Chinese Fdi in South Africa

Chinese FDI in South Africa;

Positive or Negative?

Table of Contents
Introduction 4

Economic Situation of South Africa 4

  Quick look at GDP 5

  Monetary policy 6

  Current account balance 9

  Fiscal policy 10

  Electricity crisis 12

  Unemployment rate 12

  Hiv / Aids 13

  Inequality 13

China FDI in South Africa 14

  Infrastructure 15

  China-Africa Development Fund 16

  Agriculture 16

  Cheap Loans 16

Positive Aspect of China’s Foreign Direct Investment in South Africa 17

  Mutual Benefits 17

  Economic Growth 17

  Trade 18

  Job Creation 18

  Technology Diffusion 18

  Wrap-up of positive effects of Chinese FDI in South Africa 19

Negative effects of Chinese FDI in South Africa 19

  Neo colonialism 19

  China supports repressive governments 20

  Technology transfer 20

  Job losses 21

  Wrap up of negative effects of Chinese FDI in South Africa 23

Future outlook of Chinese FDI 23

  Economic Perspective 23

  China expands investment in South Africa 24

  China and South Africa Trade volumes might slightly slump 25

  Chinese and South African relationships 25

Suggestions 26

Conclusion 27


In this research report, we focus on South Africa as an emerging financial market. We will focus on how huge amounts of foreign direct investments of another   emerging financial market, China, affect South Africa economically and socially. We will see that in many ways, it seems like China is exploiting South Africa because of its natural resources while not educating the local people enough. On the other hand, foreign direct investments brings many positive effects with it, mainly in terms of economic growth. All in all, we came to the following research hypothesis

    ← H0: Chinese Foreign Direct Investment will have an overall positive effect on South Africa.
    ← HA: Chinese Foreign Direct Investment will have an overall...