Data: Chinese and American FDI to Africa
Chinese investment in africa
1. Chinese FDI in Africa Data Overview
Chinese FDI annual flows to Africa, also known as OFDI (“Overseas Foreign Direct Investment”) in Chinese official reports, have fluctuated throughout the past decade. The most recent white paper on China-Africa Trade and Economic Cooperation noted that between 2009 and 2012, China’s direct investment in Africa grew at an annual rate of 20.5%. Flows peaked in 2008 at US$5.5 billion (although this was a function of the purchase of 20% of the shares of Standard Bank in South Africa). As noted in the chart above, 2008 was also the only year in the past decade where Chinese FDI flows to Africa exceeded those from the U.S. The top 5 African destination of Chinese FDI in 2014 were Algeria, Zambia, Kenya, Republic of Congo, and Nigeria. Algeria accounted for more than 20% of all Chinese FDI flows to Africa in 2014. These figures appear lower than expected. There are good reasons for this, as we explain below.
2. CARI FDI Data Compilation
CARI has combined the ODI figures from both the China Statistical Yearbooks and Statistical Bulletins of China's Outward Foreign Direct Investment of various years. The data has been converted from 10,000 US$ to millions of USD. We collect annual figures for US outward direct investment for comparison from the Bureau of Economic Analysis (BEA), U.S. Department of Commerce.
3.1 Official Data
The earliest year for which we have reports of Chinese Overseas Direct Investment (ODI) stock/flow data is 2003, with this data first reported in the 2007 China Statistical Yearbook (CSY) and the Statistical Bulletin of China's Outward Foreign Direct Investment (SB). The newest available ODI data is from 2014.
Prior to 2007, the China Commerce Yearbooks (formerly the Almanac of China's Foreign Economic Relations and Trade) reported figures on “China Approved Overseas Investment”, available from 1998 to 2005. However, the definition appears to have changed, and the two series (ODI data and “Approved Overseas Investment” data) are not consistent. Without further information on the definition of the latter category, these two figures are not easily comparable.
However, the official data does not tell us all that much. It has numerous problems (see chinaafricarealstory.org), although many of these problems are also shared by other countries’ official FDI data. On the one hand, Chinese investment is usually overestimated by others (such as FDIntelligence), because their researchers appear to record the initial agreements announced at press conferences, assuming this is an FDI commitment and will actually lead to flows of money. They often don’t. But the numbers are also 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 Canadian firm 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).
3.2 Other Data Collection Efforts
UNCTAD’s Chinese FDI data uses the same FDI flow/stock figures as the CSY and the SBs but is less up to date.
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 state some investments where commitment estimates do not materialize.