China's FDI in Africa: Does It Create Development or Dependency for Africa?

Student thesis: Master thesis (including HD thesis)

  • Han Song
The thesis is designed to figure out the influence of China’s FDI in Africa. As China dramatically expands its investment in Africa, there emerge some voices suspecting China of its motives and defining its presence in Africa as a new scramble for Africa’s energy resources. Questions arise if China’s investment generates economic development or dependency for Africa. The thesis will answer the question based on two theories: dependency theory and soft power theory.
The thesis is made up of six chapters. In the first chapter, the background knowledge is presented, briefly showing the history of Sino-African diplomatic relations and the development of Sino-African trade after the establishment of New China; the problem formulation is also given herein, explaining why the topic of China’s FDI in Africa is chosen. Following the introduction part, the structure of the whole thesis, as well as the methods applied to the thesis, is introduced in the methodology part. Chapter three gives a brief introduction to the basic concepts that run through the thesis---Foreign Direct Investment (FDI) and South-South Cooperation. Chapter four introduces the approaches used in the thesis---development approach and neo-liberal approach, after which the introduction and main interpretations of dependency theory and soft power theory are elaborately given here.
The analysis chapter involves two parts. The first part is written in the light of dependency theory which has four major explanations: development should be seen from a historical perspective; the periphery exports primary goods to and imports manufactured goods form the center, which results in an imbalance in the trade relations; the center benefits the most from the international linkages, and the periphery is not able to follow the development path of the center countries; the domestic elite of the periphery is in an alliance with international capital. The analysis, based on these four explanations, probes into the history of Sino-African relations, China’s quest for energy resources, China and Africa’s motives and China’s Alignment with African elites. This part will give us a clearer picture whether China’s presence in Africa creates dependency for African countries or not.
The second part of the analysis is written in the light soft power theory. With “indirect” and “non-coercive” as one of its defining features, soft power has three elements---culture, political values, and foreign policies---as its promotion tools. The following analysis focuses on how China promotes its trade relationship with Africa through these three elements and what effect they have achieved. As for culture, China has put a huge amount of money into transport, education, and cultural projects, which is an important channel of conducting China’s cultural diplomacy. With regard to political values, the Confucius Institute is introduced as an effort made by Chinese government to disseminate and promote its political values. Besides, China’s growing trade with African countries is a great endorsement of the China Model, which is often seen as an alternative to the neo-liberal Washington Consensus. In the case of foreign policies, China’s emphasis on non-intervention and win-win situation when dealing with African countries is specifically analyzed here.
The last conclusion part summarizes the influence of China’ FDI on African countries in economic, political and social fields, concludes whether China’s FDI in Africa fits with the dependency theory and soft power theory or not, and answers the question if China creates development of dependency for African countries.
SpecialisationChinese Area Studies
Publication date2015
Number of pages46
ID: 212273564