As China´s hunger for natural resources continues to soar, its interest in Africa intensifies. This has led it to make major investments on the continent, some of them in troubled countries with widespread human rights violations, such as Sudan. It was not long ago (2006), that the Chinese vice-president, on a tour of Africa, made a loaded comment: “We won´t ask questions.”
What effect is large-scale Chinese investment having on Africa? Some observers, such as economist and author Dambisa Moyo or Rwandan president Paul Kagame, defend China´s involvement in Africa on the grounds that only China, with its hugely abundant cash, is providing the large-scale infrastructure investments that African countries need. Many academics worry that as China props up corrupt or failed states, it will aggravate poor governance in a region where it is already a serious problem.
In a recent empirical study of Chinese investments in Africa, I discovered that Chinese FDI was in fact more closely associated than global FDI with corrupt states. It was also more tightly linked than global FDI with countries that had high levels of metal and ore exports.
If this is indeed the situation, should we be worried? Or is this simply a natural and innocuous trend in the FDI flows of a country hungry for resources, in a region where resources are abundant?