Chinese Foreign Direct Investments in the Zambian mining sector

Abstract

Title: Chinese Foreign Direct Investments in the Zambian Mining Sector Authors: Louise Granath and Marika Larsson Supervisor: Prof. Arne Bigsten Pages: 75 Background and Problem: China’s presence and influence on the African continent is constantly growing and China tries to portray itself as Africa’s true friend. Western media accuses the Chinese engagement and foreign direct investments in recourse rich African countries to be made only in self-interest. At the same time, Western aid and support have failed to create sustainable social and economic development in Africa. Currently, the copper rich country of Zambia is experiencing increasing Chinese foreign direct investments within the mining sector. Aim and Purpose: The aim of the study is to investigate whether the effects of Chinese foreign direct investments in the Zambian mining sector make a positive contribution to social and economic development in Zambia. Method and Data Collection: The study was performed as a minor field study in Zambia during June- August 2012. It consists of one quantitative part where a questionnaire was conducted with 213 mine workers in the Copperbelt, Zambia. There is also a qualitative part consisting of semi-structured in-depth interviews, which were conducted with eight mine workers and ten respondents representing governmental institutions and organisations. Result and Conclusion: The results show statistically and economically significant results that mine workers employed with Chinese employers have a lower wage than mine workers with other foreign employers. The results indicate that most mine workers with Chinese employers are unsatisfied with their working conditions and that the wage is of great importance for whether mine workers are satisfied at work or not. The conclusion is that the Chinese FDIs in the Zambian mining sector contribute to the social and economic development in Zambia. Without the inflow of Chinese capital, minerals might have remained unexplored and the unemployment rate in the Copperbelt would have been significantly higher.