The China-Africa Development Fund, the nation's largest equity fund focused on African investments, will raise another $2 billion in 2014 to boost the continent's agricultural and steel sectors and upgrade its industrial development.

Chi Jianxin, president of the fund, said China has been looking to invest in different ways in Africa instead of focusing only on building infrastructure projects such as roads, bridges, ports and cement plants.

The fund became operational in 2007, with a target of raising $5 billion. It raised an initial $1 billion, with a second tranche of $2 billion being contributed by the China Development Bank in 2012.

"With a large number of young workers and abundant natural resources, African countries have good opportunities to capitalize on high prices of international agricultural products and commodities," Chi said.

Because agriculture is crucial for stable development and poverty reduction in Africa, the fund has provided financial assistance or formed joint ventures in a number of agricultural or related projects.

Those projects include a grain processing plant in Mozambique, a sisal project in Tanzania, cotton planting in Malawi, and grain planting and poultry projects in Zambia.

The fund will work with Shanxi Tianli Enterprise Group Corp to finance a $60 million cotton planting project in Madagascar next year. The fund and China Development Bank will inject $12 million and more than $20 million, respectively, into this project. The rest will be raised by Shanxi Tianli.

China's direct investment in African agriculture grew fast, from $30 million in 2009 to $82.47 million in 2012. Investment by Chinese companies in African agriculture has increased grain supplies in the countries concerned and raised the agricultural productivity of more than 18 countries.

Justin Yifu Lin, former chief economist at the World Bank, said most sub-Saharan African countries are poor not because they don't know how to consume but because they don't have the necessary human and physical production capacity.

"To tackle this issue, Africa can go through the same industrial transformation China did three decades ago, and in time it will become a major goods producer, rather than just being a shipper of raw materials to different foreign destinations," said Lin.

"More Chinese companies will move their factories to Africa and help upgrade the continent's technological level during this long-term transition."

The Beijing-based China-Africa Business Council, which represents the interests of more than 550 Chinese companies in Africa, found that its member companies are more inclined to put their money into manufacturing businesses such as steel, cement, electronic products, textiles and clothing, and car assembly lines, than in resources industries, the council said in a report in June this year.

In 2012, Sino-Africa trade amounted to $198.49 billion, up 19.3 percent from the previous year. Bilateral trade reached $172.83 between January and October this year, up 5.5 percent, according to the Ministry of Commerce.

China's investment in Africa was $2.54 billion, up 71.6 percent from the same period last year.

Unlike China's financial or construction project aid to Africa, the fund doesn't allocate projects by countries. It operates independently through market-based mechanisms and bears risks on its own.

The fund can also engage in new projects, take stakes in projects, get involved in mergers and acquisitions of expanding and mature enterprises, and make venture capital investments.

The fund signed a cooperation agreement with Shandong-based Shankou Steel Pipe Group in November. Together, the two will build a welded pipe-processing plant in Ghana to catch more growth opportunities from West Africa's energy, logistics and infrastructure markets.

The pipe plant's annual capacity is expected to hit 250,000 metric tons, including welded pipe, rebar, wire rod and other products, mainly supplying Africa's growing number of oil and gas transmission projects.