Transcript Chinese Investment in Africa

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Chinese Investment in
Africa
Danielle A. Daley
Hermila Yifter
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Question I
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What are the economic affects on African nations in terms of
GDP (per) capita due Chinese investment?
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Question II
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Why is China investing in Africa (motives)?
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Hypothesis
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From limited research, we have come to the conclusion that
there is a positive correlation between growth in GDP in
Africa and increase in Chinese investment
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Motives and Factors
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To seek lower cost for their operations and productions
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To seek foreign markets
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To seek resources
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To seek strategic assets
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To diversify
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Type of government
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African Countries
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Sudan
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Angola
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Nigeria
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Ethiopia
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Zambia
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South Africa
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Algeria
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GDP
Ethiopia
Angola
6000
1000
900
5000
800
4000
700
600
3000
Series1
500
2000
Series1
400
300
1000
0
200
100
0
19901992199419961998200020022004200620082010
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GDP
Sudan
2500
Zambia
1600
1400
2000
1200
1500
1000
800
Series1
1000
600
400
500
200
0
0
Series1
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Types of Investment
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http://www.heritage.org/research/projects/china-globalinvestment-tracker-interactive-map
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Selection Problem
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Did China start to invest in these specific countries, because
they knew there was potential profit?
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Did Chinese investment cause the GDP to increase?
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Appeal of Chinese Investment
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“ In contrast to western financial institutions, China employs
a no strings attached method of investment in a resourcesfor – infrastructure model.” – Laufman, Adam Chinese
Investment in Africa (2005)
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Take Away Points
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Chinese Investment in China does affect African nation’s
GDP
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Compare GDP of Africa and FDI of China
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Main motives of China in African nations are self – interested
in natural resources and strategic assets
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Our research questions does have mutual causation, but we
are focusing does Chinese investment cause growth in GDP