Research Of China’s Outward Direct Investment In Africa Under Current Stage

Based on Dunning’s investment development path，this study makes an empiricalanalysis of17developing countries’ and China’s foreign direct investmentdevelopment path respectively. We find no empirical support for the IDP concept inthe developing countries case，but find support in china’s case that China is in stage3and its foreign direct investment is lagging behind in economic development.Be further, this paper focus on financial development and country risk, the twomajor determinants of China’s outward investment to Africa. The empirical analysisbased on the data during2006-2011indicates that, for African countries as a whole,China’s ODI in Africa reflects both resource-oriented and market-seeking orefficiency-seeking motivations and the index of financial development is notsufficient to constitute the influencing factor of China’s ODI in Africa. China’s ODIhas a strong appetite for risk. The empirical analysis on the countries in which stockmarkets have developed to a certain stage shows that China’s ODI mainly featuresmarket and efficiency seeking motivations rather than resource-oriented motivation. Italso shows that countries with higher stock market liquidity are more likely to attractODI inflows and China’s ODI has a strong financial risk appetite. This paper suggeststhat the prospective study should be done to instruct China’s ODI in Africa.Meanwhile, China’s foreign direct investment, including ODI in Africa shouldachieve efficiency-oriented strategies transformation, and that the government shouldgive more policy support to private enterprises and foreign-invested enterprisesshould promote rational investment.Finally, some recommendations of financial support to China’s ODI in Africa areproposed.