Draft Concept Paper

Topics: Investment, United States, Africa Pages: 5 (1702 words) Published: July 22, 2013
Draft Concept Paper

Abraham Kamara

University of Phoenix

Foreign investments in Sub-Saharan African were mainly by western nations like Great Britain and United States of America during and after colonial era (Marafa, 2007). However, in the last decade Chinese investment has exceeded that of African traditional trade partner (United States). China’s trade investments in Africa surpassed the United States in 2009; China invested $ 90 billion compared to $ 86 billion invested by the United States (Hu, 2012). The increased China investment and the slowdown of United States in the region have caught the attention of many business, and political leaders around the world.

The motives of China’s investments in Africa’s trouble spots like Ethiopia during their way with Eretria, Zimbabwe in 2007 when the regime was suppressing political in the country was seen by many outside the normal business practices (Hu, 2009). China on its part argues its business operations do not interfere on matters related to internal political strife in Africa. When western nations withdraw investments in Africa’s trouble spots China see this opportunity to gain influence and access to natural resources in the region (Marafa, 2007). African leaders like Robert Mugabe welcome the present of China in Sub-Saharan Africa as an alternative to the United States (Hu, 2012).

Critics of the United States (USA) trade policies in Africa, note America is only interested in their own security hence the sending of more military personnel to Africa after the attack at the world trade center. China invest in tangible projects like road construction, sports stadium things the local people see and use makes it more compelling for African leaders to view China’s trade as an alternative to the United States (Hansen, 2013). Hansen also states, American businesses do not enjoy bilateral trade treaties and double taxation treaties with many countries in the region to guarantee the safety of their investments and remove the burden of paying taxes to the host countries and additional taxes when transfer their overseas profits in the United States. Statement of the Problem:

Investments by the United States in Sub-Saharan Africa slowed down in the last decade and absent in some sectors of African commerce (Henson, 2013). China on the other hand with the second largest world economy increased it investments in all aspects of Sub-Saharan economic sectors such as construction, mining, human capital development, and health care projects. China’s investments in tangible projects won hearts and minds, and perceived as true trade partners, the continue military buildup by America have critics of policy view the country as not true trade partners with Africa (Marafa, 2007). The value of China’s trade in the region surpassed USA in 2009, and in 2011 the value of China in Sub-Saharan Africa reached $160 billion. In the last two years USA administration made moves to counter China’s trade influence in the region, the recent visit by president Obama in three African in Sub-Saharan Africa indicates U S willingness to reengage in the region.

This qualitative phenomenological study will use semi-formal direct interviews to examine the perceptions of 20 entrepreneurs previously or conducting business investments in Sub-Saharan Africa. The data collected will seek to provide information to governments, business executives, and potential investors on challenges and investment opportunities available in African markets. The study will seek to examine China’s business approach in African markets and long term implications. Purpose of the Study:

America was one of Sub-Saharan traditional foreign trade partner but in the last decade, investments from U S A slowdown in the region. In contrast a non-traditional trade ally China surpassed its investment in the region by 2009 (Hu, 2009). The...

References: Brookes, P. (2007). Into Africa: China’s grab for influence and oil. Heritage lecture notes. The Heritage.
Buckley, P., Casson, m. (1986). The future of multinational enterprise, London: MacMillan.
Brown, D. E. (2011). Hidden dragon, crouching lion: How China’s advance in Africa is underestimated. U. S. Army war college
Carika, C., Elsabe, L., Henri, B. (2012). Chines foreign direct investment in Africa: Making sense of a new economic reality. African journal of business management 6(47), p11583-11597.
Chang, A. (2006). From brothers to partners: China Africa build strategic ties. Special supplementary for the forum on China-Africa corporation.
Hansen, P. C. (2013). Unleashing the U. S. investor in Africa: A critique of U. S. policy towards the continent. The Heritage Foundation.
Hu, R. (2012). Chines investment in Africa: A dangerous game. American foreign policy. Princeton student editorial on global politics.
Marafa, L. M. (2007). Africa: Business and development relationship with China: Seeking moral and capital values of the last economic frontier. ABD
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