The China-Africa Development Fund is shifting its investment strategy with the focus now on infrastructure, manufacturing and agriculture, after a capital injection of $2 billion, Hu Zhirong, vice-president of the fund, said.
Besides energy and resources, the fund is looking at projects in "infrastructure, manufacturing, new energy and agriculture", to boost Africa's standard of living, he said in an interview.
Direct investment last year by China into Africa surged by 59 percent, from a year earlier, to $1.7 billion. During the same period, the nation's overseas direct investment grew by 1.8 percent year-on-year to $60 billion, according to the Ministry of Commerce.
"There is huge potential," as the region absorbs massive investment every year, Hu said.
The annual foreign direct investment into Africa is estimated to be $80 to $90 billion, but China only contributes about 2 percent.
The fund was set up in March 2007 with capital provided by the China Development Bank.
The fund had an initial injection of $1 billion, and earlier this year it received a further $2 billion.
It has set up branches in South Africa, Ethiopia and Zambia and has invested in more than "50 projects worth $1.7 billion", Hu said.
The fund announced last month an agreement with Xinjiang Goldwind Science & Technology, a leading Chinese wind turbine manufacturer, to develop the African market and transfer technology.
African nations welcome foreign companies investing in the new energy sector, Hu said.
And there seems to be a perfect manufacturing dovetail. China has the technology and excessive capacity while Africa needs industrial development.
China First Automobile Works announced in February the construction of a $100-million truck and passenger car plant in the Eastern Cape of South Africa. The plant, set to be the largest industrial park in Africa, will be built through the fund.
Africa is a good place for Chinese manufacturers to invest, as it allows them a platform to target European sales, experts have said. A number of European countries have signed trade agreements with African countries.
China's shift in investment strategy is in line with Africa's economic growth plan that prioritizes industrialization and urbanization.
Rob Davis, South Africa's minister of trade and industry, said that the country plans to absorb foreign investment worth $100 billion in five years.
Its focus will be on mining, manufacturing, agriculture, infrastructure, tourism, finance and high-tech industries. Davis believes that foreign direct investment is the "key engine" for economic growth.
A report by the World Bank last year suggested that Africa should open its markets wider, and look beyond mineral exports.
The report also highlighted that the tourism sector could be better developed.
Mining is a key target of the fund.
Together with China Guangdong Nuclear Power Corp, the fund is set to seek control of Namibia's Husab uranium project, potentially the world's second-largest uranium mine, with the takeover of two companies, Kalahari Minerals and Extract Resources, for about $2.3 billion.
Lei Mu, executive director of China Development Bank International, the overseas investment arm of China Development Bank, said that the company is interested in buying iron ore and coking coal.
Premier Wen Jiabao said last month that China will guide companies, including those in the "energy, raw materials, agriculture, manufacturing, service and infrastructure" industries, to invest abroad through mergers and acquisitions.