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Has China’s Investment Pattern in Sub-Saharan Africa Been Driven by Natural Resource Quest?

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  • J. Alexander Nuetah
  • Xian Xin

Abstract

We assess China’s investment patterns in Sub-Saharan Africa (SSA) using total investment data separated into foreign direct investment (FDI) and infrastructure investment in four separate groups of countries covering the period from 2005 to 2017. Answering four questions based on arguments by scholars on China’s involvement in the region, we find that: (a) FDI constitutes only about 27 percent of China’s total financial flows into SSA; (b) only 30 percent of the total financial flows from China to SSA have gone into the natural resource sector; (c) mineral-related investments in mineral-resource-endowed countries constitute less than one-third of the total investment; and (d) less than one-third of China’s total investment in the region is allocated to natural resource extraction. These findings seem to refute arguments that Chinese investments in Africa are directed at natural resource extraction and that only countries endowed with natural resources attract Chinese investments.

Suggested Citation

  • J. Alexander Nuetah & Xian Xin, 2019. "Has China’s Investment Pattern in Sub-Saharan Africa Been Driven by Natural Resource Quest?," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 11(3), pages 215-231, September.
    • Handle: RePEc:sae:emeeco:v:11:y:2019:i:3:p:215-231
    DOI: 10.1177/0974910119887065
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