China's Investment in Africa

China Investments in Africa

International Business

MGCR-382

Developing in high speed, Chinese industries’ demand for raw materials, natural resources, export opportunities and support from United Nations are increasing (Juma, Calestous, and Ayittey George, 2010). Africa, as a less developed continent with abundant supplies, becomes a crucial source for China to import various needing resources. Basically, rather than private companies’ collaboration, the co-operation is between the government of China and the governments of African countries. Since 2000, China’s investments in Africa are expanding; especially in 2005, Africa attracted China’s foreign direct investments of US $29,459,000,000 (Passport GMID, 2008). China’s assorted investments bring some of African countries substantial benefits: building and improvement of local infrastructure, receiving big loans, and obtaining new technologies and skills in economies. Those advantages contribute to growth in economies of African countries. In controversy, investments to Africa from China are accompanied by disadvantages: human rights abuses, obstruction of the African manufacturing market and the sales of weapons as bribery.

Nigeria, one of the countries with the most abundant resources in Africa becomes an important source country for China, is explored in mining and oil resources, and is invested in infrastructure such as roads, bridges and railway networks. From February 10th in 1971, China and Nigeria set up formal diplomatic relationship. The relationship of two countries is getting closer since then (Swartz, Spencer, and Will Connors, 2010). In 2006, during the visit of Hu JingTao, China’s Chairman, in Nigeria, China obtained four oil drilling license and the right to establish power stations; in exchange, China would invest in oil and infrastructure in Nigeria (Swartz, Spencer, and Will Connors, 2010). This agreement became an influential step in the China-Nigeria partnership development. The...