Chinese enterprises investing in Africa: economic growth and structural transformation

LIU Chen1 GE Shunqi2

(1.School of International Relations and Public Affairs, Fudan University)
(2.Institute of International Economics, Nankai University)

【Abstract】Investment by Chinese enterprises in Africa has grown rapidly in recent years. This has aroused extensive attention from the international community. The article examines the business activities of Chinese enterprises and analyzes their role in the economic growth and structural transformation of African countries. We found that Chinese investment has been growing rapidly in increasing numbers of industries and countries in Africa, with private companies becoming the mainstays of investment in the continent. Chinese investment has raised capital stock, increased jobs and improved infrastructure in Africa, thus making important contributions to the host economies. At the same time, it has also produced some external effects in terms of market and environment in the host countries. Chinese enterprises have also promoted the technological development of host countries through technological spillover and propelled the development of related local enterprises, thus moving forward the integration of African countries into the world market. However, Chinese enterprises also face such constraints as low human capital, high production costs and volatility of government policies in the host countries. Therefore, the Chinese government should strengthen communication and cooperation with governments of the host countries, help African countries improve infrastructure and business environment, and provide policy support for Chinese enterprises. Meanwhile, Chinese enterprises should abide by international rules, promote technology transfer and labor training, build local industrial chains, and play a positive role in Africa’s industrialization and inclusive growth.

【Keywords】 Chinese enterprises; investment in Africa; economic growth; structural transformation; industrialization;

【DOI】

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This Article

ISSN:1007-0974

CN: 11-3799/F

Vol , No. 05, Pages 9-31+4

September 2018

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Article Outline

Abstract

  • 1 Current situation of Chinese enterprises investing in Africa
  • 2 Influences on economic growth in Africa and existing problems
  • 3 Contributions to structural transformation of African economy and existing problems
  • 4 Suggestions to governments and enterprises
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