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Jia Huai: Africa Represents Great Investment Opportunities and High Risks

Sino-Africa investment 615w (att UK China Locator)

Weekly Mandarin Translation

The 8th Chinese Enterprises Outbound Investment Conference was held at the Beijing International Hotel on April 16-17, 2014. Huai Jia, Vice Minister of the Economic and Information Department, delivered a speech on investment in Africa at a sub-conference, in which he says that "Africa is a hot spot for investment. However, investment in Africa also requires high risks."

中国经济网北京4月18日讯(记者 苗苏 ) "第八届中国企业跨国投资研讨会"于4月16日至17日在北京国际饭店举行。中国贸促会经济信息部副部长贾槐昨天在"投资非洲分会场"发表讲话时说,非洲大陆是一片投资热土,机会有很多但潜在风险也很多。

This article has been translated from Mandarin. Click here to read the original version on China's Economic Net.

"As we all know, Africa is a beautiful continent with great investment opportunities. Today, Africa is an important trade partner with China. In recent years, Africa-China cooperation developed rapidly, attracting increasing attention from enterprises and societies around the world." According to a white paper on "China-Africa Economic and Trade Cooperation"  published by the Information Office of the State Council in August 2013, China's foreign direct investment (FDI) in Africa increased from $1.44 billion to $2.52 billion, with an annual growth rate of 20.5% from 2009 to 2012. Over the same period, China's cumulative direct investment in Africa increased from $9.33 billion to $21.23 billion, 2.3 times the 2009 figure. Noticeably, the global FDI to Africa has declined since 2009, while China's FDI has increased rapidly throughout the years.

Huai Jia also reminds the investors of the potential investment risks due to the weaker legal framework in Africa compared to developed countries. He says that "regulations and laws in Africa are still inadequate. Therefore, China's enterprises should take on more corporate social responsibility and protect the local environment."

He also suggests that "Chinese enterprises should conduct in-depth research about African countries' policies and investment environment to effectively avoid investment risks if they want to gain expected returns in Africa. Additionally, Chinese enterprises should also pay great attention to diffusing themselves into local environment, increasing the local employment rate, and participating in local welfare improvement when they are gaining profits in Africa. This win-win structure would enable China's investment to gain African countries' support. "

Article translated by Qiuyun Shang, Staff Intern for the Kissinger Institute at the Wilson Center.

Photo courtesy of UK China Locator via Wikimedia Commons.

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