EFFECTS OF CHINESE FOREIGN DIRECT INVESTMENT IN DEVELOPING COUNTRIES

Abstract

As China continues to grow as a global power, its wealth and influence has expanded into developing countries through Foreign Direct Investment (FDI). These investments have been throughout developing countries in primary sectors and infrastructure such as the Belts and Road Initiative, spreading throughout the Middle East and Africa. Because of the question of stability in developing countries, civil conflicts can become volatile for a developing country and can be exacerbated with the presence of foreign investments. With this research, I hope to understand the effects Chinese intervention has on developing countries as it relates to civil conflicts. Because of China’s foreign policy of non-interference, history of avoiding acknowledgement of human rights violations, and noncompliance in international politics, I theorized that Chinese FDI in a developing country raises the probability of armed conflict occurrence and intensity in the target country. To test this, data were collected on foreign direct investments given to developing countries by major powers such as the United States, United Kingdom, France, and China to determine if Chinese investments are more volatile to developing countries compared to its western counterparts.