Chinese Enterprises Direct Investment Analysis In Madagascar

Studies, conducted in order to find a relationship between FDI and growth in developing countries, show that FDI flows increase investment, while contributing to overall economic growth. The rapid economic development in China demonstrates the importance of FDI for economic growth. Measures have been reduced to attract more foreign investment funds to China.Currently, the output of the national territory of Chinese enterprises is an irresistible trend to maintain the country's economic development. Chinese investments have continually increased from year to year, and are prevalent throughout the international market. How do Chinese investments look in Madagascar? This choice of topic is motivated primarily by the need to analyze Chinese investments trends and the constraints surrounding them in the Malagasy market. Indeed, the motivations of investors are linked to the search for gains in efficiency. In this regard, the host country must necessarily have a number of preliminary determinants in order to attract foreign investments.This study will give an outline of Madagascar's economic potential, while highlighting the reasons for the current distrust that Chinese investors see therein, despite all the efforts given to bring back foreign investments. It will also try to analyze investments in promising sectors and poorly operated sectors, while providing statistical data to illustrate the need for investments felt in these areas.However one must recognize the limits of the analysis due to the lack of available data concerning Chinese investment in Madagascar. Lastly, we have to take into consideration the socio-political crises which the country has endured since the beginning of 2009.Therefore, we will focus our analysis on the economic period spanning until 2009 in order to limit the probability of conflicting information.