The Industry And Location Choice For China's Agriculture Investment To Africa

Along with the economical globalization, the integrated deepening, global FDI warm surges upward unceasingly. Our country's outward FDI total amount also repeatedly creates historical new high In 2009 our country's outward FDI achieved 56.53billion US dollars, of which non-financial overseas direct investment amount to 47.8 billion U.S. dollars, representing an increase of 1.1% over the same period in last year. However, compared to the "going outside" pace, the agricultural "going outside" dragged. In 2009 China's outward FDI in agriculture reached 0.34billion US dollars, accounting for only 0.6% of total investment Up to the end of 2009, China's FDI stock amount in Africa is 9.33 billion, including direct investment in agriculture amount 1.34 billion dollars, accounting for only 14.4% of stock investment in Africa According to the data that Africa has the global 12% farming resources, in which only nearly 20% reclamation, the majority lacks the irrigation. Therefore, African agriculture has a good acceptance of foreign direct investment in regional conditions, to carry out cross-border agricultural investment in Africa is of great significance for China's going outside" strategy.In this article we first introduce the theory of industry and location choice in foreign direct investment, tell the distribution of China's agriculture investment in Africa. Secondly, using trade competitiveness index to analyze the comparative advantage of some kinds of agricultural products in China and Africa, then basing on the investment theory of comparative advantage, we provide some suggestion for the industry choice in agriculture investment to Africa. At the same time, this paper also establish the gravity model to study the influence factors in investment, and calculates t investment potentiality index to measure the investment capacity of African countries, provide some suggestion for the location choice in agriculture investment to Africa. Finally, provide some policy suggestions for China's agriculture investment to Africa.The results show that, some agricultural products like cotton and tobacco showed obvious competitive disadvantage in China but strong competitive in Africa, these related industry will be the ideal investment industries. Through the gravity model analysis we found that GDP and population positively associated with investment. IF the difference in two countries'per capita income is bigger, the amount of investment is smaller, the volume of bilateral trade is the most obvious variables which influences investment, this may serve as one of important principle for. China's enterprises when selecting the investment country According to the results of investment potentiality index, countries with huge potential such as Angola and Kenya is the advisable country for agricultural investment...