.Then using the principal component analysis method,17 African countries are selected for analysis.Through the analysis results and combined with the actual situation,the corresponding risk aversion methods are given.