An Empirical Analysis of the Chinese Move into Africa

CHAPTER 11 An important new issue on the international scene is the upsurge in market and non-market South-South relations. The aim of this paper is to understand the dynamics that lie behind the recent Chinese move into Africa by empirically exploring the determinants of Chinese outward foreign direct investment (OFDI). In order to have a comprehensive picture of Sino-African relationships, the analysis is complemented by an examination of the two other main channels of commercial and political interactions among countries: trade and aid. The empirical analysis utilises a panel of data set, from 1998 to 2005, for 43 African countries. The econometric estimates identify the major determinants of Chinese OFDI and the strong relationships and complementarities among the three channels. Comparisons of the three interpretative models underline that for each of the three channels, the same factors may have a very different relevance and weight.