The Characteristics And Impact Of China's Direct Investment In Africa

The new century has witnessed the rapid growth of China’s outward FDI.Its coverage and scale has developed sustainably.For the first time,China ranked second among all countries(regions)in terms of outward FDI flows.Also for the first time,China’s outward FDI exceeded its inward FDI,which means China has entered a period of net capital outflow.Africa is the second largest continent in the world,with a huge market of 1.2 billion people and abundant natural resources.In the wave of going global,more and more Chinese companies choose to invest in Africa.China’s outward FDI stock in Africa has reached $34.6 billion by the end of 2015 comparing with $0.49 billion,the stock by the end of 2003.After decades of development,China’s direct investment in Africa has faced some new circumstances and new problems.Some western media keep preaching that China’s investment in Africa is only for the natural resources and will cause employment reduction.They even name China’s investment as "new colonialism" in Africa.On this occasion,it is of great significance to explore the impact of China’s direct investment in Africa.This paper reviews the development process of Chinese direct investment in Africa;summarizes the current situation from the perspectives of the overall development,location selection,industry selection,investor and investment style;demonstrated that why China direct investment in Africa can produce a positive impact to the African economy and confirmed this conclusion with some cases.Finally,this paper gave some advice to the Chinese government and enterprises according to the research results and the reality of the situation.