The Impact Of Chinese Foreign Direct Investment On Malawi's National Development

Since the opening up of the People's Republic of China,a lot of effort has been put in its economic interaction with other countries.As a result of these interactions,China made bilateral relations with Malawi in 2008,a move which opened new markets for both Chinese and Malawian investors.With China's rise to global dominance,Malawi has overtime stood to be one of the beneficiaries of the vast expertise and knowledge from China through investments that have continues to take shape over the past ten years.In Malawi,China has mainly invested in Construction,manufacturing,and Agriculture,areas which have for a long time been considered as crucial to the Malawian economy.Chinese Foreign Direct Investment has greatly increased in Malawi,with most economists and experts arguing that this is the injection that was greatly needed to help in improving the country's economy.Within the ten years of the Sino-Malawian relationship,there has been a number of investments that have been implemented.It is for this purpose that this paper sought to find the impact of these investments in Malawi and how Malawi can maximize benefit from these.This thesis consists of five chapters.The first chapter gives a brief background of the field of study and the area of study.Chapter two focuses on the theoretical framework adopted in this study and the review of relevant literature on the issue of Foreign Direct Investments.As China has continued to rise in global economy and with the increase in Chinese investments in other countries especially in Africa,most scholars have found the study of the Chinese Investments to be a point of interest,as they want to understand China's motives and the impact it is having.There has not been much work done on FDI issues and Malawi,therefore this paper heavily used literature from other developing nations in Africa with similar trends and structures as Malawi.In the theoretical framework,this adopted the dependency theory which highly indicates how FDI directly and indirectly affects economies of host countries.In Chapter 3,the paper analyzes how the economic environment in Malawi is.The section talks about the risks and benefits of investing in Malawi,with figures from previous years on how the trends were.The fourth chapter talks about the relationship between Malawi and China with an in-depth of how far Chinese investments have gotten.The chapter discusses the nature of investments that China has made in Malawi,and also looks at a case study which was done in several Chinese owned companies in Malawi.In this study,the research finds that Chinese FDI has a great potential of impacting the economy of Malawi,but Malawians have to be involved in this process beyond government to government relations.The work seems to be a job that the Malawi government has to continuously engage in to sensitize people in the country on the benefits that Malawi is already enjoying,and to give people a clear understanding of what Malawi can benefit from these interactions.In this regard,stereotypes that have existed for a long time on Chinese products and work have to be broken and people's mindsets should be changed.Furthermore,government officials from the Malawian side need to be transparent to ensure the benefit sought for is actually achieved,as previous engagements with other countries have shown that corruption has hindered most of the progress.