4th April 2007 – Africa is becoming an ever more prominent location for foreign direct investment (FDI) from China.
Although still heavily investing in economies all over the world, including in Latin America, the Caribbean and within Asia itself, FDI in Africa coming from China is steadily on the rise.
The UN has released a report that has been produced by two of its organizations and focuses on Asian FDI in Africa, and says that they expect China to be one of the biggest sources of FDI in the continent in the near future.
The report has been released by United Nations Development Program (UNDP) and United Nations Conference for Trade and Development (UNCTAD) and set out to document the increasing presence of China within Africa.
After France and the US, China is Africa’s largest trade partner. Over the last year China has invested a total of $50 billion into 48 different African countries, which is representative of the growth in trade relations between the two.
The UN assumes that the level of FDI from China in Africa will continue to grow and this is widely considered to be a valid claim due the intertwined nature of both Africa and China’s economic development.
The increasing amount of investment in Africa has resulted in improvements in infrastructure in nations all over Africa that has been necessary for a long time.
The rapid growth in diplomatic relationships between the two has in turn helped to increase the strength of trade relations.
Recently there have been more and more national visits between Africa and China and the China-Africa Business Council, established by both the UNDP and China back in 2005, was created in order to provide support China’s private sector to promote business in countries like Mozambique, Ghana, Nigeria, Cameron, Tanzania and South Africa.
China believes in operating in Africa with the concept of ‘no political strings attached’ and both sides hold the belief that the operations between them should never interfere with eithers affairs.
Cooperation, in terms of economically, has grown substantially in the last few years and China says that it hopes to increase the amount of trade with Africa to over $100 billion US by 2010.