Wenjie Chen, David Dollar and Heiwei Tang write: \u00a0China continues to generate controversy with its rapidly growing investments in Africa. However, new research reveals that some of the West\u2019s biggest concerns over Chinese investment\u2014its true size, its focus on natural resources, and its disregard for good governance\u2014are not always well grounded.<\/p>\n
China has emerged as Africa\u2019s largest trading partner, providing demand for the continent\u2019s energy and minerals. At the same time, there is a growing volume of Chinese direct investment in Africa. Some of it has taken the form of high-profile natural resource deals in countries with poor track records of governance (e.g., Angola and Sudan). These developments have given rise to a number of ideas about Chinese investment in Africa: \u00a0That it is on the same enormous scale as China\u2019s trade; that it is aimed primarily at natural resources; and that it is concentrated in countries with poor governance.First, on the scale of China\u2019s direct investment in Africa,<\/p>\n
Chinese statistics on what they call \u201coverseas direct investment\u201d (ODI) show a stock of $26 billion in Africa as of the end of 2013. This number would amount to about 3 percent of total foreign direct investment (FDI) on the continentSecond, concerning natural resources, in our paper we examine the allocation across African countries of the stock of Chinese ODI and the stock of total FDI (which, as noted, mostly comes from Western countries). Other things equal, African countries that are more resource rich attract more Chinese investment. However, this effect is about the same for Western investment, and it is only one factor determining investment. For example, Chinese ODI is also influenced by the size of the domestic market, indicating that some of it is aimed at serving that market.<\/p>\n
We go beyond the aggregate data and also work with the firm-level data compiled by China\u2019s Ministry of Commerce (MOFCOM). capital-scarce countries, suggesting its importance as a source of external financing to the continent. \u00a0China’s Investment in Africa<\/a><\/strong><\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Wenjie Chen, David Dollar and Heiwei Tang write: \u00a0China continues to generate controversy with its rapidly growing investments in Africa. However, new research reveals that some of the West\u2019s biggest concerns over Chinese investment\u2014its true size, its focus on natural … Continue reading ![\"China](\"http:\/\/www.w-t-w.org\/en\/wp-content\/uploads\/2015\/09\/China-in-Africa.jpg\")
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