The Impacts on African Oil & Mineral Trade as a Result of Chinese Foreign Direct Investment in Africa's Extraction Sector

Open Access
Author:
Antonik, Anthony Jacob
Area of Honors:
Economics
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • James R. Tybout, Thesis Supervisor
  • Bee Yan Roberts, Honors Advisor
Keywords:
  • China
  • Africa
  • Foreign Direct Investment
  • Extraction
  • Oil
  • Petroleum
  • Minerals
  • Base Metals
  • Precious Metals
  • Trade
  • Exports
Abstract:
This thesis examines the recent inflow of Chinese foreign direct investment (FDI) into the extraction sector throughout Africa and its impacts on African trade with China and the rest of the world, with a focus on oil and mineral exports. A case study of China’s activities in Algeria, Nigeria, and South Africa forms the basis of this discussion, with a supporting regression analysis of the relationship between the FDI from China and the world, as well as the gross domestic product (GDP) of these three countries and their exports to China and the rest of the world. The results of this analysis show that Chinese FDI has had a positive effect on oil and mineral exports from the three targeted African countries, with a relatively uniform effect on exports to the world and varied effects on exports to China among the three nations. Additionally, the study suggests that Chinese FDI has been more effective than FDI from the rest of the world at increasing extraction exports to China and the world from Algeria, Nigeria, and South Africa.