Guest post by: International Monetary Fund Become an Author

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

Related Articles

  Determining if a Business Plan or Regulation D PPM is your best option.
  Thinking Like an Investor
  Who Should You Use to Raise Your Capital?
  National Research Council NRC refocus. More politics than fact?
  Who Should Use a Regulation D Private Placement
  AfriCap Microfinance Fund Attracts Notable Investors Including Nordic MicroCap, BlueOrchard and Gray Ghost, Raises Capital to $50m
  6.3 Financial sector links between investment and diversification: Economic Report on Africa 2007
  IV. A. Private Traders: THE ROLE OF THE PRIVATE SECTOR
  SME's - do you want business from government?
  Meet Private Equity Financing Criteria
  REVIVE AN ECONOMY… THE ANSWER LIES WITH THE PRIVATE SECTOR
  Defining “Hard Money”
  PRIVATE MONEY IS THE WAY TO GO
  Do I Offer Debt or Equity to Raise Capital
  5.2 Structure for implementing the SME Development Policy: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
  A Limited Impact on Private Sector Development
  Ugandan Government Initiative to Subsidise Solar Power Equipment by 45% to be Implemented by Rural Microfinance Institutions (MFIs)
  7.3.4 Labour market reform: Mainstreaming skills development for the poor
  Cashing out, but staying in
  Are You Raising Funds For Your Business Legally?

Related Forum Posts

Re: How to Get Your Business Funded
How to valuate a business
Re: Funding Needed For School
Re: The Storm Brace a new invention
Re: Would you buy a house for a dollar?

Share this article. Fund someone's dream.