Columbia International Affairs Online: Policy Briefs

CIAO DATE: 05/2013

How the private sector is changing Chinese investment in Africa

Xiaofang Shen

April 2013

Columbia Center on Sustainable Investment

Abstract

In August 2012, US Secretary of the State Hilary Clinton offered a thinly veiled criticism of China’s role in Africa, calling upon African countries to guard against those that “come in, take out natural resources, pay off leaders and leave.”  The Chinese official news agency, Xinhua, retorted immediately that “Clinton’s implication that China has been extracting Africa’s wealth for itself is utterly wide of the truth.”  Data gathered from China, six African countries and company interviews suggest that neither Clinton nor Xinhua was correct. China’s investment in Africa is far from monolithic and is growing increasingly diverse. The driving force behind this evolution is the rising role of China’s private sector. Private investors are primarily driven by profit and they can create real economic opportunities for host countries.