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Conditions for Foreign Investment between China and the African Continent Essay Example

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Conditions for Foreign Investment between China and the African Continent

Conditions for Foreign Investment between China and the African Continent. According to the research findings, it can, therefore, be said that China has to be the main beneficially of the current good business relations with African countries. The country’s firms have been able to acquire cheap resources from Africa, an element that has led to a dramatic decrease in the production cost. Acquisition of cheap raw materials from Africa has helped Chinese firms remain competitive both in the domestic and in the global market with even major conglomerates from the west targeting to establish their operations in China in order to compete effectively. Electronics, technology, and manufacturing are some of the industries that have been impacted significantly to a point that most of the electronic companies like Lenovo, Acer among others have already shifted their operations to China.

There have been numerous factors that have contributed to the continuous growth in foreign direct investment between China and Africa, with the major determinants of FDI covered under the acronym PESTEL (political, economic, social, technological, environmental & legal) appearing to be applied. However, the main factors that have flourished foreign investment between the two appear to be political, social, and economic factors. As mentioned in the introduction, the insatiable appetite for resources by Chinese firms or China government is one of the main factors that has contributed to the creation of favorable trade relations between the two business blocks. China is well developed with numerous industries that are demanding abundant sources of raw materials and energy for their operation with oil being one of the major resources that the country is targeting from the African continent. The economy in China has been growing rapidly thus creating a pressing need to have alternative sources of oil since the mid-20th century. The desire to engage African countries in China Foreign Policy was drafted many decades ago with some economists tracing it back to 1970s during the era of Mao Zedong. Dominating or having control on the source of raw materials as well as having adequate energy security are some of the major factors that most developed economies are targeting in order to remain competitive. Conditions for Foreign Investment between China and the African Continent.

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preview essay on Conditions for Foreign Investment between China and the African Continent
  • Pages: 8 (2000 words)
  • Document Type: Essay
  • Subject: Business
  • Level: Undergraduate
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