Revealing the Perceived Legal barriers Affecting China-Africa Investment Relationship

Abstract

The investment relationship between China and Africa is significantly growing within the past three decades. The 2013 World Investment Report launched in Tanzania reveals that China is the third partner investing in Africa after United States of America and Japan[1]. This means that African states should be prepared to welcome these blessings by preparing good investment environment to attract Chines foreign investor especially by reviewing their legal regimes regulating investments in order to remove the barriers that might affect the growing China investment in the Continent.

Among of the common legal challenges that are perceived to affect Investment between China and Africa includes ; Security of Investment from expropriation by the host countries , multiplicity of investment laws,  Discrimination between foreign investors and domestic companies , Settlement of disputes between foreign investors and the citizens of the host country, existence of double taxation regimes , Cumbersome procedural requirements in registering companies and obtaining necessary business licences , Strict restrictions in environmental issues , Rights and Obligations of foreign investors to the host country and existence of too much incentives to foreign investors . This paper will address these challenges in detail and examine their implications to the future of China-Africa Investment friendship.

There are several questions to be considered in discussing the above issues, among of the questions are; what are the basic laws governing foreign direct investments in Africa? How are these laws prepared? For what purpose are they prepared? What is the nature of these laws? How far can these laws facilitate the growing development of foreign direct investments between China and Africa? What are the key legal challenges that affect investment growth between China and Africa? What should be done to these laws to promote good investment climate between the two partners? The important thing is to have the laws with balance of interests of investors to gain profit from their capital invested and the host countries desires to realize development from the foreign investors.

[1] The World Investment Report for 2013