What's China's Investment in Africa? Many African Nations Provide Access to Natural Resources and Little Foreign Competition
Marks, Toya, Black Enterprise
From China's political influence to its dramatic economic growth, many are closely watching the People's Republic. Nov. 5, 2006, marked the end of the Beijing Summit of the Forum on China-Africa Cooperation (FOCAC), where political leaders from African nations and China met to discuss the challenges of globalization and development. The outcome: China plans to continue to increase its investments in Africa to the tune of billions.
China pledged to increase aid to $5 billion, in the form of export credits and preferential loans over the next three years. "With increased aid and trade, Africa will become the next flourishing market," says Dr. Ernest Wilson III of the University of Maryland's Center for International Development and Conflict Management. Trade between Africa and China has already increased from $11 billion to nearly $40 billion in the past five years.
China's demand for natural resources is increasing, while African nations have the potential to supply generous amounts of such resources. This past summer, oil demand in China hit 700 million barrels a day--a number it wasn't projected to reach until between 2010 and 2015. To meet the need, China secured four oil drilling licenses from Nigeria in a deal involving $4 billion in investments and bought a controlling stake in Nigeria's 110,000-barrel-a-day Kaduna oil refinery. …