Chinese Foreign Direct Investment in Africa’s natural Resources and the Impacts on Local Communities (A Focus on Extractive Industries): Review of Literature

Mulonda Munalula^1, and Kaliba Matildah¹

¹Department of Development Studies, University of Zambia, Lusaka, Zambia

Cite this paper:
Mulonda Munalula and Kaliba Matildah. Chinese Foreign Direct Investment in Africa’s natural Resources and the Impacts on Local Communities (A Focus on Extractive Industries): Review of Literature. World Journal of Social Sciences and Humanities. 2016; 2(3):102-108. doi: 10.12691/wjssh-2-3-3

Abstract

This paper discusses Chinese Foreign Direct Investment (FDI) in Africa’s natural resources and its impacts on local communities. It opens the discussion by highlighting in the preamble how and why Chinese FDI has been skyrocketing especially beginning around the early 2000s with the introduction of the going global policy. The paper then zooms further to give a more nuanced understanding of the nature of Chinese FDI and the main areas of investment in Africa. Information for this write up was collected from secondary sources including published books, articles and seminar papers among others. The paper shows that Chinese FDI has impacted both positively and negatively on local communities in Africa. On the positive front, Chinese FDI has been instrumental in employment creation and infrastructure development. Notwithstanding this, Chinese FDI has been accused of engaging in socially irresponsible investments taunted with abusive employment conditions, environmental pollution etc. The paper remains skeptical on concluding whether Chinese FDI has been harmful or beneficial to the local or host communities because of the limited evidence provided in the paper. Hence, it ends by recommending possible areas for further research on the topic.

Keywords:
Chinese Foreign Direct Investment Africa natural resources extractive industries local communities

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