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Subject

Outlook for Chinese investment in Africa.

Significance

The slowdown in China's economy has led to a 38% drop in commodity exports from Africa to China in the past year and contributed to a fall in overall investment in the continent. An estimated 16 Chinese-owned mines have closed, raising fears of a wider withdrawal by Chinese business. Yet data indicate that as some investors are exiting, others are diversifying, notably into manufacturing and real estate.

Impacts

Falling Chinese demand for minerals will exacerbate job losses in key exporting states such as Zambia and South Africa.

Construction will see strong Chinese investment in the coming years, in part due to Beijing's numerous infrastructure deals in SSA.

In South Africa, plans to limit the scale of foreign property ownership could hurt investment sentiment.

Beijing may push SSA states to offer non-extractive assets as collateral for future development loans, including land.

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