Wang Min, Tenured Associate Professor and Deputy Director, Center for Environmental and Energy Economics, National School of Development, Peking University
The concept of the “Global South” has gained increasing attention in recent years. During the era of planned economy, cooperation between China and other Global South countries was largely political and diplomatic in nature. Since the reform and opening-up period, this relationship has notably shifted toward economic collaboration.
Infrastructure development has been as fundamental to China’s industrialization as it is for other developing nations today. From this perspective, infrastructure cooperation promoted by the Chinese government plays a crucial role in supporting economic growth and industrialization across the Global South. Ports, highways, and other infrastructure projects under related initiatives have also accelerated the global expansion of Chinese construction enterprises: the value of overseas contracted projects surged from less than US$10 billion in the early 2000s to US$160.9 billion in 2023. According to “Engineering News-Record” (ENR) 2024 data, 81 Chinese firms ranked among the world’s top 250 international contractors—double the number from second-place Turkey. Their combined international revenue reached US$122.97 billion, accounting for 24.6% of the total and exceeding that of France, the second-largest contributor, by more than 50%.
Recent field studies in Africa and Southeast Asia reveal that many Global South countries face structural constraints in industrialization and encounter difficulties in absorbing industrial transfers from China. This underscores the need to explore new development pathways.
First, addressing low domestic savings and capital shortages—particularly for infrastructure financing—remains a priority. In many countries, officials’ primary concern is mobilizing funds for infrastructure. Investment relies on savings, including domestic savings and foreign direct investment (FDI), the latter being volatile. Historically, Western nations alleviated early capital shortages through colonization, while China relied on the industrial-agricultural “price scissors.” Today, Global South countries must identify new approaches to overcome this constraint.
Second, greater investment in human capital and improved productivity are essential. Chinese companies investing overseas often face productivity challenges: despite lower wages in host countries, limited education and skills accumulation result in lower labor productivity, meaning unit labor costs are not always significantly lower than in China. While this may improve over time, it remains an immediate hurdle.
Third, strengthening macroeconomic stability is critical. Over the past decade, many countries have experienced sharp currency depreciation. For example, South Africa and Tanzania have seen their exchange rates depreciate by roughly 70% and 50%, respectively, since 2013. Balance-of-payment imbalances and high external debt frequently trigger exchange rate volatility and macroeconomic instability, severely undermining investor confidence.
Fourth, governance capacity must be enhanced. To achieve industrialization, Global South countries must effectively tackle these challenges and overcome development bottlenecks. As an integral member of the Global South, China is committed to advancing the Four Global Initiatives and promoting shared development across the Global South while pursuing its own progress.
Published on January 15, 2026