China’s investment in Africa down 43%
Falling commodity prices and weak global demand hit Chinese spending
China’s outbound direct investment to Africa totalled €1.12 billion in the first half of this year
One casualty of slower growth in China has been the country’s trade with Africa. During the boom years, China frantically courted African nations to gain access to natural resources, and it was the continent’s largest trade partner in 2009, overtaking the United States.
But now a combination of weak demand for global goods, the decline of commodity prices and the Ebola crisis in West Africa have seen China’s outbound direct investment to the continent fall nearly 43 per cent year-on-year to $1.19 billion (€1.12 billion) in the first half of this year.
Shen Danyang, a spokesman for the ministry of commerce, told a briefing in Beijing, sought to put a positive spin on the slowdown, one which chimes very much with the central government’s ideas of “new normal” economic growth.
“Chinese companies are gradually diversifying their investments in Africa, as they transform from aid-providers to mature investors,” said Shen.
China has been criticised by some for giving out loans and funding infrastructure projects across Africa as a way of securing extraction rights and building contracts.
Shen said China was hoping to expand investment in a number of areas including finance, manufacturing and infrastructure with a goal of making an accumulated investment of $100 billion (€93.7 billion) in Africa by 2020.
But its imports from Africa tumbled nearly 43 per cent in the January-June period this year, underlining the impact of China’s weakened demand for energy and resources.