Analysis On The Influence Factors Of China’s Outward Foreign Direct Investment In Africa

After the2008financial crisis, the road to foreign direct investment recovery is bumpy. However, the developing countries took the lead during this period, they absorbed and generated the most FDI among the world. China has always been actively integrated into the global value chain, she attracts the most FDI among the developing countries, and also becomes the world’s third largest county to generate FDI outflows, which attracting the world’s attention. Africa is the emerging market with a vast market and abundant resources, which becomes the new hot spot of global investment. China and Africa have a long history of contacts in the area of social and economic. In recent years, more and more Chinese enterprises, including large state-owned enterprises and small and medium private enterprises choose to invest in Africa, the way of investment grows diversity, the amount of investment and income is increased, Africa has became an important FDI destination for China. The benefits of China’s investment in Africa are obvious, on the one hand it has brought overseas markets, cheap labor and natural resources to our country, on the other hand it has brought capital, technology, employment opportunities and other resources to African countries, promoting the economic and social development of the host countries, which is a win-win situation.The aim of this paper is to analyze the various influence factors of China’s outward investment in Africa. Through the analysis, the main factors can be summarized as economic and political factors. The time frame for analysis is an11-year period,2003-2013and38African countries are involved in this study, based on data availability. An empirical analysis reveals that China’s outward FDI to Africa responds positively to the host country’s market size, the bilateral trade, natural resources, labor resources and the index of economic freedom. However, the factor of infrastructure is related but not very significant. However, China’s outward FDI to Africa is significantly related to the host country’s political corruption. On the basis of empirical research, we put forward relevant policy recommendations for multinational corporations to invest in Africa.