SamuelRSmith said:
http://www.dnaindia.com/money/interview_china-s-investment-led-growth-a-time-bomb_1245641 There are a shit tonne more articles, it's becoming more and more evident that China's massive growth over the past decade has really just been a string of massive bubbles, and they are going to need to collapse. --- As for Africa, while there are a few companies there, namely mining companies, the amount of investment in African countries is minimal. FDI (the amount that foreign companies spend building factories, shops, infrastructure, etc) in last year across the African continent was roughly similar to just that of the UK.... and the UK had a /really/ bad year last year for FDI (it fell by half) - that's over a billion people, versus 60 million in the UK. The problem is... if you were, say, Sony... why would you invest in Africa? Crime rates and war are major problems... no point spending billions on a new factory if it's got a high chance of being vandalised, burgled, or blown up. Once you get past that, you have an extremely-uneducated work force, meaning that you'd have to pay for all the education itself. You also can't rely on the electrical grid, or water supplies... so there's even more money that you'd have to spend, to become more independant. And how are you going to get materials into the factory/finished goods out? The roads are in poor condition, the ports and airports are outdated, under-resources, and severely lacking capacity. And, at every step of the way, you'll probably have to pay off a load of corrupt officials to keep it from happening. The reason why you see mining companies operating in Africa is because the amount of profit they make, exceeds all of those costs I've highlighted above... very few industries offer the same kind of profit margins as oil and mining. The only way Africa can move forward, is if they fix their governance. Fix corruption and reduce bureacracy so that the African entrepeneurs can start building businesses, end trade barriers between African nations to encourage trade, and facililate infrastructure sharing (rather than every country having to build their own world-class airports and ports), and spend money tackling crime and ending militant activity. |
Couldn't of put it better myself.
I mean hell, not only is there way more people in Africa, there is just way more oppurtunity and resources.
Take the risk out of it, and you'd probably see a massive change for the better.
Emerging markets are all the rage now afterall.
