Analysis Of The Model Of Chinese Investments In Madagascar And Its Implication For African Countries

Using the case study of Madagascar and the embedded case studies of the textile industry and two extractive deals, this thesis shed some light on the 'Chinese way' of doing business in Africa, uncovering the process by which Chinese big extractive firms, textile EPZs and SMEs have settled on the continent and especially in Madagascar as a case study, with network theory as a theoretical framework.It also presaged for the feasibility of an industrialization process a la flying geese model of Africa under the Chinese leadership, looking at Madagascar as a case study in particular. In this extent, the most important part is played by African leaders as they are to assure that the momentum given by China's development does not pass the continent by.This thesis answered the questions of how and why do Chinese investors come to Africa, especially in a non-resource rich country, politically unstable and lacking basic industrial infrastructure like Madagascar.-How does China invest in Madagascar in particular and in Africa in general? Mostly through state-owned enterprises in extractive industry; and when it comes to private multi-national corporations through branches and subsidiaries; same goes for small and medium enterprises. Guanxi-business networks created between administrative officials throughout African countries and overseas Chinese business networks also play a preponderant role as investment medium. A particular aspect for Chinese businessmen in Madagascar is that they become residents of the host country) and are no longer accounted as foreign investors after a while.-Why does China invest in Madagascar in particular and Africa in general? The attractiveness of preferential trade agreements is a principal motive for the case of Madagascar's textile industry, as well as low wages and resources-untapped reserves of minerals and oil-for Africa in general.