Compare Africa, Latin America and Asean as Potential Investment Destinations of China’s Outward Fdi

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Compare Africa, Latin America and ASEAN as potential investment destinations of China’s outward FDI China has become a capital-surplus economy and its overseas investment has grown apace. Although its outward investment is still small in absolute terms, especially compared to the huge inward flow, China's overseas enterprises have been quietly gaining importance as new sources of international capital. They are now globally diversified and involved in a wide variety of sectors, including banking, manufacturing and natural resource exploitation. In the coming years, Chinese outward investment is expected to accelerate. But what is the best destination for China to do the investment? In order to compare Africa, Latin America and ASEAN as potential investment destinations of China’s outward FDI, we should have a clear understanding about the business environment. Environment of Business includes the economic and legal environment, the technological environment, the competitive environment, the social environment, and the global business environment. These five factors can potentially have both a positive and a negative impact on the business. Let’s begin with the first one--- the economic and legal environment. Financial backers often complain of legal and judicial uncertainties in Africa. This has obviously a dissuasive impact on international investors and weighs heavily on one of Africa’s main structural problems, which is: lack of investment. However, Africa’s subsoil is so rich of commodities that are essential to the world’s economy that Africa can simply not be avoided by foreign investors. The birth of the Organization for the Harmonization of Business Law in Africa (“OHADA”) was a consequence of the awareness by certain African states - mostly former French colonies - of the challenge represented by the globalization of markets.

While in Latin America it comes to formulating cluster-oriented policies. Clustering seems to enable...
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