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Licensed Unlicensed Requires Authentication Published by De Gruyter September 22, 2011

Chinese Investment in Africa

Mark Klaver and Michael Trebilcock

Chinese investment in Africa has increased rapidly over the past two decades. This paper asks how, why, whether it is good or bad, and what Africans can do about it.

On how, the Chinese government actively promotes liberal investment regulations in Africa. It also keeps close contact with major Chinese enterprises investing on the continent.

On why, the motivation behind Chinese investment in Africa is self-interested: China primarily wants Africa’s natural resources. China also seeks to access local markets, and to capitalize on Africa's preferential trade access to the West.

On whether Chinese investment is good or bad for Africa, African economies are growing at unprecedented rates, partly due to Chinese investment. This paper highlights seven reasons Chinese investment contributes to African growth. But it also reveals three drawbacks to Chinese investment in Africa.

On what Africans can do about Chinese investment, Africa can capitalize on it by proactively promulgating a tax code that promotes African development. The tax code's goal should be to use Chinese investment and natural resource revenues to develop Africa’s manufacturing sector through infrastructure, special economic zones, and education.

Thus, this paper maintains that although Chinese investment in Africa is not unambiguously advantageous, it presents major opportunities for African development.

Published Online: 2011-9-22

©2012 Walter de Gruyter GmbH & Co. KG, Berlin/Boston