This website uses cookies to ensure you have the best experience. Learn more

Chinese Nigerian Foreign Direct Investment Relationship Essay

2176 words - 9 pages

Introduction
One of the many byproducts of globalization has been the surge of free trade agreements, bilateral trade agreements, and regional trade agreements signed internationally as markets respond to increased global demand. Despite China and Nigeria signing bilateral trade agreements, it is clear that China has benefitted more from this relationship than has Nigeria, at least in the short-run. If Nigeria is to increase its economic development and decrease corruption amongst the political elite, promote good governance and effective monetary policies, it would be able to use the current influx of Chinese money from oil revenue to develop into a hub for numerous foreign investors venturing into the African market. In this paper we examine whether the association between these two countries should be considered neo-colonial exploitation by a global super power or a mutually beneficial relationship for emerging economies based on vital commodities such as crude oil.
History of the Chinese-Nigerian Relationship
Beginning in the early 1950s and extending into the 1970s, China ventured into the African continent primarily as a promoter of Maoist-Socialist teachings and command economics towards nascent governments. In 1971, China and Nigeria forged diplomatic relations that eventually culminated into permanent bilateral trade agreements and investments. However, it was not until the 1990s that China returned--as a foreign direct investor--intent on investing in projects that would exploit the continent’s wealth of natural resources for exports, its abundant natural resource reserves, and the diplomatic leverage it would gain from forging strategic partnerships. Beginning in the late 1960s and continuing until the late 1990s, Nigeria experienced numerous military coups, a surge in political corruption, multiple ethnically motivated massacres, and an unstable economy that forced the country to turn inward. Such a collapse of government structure and economic stability prevented numerous investors and western nations to refuse to do business with Nigeria’s tyrannical, abusive government. China quickly filled the void vacated by western nations .
In 2001, both countries signed their first trade agreement, which stimulated Chinese business interests in the Nigerian economy, adding up to $1 billion to their $48 billion economy. In 2006, the two nations’ ties became even stronger when foreign ministers from each country met in the Nigerian capital and ratified the first of many memorandums of understanding between Nigeria and China on topics ranging from education, anti-malaria prevention, technology, infrastructure, and most importantly foreign direct investment. The relationship between these two countries hinges primarily on the wealth of Nigeria’s oil reserves, a commodity China wants to secure for their future industrial growth. This natural resource blessing of supposed “black gold” has in reality done very little for the Nigerian...

Find Another Essay On Chinese-Nigerian Foreign Direct Investment Relationship

Foreign Direct Investment (FDI) Essay

1568 words - 7 pages Foreign Direct Investment (FDI) is a venture made by an organization or element situated in one nation, into an organization or substance situated in an alternate nation. Outside immediate ventures vary generously from aberrant speculations, for example, portfolio streams, wherein abroad establishments put resources into values recorded on a country's stock trade. Elements making immediate ventures commonly have a huge level of impact and

Foreign Direct Investment Essay

2787 words - 11 pages Foreign direct investment occurs when a firm invests resources in business activities outside its home country. Many barriers to international trade took the form of high tariffs on imports of manufactured goods. Such tariffs aimed to protect domestic industries from "foreign competition". In addition to reducing trade barriers, many countries have also been progressively removing restrictions on barriers to foreign direct investment (FDI

Foreign Direct Investment (FDI)

1683 words - 7 pages Foreign Direct Investment (FDI)Foreign direct investment (FDI) or foreign investment refers to the net inflows of investment to acquire a lasting management interest(10percent or more of voting stock) in an enterprise operating in an economy other than that of the investor.[1]It is the sum of equity capital,other long-term capital, and short-term capital as shown in the balance of payments.It usually involves participation in management, joint

Direct Foreign Investment

1554 words - 6 pages year the amount of investment from Europe rose by 14 billion (but fell by 1 billion from the Americas). The amount of direct foreign investment has gradually been increasing over the past twenty years up until the year 2000, there was a reduction between the years 2000 and 2001 resultant, most probably from the events of September the 11th which follows the global trend. Out of the top 500 firms that operate in the UK, 313 of them are foreign

Foreign Direct Investment

1523 words - 7 pages Foreign direct investment(FDI) is a financing made by an organization or substance situated in one nation, into an organization or element situated in an alternate nation. Remote immediate ventures contrast significantly from aberrant speculations, for example, portfolio streams, where in abroad organizations put resources into values recorded on a country's stock trade. Substances making immediate ventures normally have a critical level of

