Complementary Development between China and Sub-Sahara Africa: Examining China’s Mining Investment Strategies in Africa

Xiaoliang Wang,Danlin Yu,Chunhua Yuan

doi:10.3390/su132111678

Abstract

China’s recent national and international regional development strategies emphasize both the deepening of the domestic market and the exploration of new markets and resource suppliers to support China’s industrialization. The cooperation with, and investment in, Africa has become an integrated part of China’s international regional development strategy. Investment in Africa is often the result of a decision process that requires balance among local complex political, economic, social, and geological conditions. Proper decision support analysis is the key for success or failure of complementary development. Based on location theories, the current study analyzes China’s mining investment in Africa and derives a set of indicators to form the basis for evaluating China’s investment strategies in the mining industries in Africa. A multi-criteria decision making (MCDM) approach, the VIKOR method, is applied to evaluate six African countries based on this set of indicators. Results suggest that while resource abundance and value are important factors for mining investment decisions, political stability and local legal system restrictions are weightier in the decision-making process. China’s outward foreign direct investment (OFDI) in mining industries in Africa is more inclined to countries with stable political environment, resource endowment and greater value advantage so that both parties can maximize the benefits from such investment.

Highlights

The rapid development of China has attracted scholarly attention from a variety of fields during the past decades [1,2,3,4,5,6,7,8,9]
To apply the analytical hierarchical process (AHP) expert evaluating approach to provide weights for the different indicators, and to solicit experts’ opinions on how to set values for some individual indicators based on the rules listed in Table 2, a survey with pairwise cross-evaluation of the 23 indicators under the 6 groups
By manipulating the pairwise cross-evaluation survey results and the AHP structure, using the YAAHP software [58], we are able to produce the individual weight for each indicator under the goal of selecting the optimal location for outward foreign direct investment (OFDI) in mining industries

Summary

Introduction

The rapid development of China has attracted scholarly attention from a variety of fields during the past decades [1,2,3,4,5,6,7,8,9]. China’s economy has reached the point that global investment has become an integrated part of China’s economic development. The current priorities for China’s economic development are to optimize economic structures, balance regional development inequality, boost economic and technological creativity, and increase the degree of China’s opening-up, in the field of global investment. Globalization has been regarded as an effective way to re-organize production factors (labor and capital), to increase those factors’ productivity through international trade and global investment and to speed up the investing country’s economic development [10,11,12,13].

Objectives

Methods

Results

Conclusion