Study On The Influence Factors Of China’s FDI In Africa

With the deepening of economic globalization, the effect of foreign direct investment on economy becomes prominent. After three decades of reform, the economy of China has been greatly promoted. China’s foreign direct investment maintains rapid growth with the implement of the "going out" strategy.Africa can not be ignored although there are many choices for China’s direct investment. With the development in recent years, African politics and economy gradually stabilized which is attractive to the investment; Africa has a wealth of agriculture, energy and mineral resources, governments in Africa have also set up preferential policies to attract foreign investment to in exploiting mineral resources; high unemployment rates, low labor costs in African countries, both of them will benefit the labor-intensive industries.In a theoretical sense, the study on the influencing factors of China’s FDI in Africa can enrich existing research results and develop China’s FDI theories; In a practical sense, the study on the influencing factors of China’s FDI in Africa can provide advice for Chinese government in perfecting the policies of motivating investment to Africa, and provide reference for Chinese enterprises in investing developing countries.In this paper, qualitative analysis and quantitative analysis were used:First, analyze the factors that may affect China’s investment in Africa from the motives of Chinese direct investment in Africa and the African investment environment. Then the data of African countries was divided into two groups according to income level and make the empirical analysis. Qualitative analysis and quantitative analysis were used to analyzing the influencing factors of Chinese investment in African countries of different income levels.This dissertation is divided into six chapters:The first chapter is the introduction, including the background, significance and literature review, the research methods and structural arrangements of this article, innovation and deficiencies; The second chapter introduces the theoretical basis of this dissertation, including the definition of FDI and the theory of international direct investment which is divided into two parts, traditional FDI theories and FDI theory of developing countries; The third chapter is mainly introduces the profile and history of China’s direct investment in Africa, the profile includes the scale of Chinese investment in Africa, choices of countries and industries; The fourth chapter is about the qualitative analysis of the influencing factors of China’s investment in Africa--the author proposes the factors from the Chinese enterprises investment motives in Africa and the African national investment environment; The fifth chapter is about empirical analysis on the influencing factors of China’s direct investment in Africa, the analysis based on the data of 25 African countries which was divided into two groups according to the income level; The sixth chapter systematically summarizes the conclusions of this dissertation and makes the proposal.Through the analysis and study above, the following conclusions are achieved:First, China provide non reimbursable assistance to Africa in 20th century, after the implementation of the "Going-out" strategy, seeking for economic interests become a major motivation of China’s enterprises; Second, the absolute amount of China’s investment in Africa rise gradually, but relatively volume is still at a low stage, and the choices of countries and industries are unbalanced; Third, a huge consumer demand in Africa, abundant natural resources, cheap labor force and the free for trade barriers, all of them make contribution to attract China’s investment; Fourth, for the higher income level country, market scale, demand for Chinese goods and communications facilities of the African countries are the obvious factors that influence the choice of China’s foreign direct investment which is mainly market-oriented. For the lower income level African countries, natural resource and communications facilities are the obvious factors which influence the choice of China’s foreign direct investment which is mainly resource-oriented. However, inflation and political risk factors are not proved to have a significant impact on China’s investment in Africa, which indicates that the awareness of the risks of China’s enterprises need to be strengthened.According to the analysis above, some recommendations are here proposed. At Chinese government level, shaping the image of China, refuting the rumors about enterprises in China, increasing financial support, improving the information service system, the legal system and the security system are proposed; At Chinese enterprises level, paying attention to industry selection, comparative advantage, investment appraisal, building a brand and shaping the image of enterprise are proposed.