Chinese Investments in Africa: Implications for Entrepreneurship

Chinese Investments in Africa: Implications for Entrepreneurship

Eva Esther Shalin Ebenezer (Pentecost University College, Ghana), Wei Shi (Saginaw Valley State University, USA) and Wayne E. Mackie (Saginaw Valley State University, USA)
DOI: 10.4018/978-1-4666-7533-9.ch006

Abstract

The chapter focuses on Chinese investment in Africa and its general impact on African businesses and its specific implications for entrepreneurship in Africa. This chapter first provides a historical overview of China's economic development to explain why China has the ability to invest in Africa. Two types of investments from China are considered: the investment from the Chinese government and the investment from various Chinese firms. This study highlights which countries the investments targeted, the amount of capital, and the business areas the Chinese and investors emphasize. The final segment highlights both positive and negative implications of the investment activities for both China and Africa. In particular, this segment emphasizes the implications for entrepreneurship in Africa.
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Chinese Investment In Africa

China over a long period of time has been searching for natural resources to meet the needs of its domestic industries. On the one hand Africa has a lot of natural resources that China may desire to gain. On the other hand, Africa as an emerging market with a huge range of demands may need foreign countries to fill and exploit. It therefore seems like a promising win-win prospect.

According to Zafar (2007), China and Africa have valued more than $50 billion transactions as of 2006. This includes China importing oil from Angola and Sudan; China acquiring timber from Central Africa; and copper from Zambia. Due to the Chinese demands for large amounts of oil and metals from Africa, the real GDP of sub-Saharan Africa appears to rise because of the high prices at which these commodities are traded. However, factually, it is not only Sub-Saharan Africa but the entire continent that eagerly needs a lot of Chinese capital as aid and investment in infrastructure construction. The trade, therefore, appears to be of the utmost benefit to all, as China has brought much-needed funds to the mainland in exchange for its of numerous natural resources. Chinese investment in Africa has come in two forms: as investment from the Government and investment from Chinese firms.

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