Foreign Direct Investment Risks Identification,Measurement And Management Of China In South Africa

In the past four decades,with China’s strong economic growth and increasing openness,China has increasingly become a leader of the world economy.Since the financial crisis in 2008,China’s foreign investment has begun to grow rapidly,and the degree of decentralization of investment and investment stock have continued to increase.In 2015,China achieved net capital output for the first time.Among the 54 countries in Africa,owing to South Africa’s developed financial markets and excellent investment environment,The Republic of South Africa is the most economically developed country.In the past ten years,bilateral investment of Sino-South Africa and trade volume have continued to grow.In 2018,China’s investment and flow to South Africa reached US$ 747.277 million and US$ 317.36 million,respectively.China’s FDI in South Africa is growing late and rapidly,as Chinese investors increase their investment in South Africa,more and more investment-related problems have arisen.Under the current unpredictable investment environment,it is particularly important to learn the type,measurement and management of China’s FDI risk in South Africa.This dissertation first studies the status quo,industry distribution and development trend of China’s FDI in South Africa as well as summarizes the characteristics of China’s FDI in South Africa at this stage.Secondly,it analyzes the four types of risks faced by Chinese investors in South African investment.On this basis,the ICRG national risk measurement method is used to systematically quantify the investment risk of South Africa,and the qualitative adjustment of the bilateral risk is carried out in detail after the usage of ICRG method.It can be seen from the ICRG method that although the political,economic and financial risks of South Africa vary from 2008 to 2016,they are all above the moderate level;in addition,although the overall risk level of South Africa has been declining for nearly a decade,the risk,however,still remains above its modest level.Finally,this paper proposes risk management methods and recommendations for enterprises and the Chinese government according to China’s risk exposure factors for South African investment.