China’s economic engagement in Africa has generated a lot of controversy.Headlines in Western newspapers have read “Into Africa: China’s Wild Rush,” or “China in Africa: Investment or Exploitation?” At the same time, China is more popular among African populations (70 percent with a favorable view) than it is in Asia, Latin America, or Europe, according to Pew surveys. The popularity is no doubt linked to the fact that African growth rates have accelerated between the 1990s and the 2000s, and China’s trade and investment is part of the reason.
A snapshot of Chinese investment in the continent
In our new paper, “Why is China investing in Africa? Evidence from the firm level,” we investigate one part of this engagement, China’s direct investment (called overseas direct investment, ODI by the Chinese). Our main innovation is to work with the firm-level data compiled by China’s Ministry of Commerce (MOFCOM). All Chinese enterprises making direct investments abroad have to register with MOFCOM. The resulting database provides the investing company’s location in China and line of business. It also includes the country to which the investment is flowing, and a description in Chinese of the investment project.