CALLING ALL CHINESE INVESTORS: SOUTH AFRICAN TELECOMMUNICATIONS AND THE PROMISE OF CHINESE FOREIGN DIRECT INVESTMENT

Abstract

Africa is a potential goldmine for China. China has consequently advanced onto the African continent, drawn to Africa’s high return rate, and its rapidly growing economy and mobile phone market. China’s investment endeavors have been turbulent however, with many African stakeholders contesting the supposed “win-win” relationship that China brings to Africa. Using South Africa as a case study, this thesis explores the extent to which China’s promise of mutual benefits holds true. Through a thorough analysis of primary and secondary sources, this thesis finds that traditional forms of Chinese investment in South Africa are in fact the antithesis of the purported “win-win” relationship, and that they do not live up to their potential to benefit either South African society or Chinese investors. This thesis then argues that the newer industry of telecommunications does, by proving that a mutually beneficial model is both possible and profitable. Through an analysis of this successful telecom case, this thesis adds to existing literature and theory by offering the necessary and sufficient conditions required for a successful “win-win” investment. It argues that the industry must first provide a favorable platform for development, and that Chinese investors must then employ developmentally-favorable policies and strategies. These findings are relevant given China’s rising efforts in Africa, and may have important implications for African countries as they inevitably move towards an information and technology-driven economy.