CHINESE investment in Africa fell by more than 40% year-on-year in the first half of 2015, officials said Tuesday, as the Asian giant’s slowing growth dents its commodity demand.
Natural resources from Africa have helped fuel China’s economic boom, and it became the continent’s largest trade partner in 2009.
But growth in the world’s second-largest economy has slowed to its lowest rates since the aftermath of the global financial crisis, reducing commodity prices worldwide.
Beijing’s direct investment in Africa slumped “more than 40%” to about $1.2 billion in the first six months of the year, commerce ministry spokesman Shen Danyang told reporters.
Already, Carlos Lopes, Executive Secretary of the UN Economic Commission for Africa (UNECA), headquartered in the Ethiopian capital Addis Ababa, suggested that the role of China’s investment in Africa tended to be overplayed. (See article).
Speaking to Mail & Guardian Africa on the sidelines of the Africa Media Leaders Forum in Johannesburg, Lopes said noted that Africa’s proportion of total Chinese foreign direct investment (FDI) stock is less than 1% of the country’s total global investment.
India, on the other hand, invested as much as 16% of its outward FDI, valued at $70 billion, in Africa in 2013, he said. What is more, Africa is responsible for 26% of India’s total inward FDI stocks at $65 billion - more than Brazil, China, the Russian Federation and the USA.
China has handed out loans and funded infrastructure across Africa in what critics branded as deals made for mining rights and construction contracts.
Shen blamed the sluggish global economy and international commodity price volatility for the rapid decline.
For the past decade, China gobbled up much of the goods that Africa produces, overtaking the United States to became the continent’s single largest trading partner.
But its imports from Africa tumbled nearly 43% in the January-June period this year, underlining the impact of China’s weakened demand for energy and resources..