Determinants of Chinese foreign direct investment in South Africa's energy sector: A BRICS context analysis

This paper investigates the key determinants of Chinese foreign direct investment (FDI) in South Africa’s critical energy sector, a field characterised by substantial investment opportunities and a persistent supply crisis. Employing a mixed-methods approach, the study combines a quantitative panel data analysis of Chinese FDI determinants across BRICS+ countries (2002–2021) with a qualitative examination of major investment cases in South Africa’s coal and renewable energy sectors. The econometric results confirm that Chinese FDI is driven by a complex mix of market-seeking, resource-seeking and efficiency-seeking motives. The case studies reveal a pragmatic “dual strategy” in South Africa, whereby strategic state-led investments in coal power coexist with market-oriented projects in renewable energy, aimed at exporting Chinese technology and services. The paper concludes that this dual strategy represents not a balanced approach to co-development but rather a flexible mechanism for advancing China’s national geoeconomic interests – allowing it to secure resources while simultaneously capturing new markets for its multinational enterprises.