ROSALES, CARMELA T.

BSBA-HRM 3A
MGT 107 INTERNATIONAL BUSINESS AND TRADE AGREEMENTS
QUIZ #1 CASE ANALYSIS

Executive Summary
Because so much has been published about China’s economic participation in Africa, it’s easy to
get the impression that the Chinese are playing a significant role in the growth of African
economies – for better or worse. While hundreds of thousands of news items have been produced
about this topic since 2000, much of the information in these pieces, as Brautigam (2009) points
out, does not hold up under scrutiny. The scholarly literature on Chinese investment in Africa, on
the other hand, is sparse, particularly in terms of thorough empirical studies. Most of these
pieces, whether popular or academic, depict China’s engagement with Africa as “neo-
imperialism” and “authoritarianism.”

Statement of the problem

Many politicians have criticized China’s rapid growth into Africa, claiming that the benefits are
outweighed and, in some cases, disguised by the negative repercussions. While Beijing has
stressed “win-win” circumstances and building on shared interests, it is clear that there are now
conflicts of interest and severe flaws in the current partnership. These concerns must be publicly
recognized and addressed in order to effectively exploit China’s interest in Africa and avoid
serious confrontations in the future. With China’s development as a key actor in Africa over the
last decade, two important concerns have emerged: the nature of China’s economic relations with
Africa; and the nature of China’s economic relations with Africa.

Point of view
We attempt to give a balanced assessment on what we know about Chinese investment in Africa
and what it means for growth (Brautigam et al. 2017). To comprehend this relationship, we take
a two-pronged approach. We begin by examining the patterns of Chinese participation in Africa
from 1998 to 2015 using official Chinese data. We make a distinction between planned and
realized investments, emphasizing the latter. The available facts are then compared to the picture
provided in the literature to see how Chinese investment could help to African growth and
development.
General Objectives
-Sincerity, friendship and equality.
-Mutual benefit, reciprocity and common prosperity.
-Mutual support and close coordination.
-Learning from each other and seeking common development.

Specific Objectives
-The political field
-The economic field
-Education, science, culture, health and social aspects
-Peace and security

Analysis and Discussion

This study aims to investigate the effects of the China–Africa economic relationship on factor
productivity empirically. For the years 2003–2017, the two-step system Generalized method of
moments (GMM) estimator is used to examine the effects of the Africa–China economic
connection on factor productivity in 44 African countries that influence Africa–China trade,
Chinese FDI, and aid provision to African countries. Concerns about endogeneity are addressed
by the estimating approach. Another unique aspect of this research is the use of a regression
approach to calculate total factor productivity (TFP) using driving capital stock data.
Furthermore, the country’s institutional quality index

Alternative courses of action

In Africa, China has four overriding strategic interests. First and foremost, it seeks access to
natural resources, especially oil and gas. China is expected to purchase more oil worldwide than
the United States by 2020. China is significantly investing in the oil sectors of Sudan, Angola,
and Nigeria in order to ensure future supply. Second, investments in Africa, which is a large
market for Chinese exports, could help China’s ambitions to restructure its economy away from
labor-intensive industries, especially as labor costs rise in China. China also seeks political
legitimacy. The Chinese government believes that improving Sino-African relations will assist
China’s economy grow.
Recommendation
African nations look to China for political recognition and legitimacy, as well as assistance,
investment, infrastructure development, and commerce to help them prosper economically.
Many African leaders hope that China will interact with them in ways that the US and other
Western governments do not — for example, by engaging economically without preaching
condescendingly about good governance, or by investing in high-risk projects or in remote
regions that are not attractive to Western governments or companies. Some Africans want to
emulate China’s rapid economic growth and believe that their countries may profit from China’s
success.