China's Investment Relations with African Countries

677
DOI: 10.20542/0131-2227-2018-62-10-5-12

S. Ignat’ev (ignatyev.serge@gmail.com),
Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (IMEMO), 23, Profsoyuznaya Str., Moscow 117997, Russian Federation;
S. Lukonin (sergeylukonin@mail.ru),
Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (IMEMO), 23, Profsoyuznaya Str., Moscow 117997, Russian Federation 

Acknowledgements. The article has been supported by a grant of the Russian Science Foundation. Project no. 17-78-20216 “The Aggravation of Competition between Russian and Chinese Companies in Africa: Prerequisites, Current Situation and Prospects”. 


Abstract. This article is devoted to investigation of China’s investment activity in Africa. The authors pay attention to the formation history of China’s investment strategy in the African market, and highlight three stages: 1) from 1950 to 1980, 2) from 1980 to 2010, and 3) from 2010 to the present. A distinctive feature of the current China’s investment strategy in Africa is medium and small companies’ entering into the African market. The main areas of Chinese investment are: mining, construction of infrastructure facilities, industrial production and financial services. Chinese financial institutions are interested in further financing of infrastructure projects because this contributes to the achievement of goals within the framework of the Chinese national economic strategy. Beijing needs to balance its export flows to Africa as well. Africa is also an important strategic location for the deployment of the Chinese navy to protect trade routes and transport hubs implemented within the 21st Century Maritime Silk Road. The Port of Djibouti is an example of that strategy. It allows experts to talk about China’s economic and geopolitical expansion through the Belt and Road Initiative. The security issues of the investment and economic policy toward Africa are considered by Beijing as a necessity to protect its investments. In the medium and long-term perspective, the growth trend of Chinese investment, carried out by Chinese private sector, including small and medium-sized companies, will continue. The volume of investments in such areas as industry, transport and telecommunications will grow. The article also looks at the problems of China’s investment activity and the criticism that Beijing faces from African governments. The institutionalization of China’s trade and investment policy in the African direction, which includes the use of potential of the Forum on China-Africa Cooperation, China- Africa Development Fund and African Projects Support Fund, is one of important focuses of the article.

Keywords: world economy, Foreign Direct Investments, Africa, China, economic and investment projects 


REFERENCES

1. Year-end Overview XXIII for Commerce Work in 2017: Pragmatically Pushing China-Africa Win-Win Trade and Economic Relations (In Chin.) Available at: http://english.mofcom.gov.cn/article/zt_cv/lanmua/201803/20180302717165.shtml (accessed 17.04.2018).

2. Africa Has an Important Place for Implementing of the China’s “Going Out” Policy (In Chin.) Available at: http://zfhz.org/plus/view.php?aid=2164 (accessed 17.04.2018).

3. Gu J. China’s Private Enterprises in Africa and the Implications for African Development. The European Journal of Development Research, 2009, vol. 21, issue 4, pp. 570-587.

4. Chinese firms expand reach in Africa amid fears of new colonialism”. Available at: http://www.scmp.com/news/china/diplomacy-defence/article/2100729/chinese-firms-revenues-africa-could-reach-us440-billion (accessed 19.04.2018).

5. Kojima K. The “Flying Geese” Model of Asian Economic Development: Origin, Theoretical Extensions, and Regional Policy Implications. Journal of Asian Economics, 2000, vol. 11, issue 4, pp. 375-401.

6. Kuo S. China’s Investment in Africa – The African Perspective. Available at: https://www.forbes.com/sites/riskmap/2015/07/08/chinas-investment-in-africa-the-african-perspective/#3bba6f5c459e (accessed 15.04.2018).

7. Belyaev S., Makarova I. Kitaiskie investitsii v Afrike: praktika Fonda razvitiya Kitai – Afrika [Chinese Investments in Africa: China-Africa Development Fund Activities] Available at: http://russiancouncil.ru/analytics-and-comments/columns/africa/kitayskie-investitsii-v-afrike-praktika-fonda-razvitiya-kitay-afrika/ (accessed 17.04.2018).

8. World Investment Report 2017. Available at: http://unctad.org/en/PublicationsLibrary/wir2017_en.pdf (accessed 17.04.2018).

9. Chen W., Dollar D., Tang H. Why is China Investing in Africa? Evidence from the Firm Level. Available at: https://www.brookings.edu/wp-content/uploads/2016/06/Why-is-China-investing-in-Africa.pdf (accessed 19.04.2018).

10. Chinese company to purchase world’s fourth largest uranium deposit in Namibia. Available at: http://en.mercopress.com/2012/01/12/chinese-company-to-purchase-world-s-fourth-largest-uranium-deposit-in-namibia (accessed 21.04.2018).

11. China signs a $12 billion contract to build a railroad in Nigeria (In Chin.) Available at: https://www.voachinese.com/a/nigeria-20141120/2527487.html (accessed 18.04.2018).

12. Kenya officially launches standard gauge railway. Available at: http://www.xinhuanet.com/english/2017-05/31/c_136328779.htm (accessed 18.04.2018).

13. China's first electrified railway in Africa was officially opened to traffic (In Chin.) Available at: http://www.xinhuanet.com/world/2016-10/05/c_1119666313.htm (accessed 18.04.2018).

14. Construction of auto plant in South Africa is expected to start at the end of 2017 (In Chin.) Available at: http://www.xinhuanet.com/world/2016-08/31/c_1119486194.htm (accessed 18.04.2018).

