Influential but Unwanted: Chinese and US FDI in Africa

Comparative studies of foreign direct investment (FDI) infrequently consider how FDI projects from rival powers are evaluated by local citizens. Research also does not explicitly distinguish the influence from the affinity that accrues to investing countries. Recognizing the importance of both influence and affinity, this study examines how citizens react when firms from major foreign powers – and from their prominent rival – invest locally. Using a dataset of over 750 geolocated Chinese and US FDI projects in 23 African countries and connecting those projects to geolocated survey responses, we demonstrate that citizens assign greater influence to a major power whose firms invest locally and reduce the influence they extend to its rival. Most importantly, however, for both Chinese and US FDI, proximity decreases citizens’ affinity for the respective country’s development approach. The findings suggest that citizens often view investing powers more as heavy-handed intruders than supportive partners.