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+ Chinese Investment in Africa Danielle A. Daley Hermila Yifter + Question I What are the economic affects on African nations in terms of GDP (per) capita due Chinese investment? + Question II Why is China investing in Africa (motives)? + Hypothesis From limited research, we have come to the conclusion that there is a positive correlation between growth in GDP in Africa and increase in Chinese investment + Motives and Factors To seek lower cost for their operations and productions To seek foreign markets To seek resources To seek strategic assets To diversify Type of government + African Countries Sudan Angola Nigeria Ethiopia Zambia South Africa Algeria + GDP Ethiopia Angola 6000 1000 900 5000 800 4000 700 600 3000 Series1 500 2000 Series1 400 300 1000 0 200 100 0 19901992199419961998200020022004200620082010 + GDP Sudan 2500 Zambia 1600 1400 2000 1200 1500 1000 800 Series1 1000 600 400 500 200 0 0 Series1 + Types of Investment http://www.heritage.org/research/projects/china-globalinvestment-tracker-interactive-map + Selection Problem Did China start to invest in these specific countries, because they knew there was potential profit? Did Chinese investment cause the GDP to increase? + Appeal of Chinese Investment “ In contrast to western financial institutions, China employs a no strings attached method of investment in a resourcesfor – infrastructure model.” – Laufman, Adam Chinese Investment in Africa (2005) + Take Away Points Chinese Investment in China does affect African nation’s GDP Compare GDP of Africa and FDI of China Main motives of China in African nations are self – interested in natural resources and strategic assets Our research questions does have mutual causation, but we are focusing does Chinese investment cause growth in GDP