Carrefour’s Foreign Direct Investment

2376 words - 10 pages invest internationally: 10 Foreign direct investment: 10 Franchising: 10 Joint venture 11 Manufacture abroad: 11 Conclusion: 12 References: 12   Carrefour- Spot market in foreign exchange: Carrefour is a French based global retailer, which first established its branch in UAE in 1995. It was a joint venture with Majid al Futtaim. The company comprises of both hyper markets and super markets. Beside the challenging economic situation

Foreign Direct Investment in China

1543 words - 6 pages Foreign Direct Investment in China 1.0 Introduction I found this article "Foreign direct investment: Companies rush in with the cash" on the financial times website (www.FT.com) published December 11, 2002 written by John Thornhill. The reason for choosing this article is my personal interest in the Chinese economy and its attractiveness to the foreign investors. Apart from the foreign direct investment this topic has also helped me in

Foreign Direct Investment in Vietnam

2503 words - 10 pages Foreign Direct Investment in Vietnam There is no dout that foreign direct investment (FDI) plays a very significant role in economic growth, according to experiences of new industrial countries in Asia. Over a decade of opening for FDI, we could realize that the more FDI inflows pour into our country the more we benefit. In fact, FDI has contributed a great proportion to fulfill targets on socio-economic development plan and has been one of

Foreign Direct Investment In KOREA

2072 words - 8 pages seemed much easier to control than direct foreign investment. This growth policy of preferring foreign debts to investment continued until the early '80s.After Korea joined the OECD in December 1996, the government exerted itself to continue liberalization up to the level of advanced countries. The Foreign Capital Inducement Act was amended to become the Foreign Direct Investment and Foreign Capital Inducement Act in February 1997, which spelled

Foreign Direct Investment & Regulatory Environment

1209 words - 5 pages Foreign Direct Investment ….. PAGE \* MERGEFORMAT 1 Running head: FOREIGN DIRECT INVESTMENT AND REGULATORY ENVIRONMENTWeek Two ~ Foreign Direct Investment and Regulatory EnvironmentUniversity of PhoenixMGT 448~Global Business StrategiesMarch 16th, 2009Foreign Direct Investment and Regulatory EnvironmentThis paper will compare the foreign direct investment environment and regulations of Aruba, Haiti, and Dominican Republic. The

Direct Foreign Investment Decision Proposal

4829 words - 20 pages Direct Foreign Investment Decision ProposalStar Jeans Company has been weighing the option to enter into foreign territory to do business. There are several factors that have played a part in this decision; one that has taken over 3 weeks to conclude. After careful examination and close analysis, the financial team at Star Jeans Company has devised the optimal financial and investment strategy for entry into Brazil. Team B will present this

Similar Essays

Foreign Direct Investment Essay

1764 words - 7 pages (2010).Whereas Anjum and Nishat find the positive relation of exchange rate with foreign direct investment.. Akthar found the negative impact of the political instability and military rule. Due to the data constraint the political instability consider to be inefficient. He also found that the openness to market is positively related to FDI. The main objective of the paper is to examine the relationship of determinants of foreign direct

Foreign Direct Investment Essay

1114 words - 4 pages Foreign direct investment (FDI) is a direct investment into production or business in a country by an individual or company of another country, either by buying a company in the target country or by expanding operations of an existing business in that country. Foreign direct investment is in contrast to portfolio investment which is a passive investment in the securities of another country such as stocks and bonds.Foreign Direct Investment "as

Foreign Direct Investment (Fdi) Essay

2503 words - 10 pages transfers capital or some other asset to acquire a foreign direct investment, the asset is a type of production factor. Production factors: capital, technology, trademarks, managers, raw material, ....If trade could not occur and production factors could not move internationally, a country would have to either forgo consuming certain goods or produce them differently, which in either case would usually result in decreased worldwide output and

Foreign Direct Investment Essay 1211 Words

1211 words - 5 pages Foreign direct investment (FDI) is becoming a growing global trend undertaken by companies in order to expand their business into multiple countries as well as their domestic base. FDIs have increased across the world over the past 20 years, with outflows of US$241,863m in 1990 to US$2,171,384m in 2007, just before the global financial crisis, an increase of around 837% (OECD, 2014). This essay will look into why certain countries attract more