Foreign Direct Investment in Natural Resource Industries in Africa ...

cooperation, and specifies how the Chinese government via development aid and soft loans shall
pave the way for future investments in Africa (Kragelund 2010).
Data and Sample
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METHODS
The core sample of our study consists of 5 Chinese (3 state-owned and 2 privately
controlled) and 4 Western extractive mining MNEs operating in Tanzania (see Table 3). We
adopted a contrasting case approach (i.e., see Yin, 1994) to understand the role and nature of
Chinese and Western FDI in Africa, and in so doing to better understand the rapid growth of
Chinese firms in Africa.
We chose to investigate Chinese firms’ investments in Tanzania for several reasons. First,
Tanzania has become one of the most important investment destinations for Chinese MNEs in
Africa after South Africa, Egypt and Nigeria. China’s FDI flows to Tanzania were almost zero in
1999 and have increased significantly since 2000; the annual growth rate was on average 88%
between 1999 and 2005. 3 China’s trade with Tanzania has also increased significantly and
reached about US$ 1.1 billion in 2008; the annual growth rate was 22% between 1999 and 2008,
and in particular, the growth rate was 44% for China’s imports from Tanzania. 4
Second, Tanzania is rich in natural resources, with various types of minerals such as
cobalt, copper, iron, steel, coal, gold, lead, zinc, uranium, nickel, platinum group metals, silver,
3 Calculation was based on data available at the Tanzania Investment Center.
4 Calculation was based on data maintained by the National Bureau of Statistics of China.
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