Effects of Chinese Foreign Direct Investment in Africa

Roquia Fane Madouka Koumou; Wang Manyi

doi:doi:10.11648/j.jfa.20160403.15

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Effects of Chinese Foreign Direct Investment in Africa

Roquia Fane Madouka Koumou, Wang Manyi

Published in Journal of Finance and Accounting (Volume 4, Issue 3)

Received: 21 March 2016 Accepted: 29 April 2016 Published: 20 May 2016

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Abstract

Over the past twenty decades, countless studies both empirical and theoretical have attempted to study the effect of Foreign Direct Investments (FDI) on the economy. A great majority of these studies reached the conclusion that FDI accounts for technology transfer across countries, which in turn increases the total investment in the economy of the host countries. These studies seem also to suggest that FDI contribute relatively more to growth than domestic investment. However, with regard to studies about the Chinese investments in Africa, many authors claimed that Chinese investments in Africa bring more harm than good to the economy. They go even far to claiming that Chinese are predators of the African raw materials, and most authors remain very cautions when it comes to listing the positive effects of these investments. The goal of this paper was thus to weigh out effects (both negative and positive) of the Chinese investments in Africa. The conclusion drawn at the end of this investigation was that far from being all negative, Chinese investments are setting the African economy on the road to achieving economy development. This is because they allow African countries to go towards the modernization, industrialization and strong economic growth. It was however also observed that the claims as to which Chinese are predators of the African raw materials is slightly true. Furthermore, this hanger of raw materials leads to the closing of many local companies. Hence, it was concluded that the harmonization and the improvement of Chinese investments in Africa should pass by the respect for rules dictated by the governments (institutions) and the respect for the international standards.

Published in	Journal of Finance and Accounting (Volume 4, Issue 3)
DOI	10.11648/j.jfa.20160403.15
Page(s)	131-139
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2016. Published by Science Publishing Group

Keywords

Foreign Direct Investment, Economic Growth, Trade, Africa, China

References

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[2]	Alaya, M. (2004), «L’Investissement Direct Etranger contribue-t-il réellement à la croissance économique des pays du Sud et de l’Est de la méditerranée?», C. E. D, Université Montesquieu-Bordeaux IV.
[3]	Alden, C. (2007) China in Africa, David Phillip, South Africa and zed Books Ltd, London and New-york, 157p.
[4]	Asiedu E (2006). “Foreign Direct Investment in Africa: the role of natural resources, market size, government policy, institution and political stability” World economy 29 (1): 63-77.
[5]	Blomström M and Wang H (1992), “Foreign investment and technology transfer”, European Economic Review, Volume 36, Issue (3), Juin (1992), pp 45-70.
[6]	Brewer T. L., (1991), “Foreign Direct Investment In developing Countries: Patterns, policies, and prospects” PRE Working paper № 34.
[7]	Chaponnière, JR (2008) «Un demi siècle de relation Chine-Afrique. Evolution des analyses” (“A Half-Century of Sino-African Relation: Trend and Analysis’’), Afrique Contemporaine, Vol. 4 № 228, pp. 35-48.
[8]	Chaponnière, J. R (2009) “La dérive des continents: l’Asie et l’Afrique” («The drift of continents: Asia and Africa”), № 350 mars 2009, pp. 5-26.
[9]	Chen Z and Jian J (2009). “Chinese provinces as foreign policy actors in Africa”, occasional paper № 22, South African institute of international affairs, Johannesburg.
[10]	Fine B and Jomo KS (2009) in Sautman, B and Hairong. Y (2007). “Friends and Interests: China’s distinctive links with Africa”, African studies review, 50 (3): 75-115.
[11]	Gaye Adama, (2006), Chine-Afrique; le dragon et l’Autriche, Coll. Etudes Africaine, Paris, Harmattan, 286p.
[12]	Giovannetti, G. and Sanfilippo, M. (2009) “Do Chinese exports Crowd-out African Goods? An Econometric Analysis by country and sector”, The European Journal of Development Research Vol. 21, № 4, pp. 506-530.
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[16]	Morisset J (2000). “Foreign Direct Investment in Africa: Policies also Matter”. Transnational corporations 9 (2): 107-253.
[17]	Pfefferman GP and Madarassy A (1992). “Trends in private Investment in developing countries, international finance corporation, and discussion” paper N0. 14. Washington D. C
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APA Style

