The Long-term Economic Growth Impact of Chinese Investment in Africa

Abstract

Africa and China have always been a community of destiny, with close ties and similar historical backgrounds. However, investigating whether the Chinese investment benefits the sustainable economic growth for Africa is valid. The gist of this essay is to look at the impacts of the Chinese investment on Africas economic growth. Through analysing the structure of Chinese investment, the constraints to Africas growth, the impacts caused by Chinese investment, and their effectiveness of them. The Solow Model is an exogenous doctorial model that is recognized by the public and also focuses on long-term economic growth. The essay will apply the Solow Model to realistic situations and use it to prove the effects that Chinese investment brought by using derivatives such as capital, investment, labor force, technology, and output. The properties of the Solow Model will also be involved. The research result is that Chinese investment has indeed helped Africas sustainable economic growth and it also fits the properties of the Solow Model. Meanwhile, there are some constraints and lack of effectiveness along with the benefits. So the essay concludes that even though the Chinese investment benefited the long-run economic growth of Africa, the African governments still need to increase their interventions in the market such as introducing policies that can control the dependency on Chinese leadership. And it is also important for Africa to maintain the ability to think independently and have its agendas.