Following the financial crisis that hit Asia in the late 1990s, the Chinese government introduced its ‘Going Out’ or ‘Going Global’ strategy. The country had been open to inward FDI for a number of years at this stage, and the time had come to promote Chinese companies globally.
While Africa considers itself as a significant destination for China FDI, the numbers indicate that Chinese projects and investment is significantly smaller than it’s investments in other parts of the western world. To see exactly where the money is going, visit this link – Where is China Investing?
The government aimed to increase investment, promote its Chinese brand of companies and improve the country’s free market. The policy became one of the government’s ‘four modernisations’ and encompassed a range of schemes to assist outward FDI, such as using currency reserves to support foreign investment, offering tax rebates to investors and encouraging Chinese embassies globally to offer more and better financial assistance.
The result has been a boom in Chinese outward FDI. Between January 2009 and December 2013, greenfield investment monitor fDi Markets recorded a total of $161.03bn in Chinese outward FDI, creating almost 300,000 jobs across the world. During this period, in terms of investment projects, China was the ninth largest source country for FDI, peaking in 2011 with 429 projects. In terms of both capital expenditure and job creation, China was ranked seventh globally. Source: FDI Magazine
If Chinese statistics are to be believed, about three-fourths of its FDI goes to Hong Kong. But no doubt a lot of that greenfield investment is taking place at mining sites in Africa.