Business
Understanding what drives China’s growing investments in Africa
China’s investment in Africa represents a small but rapidly growing piece of total Chinese outward foreign direct investment worldwide.
Africa is the third largest recipient of China’s outward foreign direct investment behind Asia and Europe, totaling nearly US$90 billion.
Today, China not only recognizes Africa as a source of energy and natural resources but also as a rapidly expanding market for Chinese goods. Moreover, Africa represents an additional destination for Chinese manufacturing to move offshore as profit margins on the mainland deteriorate and the PRC government promotes policies seeking to move the Chinese economy up the value chain. Key destinations for Chinese investment include South Africa, Nigeria, and Algeria in sectors such as energy, transportation, and metals.