Roquia Fane Madouka Koumou, Wang Manyi. (2016). Effects of Chinese Foreign Direct Investment in Africa. Journal of Finance and Accounting, 4(3), 131-139. https://doi.org/10.11648/j.jfa.20160403.15

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ACS Style

Roquia Fane Madouka Koumou; Wang Manyi. Effects of Chinese Foreign Direct Investment in Africa. J. Finance Account. 2016, 4(3), 131-139. doi: 10.11648/j.jfa.20160403.15

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AMA Style

Roquia Fane Madouka Koumou, Wang Manyi. Effects of Chinese Foreign Direct Investment in Africa. J Finance Account. 2016;4(3):131-139. doi: 10.11648/j.jfa.20160403.15

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@article{10.11648/j.jfa.20160403.15,
  author = {Roquia Fane Madouka Koumou and Wang Manyi},
  title = {Effects of Chinese Foreign Direct Investment in Africa},
  journal = {Journal of Finance and Accounting},
  volume = {4},
  number = {3},
  pages = {131-139},
  doi = {10.11648/j.jfa.20160403.15},
  url = {https://doi.org/10.11648/j.jfa.20160403.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20160403.15},
  abstract = {Over the past twenty decades, countless studies both empirical and theoretical have attempted to study the effect of Foreign Direct Investments (FDI) on the economy. A great majority of these studies reached the conclusion that FDI accounts for technology transfer across countries, which in turn increases the total investment in the economy of the host countries. These studies seem also to suggest that FDI contribute relatively more to growth than domestic investment. However, with regard to studies about the Chinese investments in Africa, many authors claimed that Chinese investments in Africa bring more harm than good to the economy. They go even far to claiming that Chinese are predators of the African raw materials, and most authors remain very cautions when it comes to listing the positive effects of these investments. The goal of this paper was thus to weigh out effects (both negative and positive) of the Chinese investments in Africa. The conclusion drawn at the end of this investigation was that far from being all negative, Chinese investments are setting the African economy on the road to achieving economy development. This is because they allow African countries to go towards the modernization, industrialization and strong economic growth. It was however also observed that the claims as to which Chinese are predators of the African raw materials is slightly true. Furthermore, this hanger of raw materials leads to the closing of many local companies. Hence, it was concluded that the harmonization and the improvement of Chinese investments in Africa should pass by the respect for rules dictated by the governments (institutions) and the respect for the international standards.},
 year = {2016}
}

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TY  - JOUR
T1  - Effects of Chinese Foreign Direct Investment in Africa
AU  - Roquia Fane Madouka Koumou
AU  - Wang Manyi
Y1  - 2016/05/20
PY  - 2016
N1  - https://doi.org/10.11648/j.jfa.20160403.15
DO  - 10.11648/j.jfa.20160403.15
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 131
EP  - 139
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20160403.15
AB  - Over the past twenty decades, countless studies both empirical and theoretical have attempted to study the effect of Foreign Direct Investments (FDI) on the economy. A great majority of these studies reached the conclusion that FDI accounts for technology transfer across countries, which in turn increases the total investment in the economy of the host countries. These studies seem also to suggest that FDI contribute relatively more to growth than domestic investment. However, with regard to studies about the Chinese investments in Africa, many authors claimed that Chinese investments in Africa bring more harm than good to the economy. They go even far to claiming that Chinese are predators of the African raw materials, and most authors remain very cautions when it comes to listing the positive effects of these investments. The goal of this paper was thus to weigh out effects (both negative and positive) of the Chinese investments in Africa. The conclusion drawn at the end of this investigation was that far from being all negative, Chinese investments are setting the African economy on the road to achieving economy development. This is because they allow African countries to go towards the modernization, industrialization and strong economic growth. It was however also observed that the claims as to which Chinese are predators of the African raw materials is slightly true. Furthermore, this hanger of raw materials leads to the closing of many local companies. Hence, it was concluded that the harmonization and the improvement of Chinese investments in Africa should pass by the respect for rules dictated by the governments (institutions) and the respect for the international standards.
VL  - 4
IS  - 3
ER  -

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Author Information

Roquia Fane Madouka Koumou

Department of Finance, Capital University of Economics and Business, Beijing, China
Wang Manyi

