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While the deals of Chinese state-owned oil companies such as CNPC, CNOOC, and
SINOPEC in Angola, Equatorial Guinea, Nigeria, and Sudan caught headlines, millions of
U.S. dollars were being invested by Chinese private enterprises in Africa with little fanfare
(Box 1). These investments are not confined to textiles and mining. They cover a variety of
services from agriculture to processing and manufacturing.

Differentiating between the FDI of China’s state-owned and of its private enterprises is
becoming more difficult—and less meaningful. As the Chinese government restructures and
sells shares in state-owned enterprises, the exact shareholder structure of many large Chinese
companies becomes harder to ascertain. These companies have considerable operational
autonomy and increasingly base their investment decisions on profitability considerations.
Moreover, the government has been actively encouraging private firms, small and medium as
well as large, to invest in Africa. The differences between state and private enterprises in
access to state-supported financing have also been progressively reduced. In 2005 China and
the UN Development Program together established the China-Africa Business Council to
promote private Chinese businesses in Cameroon, Ghana, Mozambique, Nigeria, South
Africa, and Tanzania.

IMF Working Paper
African Department
What Drives China’s Growing Role in Africa?
Prepared by Jian-Ye Wang
October 2007

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