Owing to Africa’s vast and growing investment and business opportunities, the continent has become one of the major investment destinations of the Chinese government and entrepreneurs. Although mining and oil remain the major focus of China African investments, it recently began to encompass areas ranging from infrastructure to telecommunication, food processing, port construction and transportation.
This economic Sino-African cooperation is fueled by Africa’s rich abundance of raw materials. Africa is estimated to contain 90% of the entire world supply of platinum and cobalt, half of the world’s gold supply, two-thirds of world manganese and 35% of the world’s uranium. It also accounts for nearly 75% of the world’s coltan, an important mineral used in electronic devices, including cell phones.
Chinese President Xi Jinping while recently speaking to a gathering of African leaders in Beijing pledged $60 billion in financing for projects in Africa in the form of assistance, investment and loans, as China furthers efforts to link the continent’s economic prospects to its own adding that the figure includes $15 billion in grants, interest-free loans and concessional loans, $20 billion in credit lines, $10 billion for “development financing” and $5 billion to buy imports from Africa.
In addition, he said China will encourage companies to invest at least $10 billion in Africa over the next three years.
Perhaps, China’s recurring interest in Africa can be said to be as a result of Africa’s relative underdevelopment to some other continents. African economies provide another worthy choice to take advantage of for excellent growth opportunities. Similarly, according to recent studies, the foreign investment rate of return in Africa is higher than that of any other major developing area in the world.
Irrespective of the reasons behind the Sino-African Cooperation, the level of China’s investment in the continent of Africa is increasing so rapidly that it raises concern, particularly in the west. Principal motivations that birth China’s push toward increased investments in African nations can be said to include the desire to secure a solid base of raw materials to fuel China’s own rapidly growing economy, the desire to increase China’s global political influence and the major growth opportunity presented by emerging market economies.