1. The role of Chinese FDIs
and enterprise in Africa's
economy
William So
Member of the Board of Directors,
Africa Business Media
July, 2011
ckwso@hotmail.com

2. Chinese FDIs
 Sources of funding
– Government and State-owned Enterprises
 Major source of current funding
– Private Sector
 Growing but relatively small

3. Funds from Government
 Sovereign  Direct Investment
Loan/Donation – More popular in recent
– Major source of years
Chinese funding – Executed through
– Sovereign loans SOEs
through Chinese Banks – Acquisitions or new
– Non-cash donations local entities
– Infrastructure focused – Resources focused

4. Funds from Government
 Sovereign Loan/Donation  Investment
Chinese
Government
African
Government

5. Funds from Government
 Sovereign Loan/Donation  Investment
Chinese Chinese
Government SOE
African
Government

6. Funds from Government
 Sovereign Loan/Donation  Investment
Chinese Chinese
Government SOE
African
Government

7. Funds from Government
 Sovereign Loan/Donation  Investment
Chinese Chinese Chinese
SOE
Government SOE Gov
African
Government

8. Funds from Government
 Sovereign Loan/Donation  Investment
Chinese Chinese Chinese
SOE
Government SOE Gov
African African
Government Government

9. Funds from Government
 Sovereign Loan/Donation  Investment
Chinese Chinese Chinese
SOE
Government SOE Gov
African African
Government Government

10. Funds from Government
 African countries get infrastructure for
sustainable development
 Cash goes back to Chinese SOEs or
African government, not directly into the
economy
 Not very effective in new job creation
 Not every African feels the benefit

11. Funds from Private Sector
 Cash Injection into the economy
Chinese
Companies e
Africa
Operation e

12. Funds from Private Sector
 Cash Injection into the economy
Chinese
Companies e
African
Employeee
Africa African
Operation e Suppliers e

13. Funds from Private Sector
 Cash Injection into the economy
Chinese
Companies e
African
Employeee
Africa African
Operation e Suppliers e

14. Funds from Private Sector
 Cash Injection into the economy
Chinese
Companies e
African
Consumer
African
Employee
Africa African
Operation e Suppliers e

15. Funds from Private Sector
 Cash investment
 Diverse industry focus
 Many targeted at the African consumer
market
 Use more local labour
 More visible to consumers