Twelfth Global Studies Conference

Abstract

This paper examines Chinese incursion into Sub-Saharan Africa with a view to determining the reasons for, as well as verify if and how some of such partnerships are benefiting the various parties involved. While Asghar and Hussain (2014) identified financial development as a factor that powers economic growth in the developing countries, the duo also see this as a two-way traffic with foreign direct investment (FDI) and subsequently, trade openness, as factors powering growth. To be more specific, Dong and Fan (2017) examined the effects of China’s aid and trade on its overseas direct investment (ODI) in 50 African countries from 2002 to 2013, and both concluded that the aid China offers will crowd out its investment in these countries. Case study analysis is the main method of inquiry. Mourao (2018) pinpointed dynamic national markets with a large population and significant forest area as determinants of Chinese preferences. Mourao affirmed that these factors constitute the most preferred reasons for the allocation of Chinese Foreign Direct Investment in 48 African countries between 2003 and 2010. Mourao also identified increased political stability and regulatory quality, with government effectiveness as other factors that make this move efficient. This paper investigates possible implications such as whether these factors are driven locally and/or by outside influence, and why; as well as possible short and long term effects, while identifying likely engines of growth with accompanying implications.