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China in Africa: The Real Story

Chinese Investment in Africa: How Much?

Deborah Brautigam

How much has China invested in Africa? I just received a slightly breathless invitation to an event to be held at the Ritz-Carlton in Beijing, which led off with this statement:  "China's investment in Africa has increased a staggering 30-fold since 2005, with 2,000 Chinese firms now present in 50 African countries." 

Really?

Let's look first at the math. Here are the annual official figures for Chinese investment in Africa from MOFCOM:

Chinese FDI Flows to Africa (US$ million)

2005   2006   2007   2008   2009   2010   2011   2012
  392     520   1574   5491   1439   2112   3173   2520

Source: MOFCOM. This data has problems, as I've noted here before, although many of these problems are also shared by other countries' official FDI data,  And the leap from $392 million to $2520 million is not "a staggering 30 fold" increase, but a factor of 6.

Let's look at accumulated FDI figures:

Chinese FDI Stock in Africa (US$ billion)

2005   2006   2007   2008   2009   2010   2011   2012
1.60    2.56    4.46    7.80    9.33   13.04  16.24  21.23

Source: MOFCOM. The figure for 2012 is higher by a factor of 13, compared with 2005.

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%. This is a brisk clip, but I'm not sure I'd call it a "staggering" rate.  

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.