The Impacts of China's Foreign Investment on Africa Society

Topics: Africa, Sub-Saharan Africa Pages: 7 (2432 words) Published: April 28, 2013
The Impacts of Chinese Foreign Investment to the African Economy

I. Introduction
Ever since the last 10 years of 20th century, with trend of global economy integration and cooperation, the significance of African countries’ economies has became irreplaceable in the global economic stages. In the past two decades, The African continent is no longer known only by its abundant natural resources, but also the increasingly sophisticated environment for foreign investment and the very potential markets that are full of opportunities and needs. These factors have attracted more and more foreign investors to expand their investment scales and varieties. As one of these investors, China, with the blooming development of its economy to be the new emerging global power, has built a strong economic relationship with African countries and moved it into a new stage where both pros and cons exist from the prospective of African society. (Alessi) China’s growing economic capacity in the past few decades can only be described as phenomenal; it turns China from an underdeveloped country that suffered from poverty into one of the largest economic bodies worldwide. With such outcome, China recently shifts its focus to secure long-term economic development, which consequently involves gaining more energy supplies and utilizing advantageous international trades to sustain its rapid growth of national GDP. As a result, the Chinese investors approach to the African markets. While sharing the pie with the US, Japan, and Europeans certainly brings huge benefits to China, it also brought the criticism from international society; these criticism mainly focus on the excessively exploitative practices in the African energy market and aggressive business engagements in many manufacturing industries. Some of these are particularly criticized for ethical problems and failure to assure human rights, also the whole foreign investing action of Chinese government is questioned and challenged for its noninterference policy in the affairs of African government. (Alessi) This paper will present the current situation of the investment and trading relationship between China and African countries; also it will investigate and analyze such relationship from a comparative perspective. By presenting the findings from both political and social aspects, the paper will follow with arguing that the root of these problems is that China’s actions are initiated by self-interested plan and its long-term strategic game, which lead to the conclusions that the negative influences are inevitable side-effects.

II.Literature review
i.Positive effects
While the questions have to be answered about the negative influences China has brought, there are many advantages that African society gained from its engagement with China. Firstly, from the political perspective, the engagement between China and the African countries gives both parties the leverage they need in dealing with the western society. According to Renard in his scholar journal “China’s Trade and FDI in Africa”, The China-Africa trading relation first starts in the post colonial period. The bonding was established based on mutual interest of African countries and China government. After the People’s Republic of China become independent since 1949, the Chinese government has been exploring and extending its influence in other developing countries in order to reinforce its international influence and status in the United Nations. It becomes very obvious that one efficient way to achieve that is financially support the governments of African countries that are newly independent or try to break away from its former colonial country. On the other hand, many African countries were seeking supports to help them against the colonies at time. One example will be the economic and technical cooperation agreement China signed with Guinea in the year after Guinea reached its independence. In this deal,...
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