Why Is China Investing In Africa?

China has been making consistent foreign investments over the last decade as the consistently growing Chinese economy looks outwards for venues of growth. The African continent has been one of the regions that China has regularly looked at for foreign investments. The investments are spread across a number of countries and across various sectors. The amount of investments that have flown into the African economies has steadily increased over the years to the point where China is slated to be the largest investor in Africa by 2022.

Even though the oil and mining sectors attracted a major chunk of Chinese investments, they are definitely not the only two sectors. China has invested into virtually every sector across the African economy, from food processing to infrastructure. Some of the investments might not even have made sense to most people, but China still made them anyway. These investments abroad serve a number of purposes for China, one of the major ones of which is to acquire the resources that will be needed to continue to fuel its colossal economy.

China is  a major player in the global economy and its performance goes on to have a worldwide impact now. The leaders of the country have effectively recognized the need that will arise for natural resources in the future in order to fuel its giant economy. Besides, Africa is a growing market itself with a huge population. Investments will open up the markets for Chinese goods to flow into them and allow the Chinese economy to continue to grow. The mineral resources that China is investing on in Africa will fuel its economy in the future.

With great economic power comes great diplomatic influence and China is looking to spread its influence across the Indian Ocean and into the African continent and Asia is already under heavy Chinese influence. Being the lender and financial supporter of underdeveloped African economies will allow it a certain degree of influence and a greater power projection on the world stage. Therefore, the investments also serve a political purpose and this is probably why even the investments that don’t make much economic sense are still made.

After all, China is known for its business pragmatism and wouldn’t just waste away money like that. The political landscape in the African economies allows China to work without a lot of restrictions and this allows Chinese firms to save even more costs.