The Myth and Reality of Chinese Investors: A Case Study of Chinese Investment in Zambia's Copper Industry

by Pengtao Li
SAIIA Occasional Paper, No 62, May 2010
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In any attempt to analyse the implications of Chinese foreign direct investment (FDI) for African countries, Zambia is the example par excellence, its historical relationship with China and its ever-increasing economic ties with the emerging power being the main reasons for this. The activities of Chinese mining companies operating in the Zambian Copperbelt have roused much contention, particularly in the Western media, yet there is little understanding of the Chinese perspective on this issue. This paper aims to fill this gap.

It argues that Chinese FDI has the potential to bring about both positive and negative results, depending on the structure and quality of the host economy, as well as the strategies and policies employed by the host government to manage the investment. While Chinese companies often apply poor labour and environmental standards, this is also true of other foreign companies operating in the Copperbelt. Furthermore, evidence suggests that Chinese investors are learning from and adapting to the Zambian context, and are gradually embracing the corporate social responsibility agenda. As a result of this progressive transformation, Chinese companies active in Zambia are beginning to play a more positive role in the country’s overall development.

This paper is based on field work conducted in Zambia from October to December 2009 and was funded by Heinrich Böll Stiftung.

SAIIA sincerely thanks those who acted as peer reviewers for this paper.