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Chinese Investment in Africa

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  • Klaver Mark
  • Trebilcock Michael

Abstract

Chinese investment in Africa has increased rapidly over the past two decades. This paper asks how, why, whether it is good or bad, and what Africans can do about it.On how, the Chinese government actively promotes liberal investment regulations in Africa. It also keeps close contact with major Chinese enterprises investing on the continent.On why, the motivation behind Chinese investment in Africa is self-interested: China primarily wants Africa’s natural resources. China also seeks to access local markets, and to capitalize on Africa's preferential trade access to the West.On whether Chinese investment is good or bad for Africa, African economies are growing at unprecedented rates, partly due to Chinese investment. This paper highlights seven reasons Chinese investment contributes to African growth. But it also reveals three drawbacks to Chinese investment in Africa.On what Africans can do about Chinese investment, Africa can capitalize on it by proactively promulgating a tax code that promotes African development. The tax code's goal should be to use Chinese investment and natural resource revenues to develop Africa’s manufacturing sector through infrastructure, special economic zones, and education.Thus, this paper maintains that although Chinese investment in Africa is not unambiguously advantageous, it presents major opportunities for African development.

Suggested Citation

  • Klaver Mark & Trebilcock Michael, 2011. "Chinese Investment in Africa," The Law and Development Review, De Gruyter, vol. 4(1), pages 168-217, September.
    • Handle: RePEc:bpj:lawdev:v:4:y:2011:i:1:n:5
    DOI: 10.2202/1943-3867.1126
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    References listed on IDEAS

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    1. Zhong Wu & Enjiang Cheng, 2010. "Poverty Alleviation in the People’s Republic of China: The Implications for Sino–African Cooperation in Poverty Reduction," African Development Review, African Development Bank, vol. 22(S1), pages 629-643.
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    4. Farole, Thomas & Brautigam, Deborah & Xiaoyang, Tang, 2010. "China’s Investment in African Special Economic Zones: Prospects, Challenges, and Opportunities," World Bank - Economic Premise, The World Bank, issue 5, pages 1-6, March.
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    6. Mr. Atsushi Iimi, 2006. "Did Botswana Escape from the Resource Curse?," IMF Working Papers 2006/138, International Monetary Fund.
    7. Juliet Elu & Gregory Price, 2010. "Does China Transfer Productivity Enhancing Technology to Sub-Saharan Africa? Evidence from Manufacturing Firms," African Development Review, African Development Bank, vol. 22(S1), pages 587-598.
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    Cited by:

    1. Didier, Tatiana & Llovet, Ruth & Schmukler, Sergio L., 2017. "International financial integration of East Asia and Pacific," Journal of the Japanese and International Economies, Elsevier, vol. 44(C), pages 52-66.
    2. Ficawoyi Donou-Adonsou & Sokchea Lim, 2018. "On the importance of Chinese investment in Africa," Review of Development Finance Journal, Chartered Institute of Development Finance, vol. 8(1), pages 63-73.

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    Keywords

    Chinese; investment; Africa;
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