Sustainability Of Chinese Outward Direct Investment In Mozambique

This thesis measures the sustainability of Chinese state and private investments in Mozambique to promote social development and decrease poverty.In attempting to explain the engagement of Chinese state and private ODI in this African country,this study uses the Uppsala model to better understand the motives beyond the shift to African Market.The findings suggest that Chinese private companies are not guided by the Uppsala model in their internationalization process in Mozambique.The remarkable advantage of Chinese private companies when moving to Africa is explained by their strong entrepreneurial spirit and risk taking strategy.The thesis finds that political instability in African countries is not a big concern for Chinese companies.From the Chinese point of view,psychic distance is no longer an issue to worry about,as globalization plays a significant role in market integration.Chinese knowledge and experience pertaining to the African market is achieved by their operations in Africa,allowing Chinese companies to design their own way of internationalization in the African market.Based on interview to 28 Chinese companies and Mozambique government representative departments,we could find that both types of investments differ in their approach.For instance,the agriculture sector receives more investment from Chinese state enterprises than the private investment that goes to African countries like Mozambique guided by the easy money making strategy,with eyes in export and manufacture.The interviewed companies are only reluctant to go to Mozambique by fearing political instability and psychic distance such as culture difference and language.The main constraint for business performance in the continent especially in Mozambique has been the lack of infrastructure,corruption and a lack of skill in human resources.However,in order to minimize these constraints,"Angola model"is seen to play a big role in Mozambique to solve external borrowing and increasing capital in the government working plan.Nevertheless,the thesis found no sustainability in education area as the scholarship students do not receive a follow up in Mozambique after finishing their courses in China.Neither China nor Mozambique benefits in education.On the other hand,the lack of business law network written in Chinese,decreases engagement with other potential sectors like service,construction,communication,mining and energy.