How the Private Sector is Changing Chinese Investment in Africa

Africa-China-Map-01

The Vale Columbia Center on Sustainable International Investment published on 15 April 2013 a brief study titled “How the Private Sector Is Changing Chinese Investment in Africa” by Xiaofang Shen, senior visiting scholar at the Johns Hopkins University School of Advanced International Studies.

The study explains that Chinese FDI in Africa is becoming increasingly diverse. Until 2005, only 52 private investment projects in Africa were registered with the Chinese government. By April 2012, this number had jumped to 923 and Chinese numbers are significantly lower than similar data provided by African countries.

Chinese private investment projects are concentrated in manufacturing (36 percent) and services (22 percent). State-owned companies have focused on construction (35 percent) and resource extraction (25 percent).

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Columbia FDI Perspectives – Perspectives on topical foreign direct investment issues by the Vale Columbia Center on Sustainable International Investment

No. 93 April 15, 2013

Editor-in-Chief: Karl P. Sauvant (Karl.Sauvant@law.columbia.edu)
Managing Editor: Jennifer Reimer (jreimer01@gmail.com)

How the Private Sector is Changing Chinese Investment in Africa

By Xiaofang Shen*

In August 2012, US Secretary of the State Hilary Clinton offered a thinly veiled criticism of China’s role in Africa, calling upon African countries to guard against those that “come in, take out natural resources, pay off leaders and leave.” The Chinese official news agency, Xinhua, retorted immediately that “Clinton’s implication that China has been extracting Africa’s wealth for itself is utterly wide of the truth.”

Data gathered from China, six African countries and company interviews suggest that neither Clinton nor Xinhua was correct. China’s investment in Africa is far from monolithic and is growing increasingly diverse. The driving force behind this evolution is the rising role of China’s private sector. Private investors are primarily driven by profit and they can create real economic opportunities for host countries.

Until 2005, only 52 private investment projects in Africa were registered with the Chinese government. By April 2012, this number had jumped to 923, representing 55% of the 1,679 Chinese outward foreign direct investment (OFDI) projects active in Africa.5 However, China’s …

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Click the link below to read the entire paper in PDF format
Columbia FDI Perspectives – Perspectives on topical foreign direct investment issues by the Vale Columbia Center on Sustainable International Investment – No. 93 April 15, 2013