How much has China invested in Africa (FDI, or foreign direct investment)? How many Chinese companies are active there? We don’t really know. But for what it’s worth, here are the annual official figures for Chinese investment in Africa, from the Chinese Ministry of Commerce (MOFCOM). The China Statistical Yearbook from the National Bureau of Statistics of China is an additional source.
Chinese FDI Flows to Africa (US$ billion)
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
0.39 0.52 1.57 5.49 1.44 2.11 3.17 2.52 3.37 3.20
Source: MOFCOM. China Statistical Yearbook.
This data doesn’t tell us all that much. It has numerous problems, as I’ve noted here before, although many of these problems are also shared by other countries’ official FDI data. On the one hand, Chinese investment is usually way overestimated by others, because people think that all of those MOUs actually lead to flows of money. They don’t. Some investment projects are financed by loans. These are not going to show up as FDI either. But the numbers are understated because they don’t include Chinese money that is parked in an offshore financial center (British Virgin Islands, Cayman Islands, even Hong Kong), they don’t capture smaller investors, and they don’t record acquisitions that include African assets, but that took place in another jurisdiction (i.e. the purchase of Addax at over $7 billion: Addax has several African properties, and properties in Iraq, but the investment appears as “Switzerland” which is where Addax was domiciled).
The most recent white paper on China-Africa Trade and Economic Cooperation noted that between 2009 to 2012, China’s direct investment in Africa grew at an annual rate of 20.5%. Derek Scissors, formerly at Heritage, and now at AEI, keeps a China investment tracker for FDI projects above $100 million. His data is pretty good as far as commitments go, but leaves out all the smaller projects (manufacturing, mainly) and doesn’t count some investments (like Addax), acquisitions that include African assets but where the home of the company was located elsewhere. On the other hand, it may over count, as it represents publicly stated commitments (which could be exaggerated) rather than actual flows. Finally, it represents gross flows, not net (it doesn’t account for negative investment outflows).
China Investment Tracker (Derek Scissors) Chinese FDI Projects in Africa (US$ billion)
How does this all compare with the US? Not easy to do. Below are net flows (inflows minus outflows) of US FDI in Africa. In 2012, for example, US companies disinvested $753 million in Algeria, and $3 billion in Angola. Disinvestments like these are not reflected in Derek Scissors’ China data and are probably not reflected in the MOFCOM China data either.
How many Chinese companies are active in Africa? The figure on 2000 firms in 50 African countries comes from China’s Ministry of Commerce. More precise numbers that I have from MOFCOM state that 2372 investments have gone through the required approvals for Africa, as of March 2013. Some firms will have multiple projects. On the other hand, it probably doesn’t include a number of small enterprises that fly under the radar — including all the Chinese shops — so the true number of “firms” is undoubtedly higher.
China Africa Research Initiative 