The impact of China's foreign direct investment on Africa's inclusive development

Abstract

It has become a consensus among African countries that China's foreign direct investment is one of the most important ways to promote Africa's economic growth and inclusive development. As a result, Chinese enterprises are investing more and more in Africa, which has boosted Africa's economic growth and China-Africa trade cooperation. However, there are many criticisms that China's investment presence is a curse to the inclusive development of Africa. Therefore, our paper aims to determine the impact of CFDI on inclusive development in Africa. By collecting China's FDI data, the panel data of 48 African countries were analyzed from 2003 to 2020, respectively. The finding of CFDI in the continent was suspicious and needed to measure the impact in the host country. According to the empirical analysis results, it can be found that CFDI promotes the African economy through direct investment. Therefore, our results expand the economic growth literature and inform policymakers of the need to pay attention to bilateral, multilateral trade and investment with China, which both parties must control with a solid policy.

Keywords

• CFDI
• Africa
• GDP
• Intermediary effect