15. Cotton Market Boost. Chinese cotton processing factory brings hope to Malawian farmers. Available at: http://www.chinafrica.cn/africa_report/txt/2011-08/01/content_379248.htm (accessed 18.04.2018).

16. Ethiopia to sign mobile network deals with ZTE, Huawei. Available at: https://www.reuters.com/article/ethiopia-telecoms/ethiopia-to-sign-mobile-network-deals-with-zte-huawei-idUSL5N0EB36920130530 (accessed 18.04.2018).

17. Viktor’en A. Osobennosti investitsionnogo sotrudnichestva Kitaya so stranami Afriki [The Particularity of the Investment Cooperation Between China and African Countries]. RUDN Journal of Economics, 2013, no. 3, pp. 56-64.

18. Rich T.S., Recker S. Understanding Sino-African Relations: Neocolonialism or a New Era? Journal of International and Area Studies, vol. 20, no. 1, 2013, pp. 61-76.

19. Chinese Investments in Africa: “Chopsticks Mercantilism”. Available at: http://almariam.com/2017/09/27/chinese-investments-in-africa-chopsticks-mercantilism/#_edn4 (accessed 23.04.2018).

20. China signs financing for Ghana’s 400-MW Bui. Available at: https://www.hydroworld.com/articles/2008/09/china-signs-financing-for-ghanas-400-mw-bui.html (accessed 18.04.2018).

21. Ghana’s 400-MW Bui hydropower plant completed. Available at: https://www.hydroworld.com/articles/2013/12/ghana-s-400-mw-bui-hydropower-plant-completed.html (accessed 15.06.2018).

22. Kenyans Fear Chinese-Backed Railway Is Another “Lunatic Express”. Available at: https://mobile.nytimes.com/2017/06/08/world/africa/kenyans-fear-chinese-backed-railway-is-another-lunatic-express.html?mwrsm=facebook&referer=http%3a%2f%2fm.facebook.com (accessed 19.04.2018).

23. Niger renegotiates terms of $980 mln Chinese refinery loan. Available at: https://www.reuters.com/article/niger-china-refinery-idAFL6E8IOK0R20120724 (accessed 16.04.2018).

24. Probes Involve Firm Linked to China Leader’s Son. Available at: https://www.wsj.com/articles/SB124820142767869383 (accessed 17.04.2018).

25. Sweeney P. Beijing’s scramble for Africa. Available at: http://tasceconomists.blogspot.ru/2010/07/china-iii-beijings-scramble-for-africa.html (accessed 18.04.2018).

26. China and Africa: Between Extremes. Available at: http://africaresearchinstitute.org/newsite/wp-content/uploads/2013/03/Briefing-Note-1202-pdf.pdf (accessed 18.04.2018).

27. Chinese Investments in Africa: “Chopsticks Mercantilism”. Available at: http://almariam.com/2017/09/27/chinese-investments-in-africa-chopsticks-mercantilism/#_edn4 (accessed 23.04.2018).

28. Three Aspects of China's Future Cooperation with Africa: Interpretation of Xi Jinping's Speech at the Forum on China-Africa Cooperation in Johannesburg (In Chin.) Available at: http://www.xinhuanet.com/world/2015-12/05/c_1117366927.htm (accessed 16.04.2018).

29. China to Host FOCAC Summit in 2018. Available at: http://www.chinafrica.cn/Africa/201801/t20180103_800113602.html (accessed 18.04.2018).

30. China-Africa Development Fund Invested over $4.4 Billion in Africa (In Chin.) Available at: http://www.xinhuanet.com/money/2017-06/26/c_1121214693.htm (accessed 16.04.2018).

31. Deich T. Kitai – Afrika: Ekonomicheskie otnosheniya na rubezhe XXI veka [China–Africa: Economic Relations in the 21st Century]. Asia and Africa Today, 2006, no. 4, pp. 30-36.

32. Bräutigam D., Tang X. African Shenzhen: China’s special economic zones in Africa. The Journal of Modern African Studies, 2011, vol. 49, no. 1, pp. 27-54. DOI:10.1017/S0022278X10000649 


Registered in System SCIENCE INDEX

For citation:
Ignatev S., Lukonin S. China's Investment Relations with African Countries. World Eonomy and International Relations, 2018, vol. 62, no. 10, pp. 5-12. https://doi.org/10.20542/0131-2227-2018-62-10-5-12



Comments (0)

No comments

Add comment







Indexed

 

 

 

 

Dear authors! Please note that in the VAK List of peer-reviewed scientific journals, in which the main scientific results of dissertations for the degree of candidate and doctor of sciences should be published for the “MEMO Journal” the following specialties are recorded:
economic sciences:
5.2.5. World Economy.
5.2.1. Economic Theory
5.2.3. Regional and Branch Economics
political sciences:
5.5.4. International Relations
5.5.1. History and Theory of Politics
5.5.2. Political Institutions, Processes, Technologies

 

Current Issue
2023, vol. 67, No. 9
Topical Themes of the Issue:
  • Contradictions and Conflicts in the Multilateral Trading System 
  • Global Climate Agenda: Big Gamble 
  • South Asia in Regional and World Politics 
  • Social Policy and Public Administration Ecosystems
Submit an Article
INVITATION FOR PUBLICATION
The Editorial Board invites authors to write analytical articles on the following topics:
  • changes in the processes of globalization in modern conditions
  • formation of the new world order
  • shifts in civilization at the stage of transition to a digital society

The editors are also interested in publishing synthesis articles / scientific reviews revealing the main trends in the development of certain regions of the world - Latin America, Africa, South Asia, etc.