Department of Finance, Capital University of Economics and Business, Beijing, China

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APA Style

Roquia Fane Madouka Koumou, Wang Manyi. (2016). Effects of Chinese Foreign Direct Investment in Africa. Journal of Finance and Accounting, 4(3), 131-139. https://doi.org/10.11648/j.jfa.20160403.15

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ACS Style

Roquia Fane Madouka Koumou; Wang Manyi. Effects of Chinese Foreign Direct Investment in Africa. J. Finance Account. 2016, 4(3), 131-139. doi: 10.11648/j.jfa.20160403.15

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AMA Style

Roquia Fane Madouka Koumou, Wang Manyi. Effects of Chinese Foreign Direct Investment in Africa. J Finance Account. 2016;4(3):131-139. doi: 10.11648/j.jfa.20160403.15

Copy | Download

@article{10.11648/j.jfa.20160403.15,
  author = {Roquia Fane Madouka Koumou and Wang Manyi},
  title = {Effects of Chinese Foreign Direct Investment in Africa},
  journal = {Journal of Finance and Accounting},
  volume = {4},
  number = {3},
  pages = {131-139},
  doi = {10.11648/j.jfa.20160403.15},
  url = {https://doi.org/10.11648/j.jfa.20160403.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20160403.15},
  abstract = {Over the past twenty decades, countless studies both empirical and theoretical have attempted to study the effect of Foreign Direct Investments (FDI) on the economy. A great majority of these studies reached the conclusion that FDI accounts for technology transfer across countries, which in turn increases the total investment in the economy of the host countries. These studies seem also to suggest that FDI contribute relatively more to growth than domestic investment. However, with regard to studies about the Chinese investments in Africa, many authors claimed that Chinese investments in Africa bring more harm than good to the economy. They go even far to claiming that Chinese are predators of the African raw materials, and most authors remain very cautions when it comes to listing the positive effects of these investments. The goal of this paper was thus to weigh out effects (both negative and positive) of the Chinese investments in Africa. The conclusion drawn at the end of this investigation was that far from being all negative, Chinese investments are setting the African economy on the road to achieving economy development. This is because they allow African countries to go towards the modernization, industrialization and strong economic growth. It was however also observed that the claims as to which Chinese are predators of the African raw materials is slightly true. Furthermore, this hanger of raw materials leads to the closing of many local companies. Hence, it was concluded that the harmonization and the improvement of Chinese investments in Africa should pass by the respect for rules dictated by the governments (institutions) and the respect for the international standards.},
 year = {2016}
}

Copy | Download

TY  - JOUR
T1  - Effects of Chinese Foreign Direct Investment in Africa
AU  - Roquia Fane Madouka Koumou
AU  - Wang Manyi
Y1  - 2016/05/20
PY  - 2016
N1  - https://doi.org/10.11648/j.jfa.20160403.15
DO  - 10.11648/j.jfa.20160403.15
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 131
EP  - 139
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20160403.15
AB  - Over the past twenty decades, countless studies both empirical and theoretical have attempted to study the effect of Foreign Direct Investments (FDI) on the economy. A great majority of these studies reached the conclusion that FDI accounts for technology transfer across countries, which in turn increases the total investment in the economy of the host countries. These studies seem also to suggest that FDI contribute relatively more to growth than domestic investment. However, with regard to studies about the Chinese investments in Africa, many authors claimed that Chinese investments in Africa bring more harm than good to the economy. They go even far to claiming that Chinese are predators of the African raw materials, and most authors remain very cautions when it comes to listing the positive effects of these investments. The goal of this paper was thus to weigh out effects (both negative and positive) of the Chinese investments in Africa. The conclusion drawn at the end of this investigation was that far from being all negative, Chinese investments are setting the African economy on the road to achieving economy development. This is because they allow African countries to go towards the modernization, industrialization and strong economic growth. It was however also observed that the claims as to which Chinese are predators of the African raw materials is slightly true. Furthermore, this hanger of raw materials leads to the closing of many local companies. Hence, it was concluded that the harmonization and the improvement of Chinese investments in Africa should pass by the respect for rules dictated by the governments (institutions) and the respect for the international standards.
VL  - 4
IS  - 3
ER  -

Copy | Download