Chinese foreign direct investment in Africa: Good news? Yes, but...say Mark Klaver and Michael Trebilcock

China is known for its ambitious foreign investment policy in the countries and regions, which are often not in the radar of Western countries, due to various reasons. One of the reasons rests in the fact that Western countries do not want to get involved with authoritarian regimes often accused of human rights violations and general disrespect for many internationally recognized standards. China does not allow similar concerns to stand in the way of its economic development and the economic presence of its investment in the countries, such as Sudan, might serve as a proof of it. As Mark Klaver and Michael Trebilcock write in their chapter “Chinese Investment in Africa: Strengthening the Balance Sheet” in the book “China´s Influence on Non-Trade Concerns in International Economic Law,” Chinese foreign direct investment on the African continent has grown faster than at any other continent and it might be easily concluded that in the course of the years China has established itself as the primary economic actor on the African continent. Given that Chinese businesses are deeply intertwined with the Chinese government, it might be appropriate to say that the burgeoning investment activity on the African continent forms a deliberate strategy pursued and supported by the Chinese government. The motivation seems self-explanatory given the wealth of natural resources that the African continent offers, which is badly needed by the Chinese industry. The dire conditions in many African countries give China leverage in negotiations and the possibility to negotiate trade agreements with favourable conditions. At the same time, investments in African developing countries enable China also to access other markets and bypass trade barriers, which present often an obstacle to access rich markets of developed countries. Despite the advantages of having economic presence on the African continent, Chinese investment in Africa is not – or does not have to be – a one-way street. Developing countries are in the need to build and improve their infrastructure and accelerate their own economic growth. To be competitive in the global business environment, they need to build their knowledge base and integrate the newest technologies. In the ideal case scenario, the benefits for African countries stemming from Chinese investments would not end only with new roads and building of basic infrastructure, but would include also the technology transfer and capacity building of the indigenous workforce. However, especially the consent with technology transfer might represent a contentious issue for Chinese investors, as it might in certain situations mean that Chinese companies give away its competitive advantage. To be able to enjoy the benefits stemming from Chinese investment, African countries need to evolve into assertive partners. To learn more about the specific questions associated with the Chinese investment on the African continent, the chapter of Mark Klaver and Michael Trebilcock might be worth the read.