Africa in Chinese eyes
Africa, a land full of wonders, gives a lot of possibility beyond your imagination. “Africa isn’t as scary as people think. Since Africa is so vast that the living environment varies from region to region. Some areas are very comfortable to stay in, neither too cold nor too hot. You may think Africa is very hot as it is in the tropical zone, but the heaviest snow I’ve ever seen in my life is in the mountain areas of Tunisia of North Africa,” said Dawn Zhang, a senior officer from China Road & Bridge Corporation (CRBC), who has visited and stayed in nearly 10 countries in Africa.
CRBC, as the first Chinese companies in Africa since 1979, now conducts business in over 20 countries there, such as Angola, Equatorial Guinea, Kenya, and Rwanda. “We have about 70 to 80 on-going projects in Africa, accounting for two-thirds of the total business volume of the whole company. Doing business with Africa has to take bigger risk and tougher condition compared with other regions; as a result, investment there will receive higher return,”said Zhang.
In Zhang’s memory, in the 1980s, Africa enjoyed higher development levels than China. “My first time to shop in a supermarket was in Burundi in 1982; my first time to pass by an expressway was in C?te d’Ivoire (Ivory Coast called at that time). In these so-called poor countries, you can see more cars on streets than in Beijing at that time.”
Africa’s development mode is highly influenced by western countries. The land is the whites’ paradise in Zhang’s eyes. In the city life of Africa, there is hardly any language barrier; also living habits, consumption patterns and social institutions all follow the western style. “When you turn on the TV, you’ll watch the latest TV programs from France, America and Britain. When you relax in the bars or dancing hall, you’ll hear the most popular hits of western music. It’s very easy for the whites to have a comfortable life in Africa: they are always on the top of the rich class here, easy to have villas to live in with servants and gardeners.”Zhang said.
“I stayed in Ethiopia and Kenya for 2 years, and I’m now still visiting other African countries for business travel. Just in 2 or 3 years, you can really feel the significant changes everyday taking place in Africa,” said Wang Peng, a project manager of China National Machinery& Equipment Import & Export Corporation (CMEC), China’s 3rd largest enterprises in terms of business turnover of foreign contracted projects.
“It seems to me that most developing African countries hold a welcome attitude to the Chinese, only very few of the poorest nations and some southern areas controlled by the Whites are the exception,” said Wang.
Stray Xie, a young girl working for China Development Bank (China’s largest financial partner of Africa) in Beijing has been to Zambia, Kenya and Egypt due to the company’s business connection with Africa. “From my experience, the local government and enterprises welcome Chinese companies warmly. I can feel their anticipation in the friendship and cooperation of China from the heart,” she said.
Yes, it is a land full of change and surprise. But it may also be necessary for Chinese companies to shed some sweat or tears there.
“Africa has many disadvantages as well: unstable politics and society, relatively poor investment environment, low working efficiency, heavy corruption, low experience of personnel... When conducting business in Africa, Chinese enterprises need to highlight the security concerns. As a foreign girl in Africa, I never dare to take a bus alone there,” Xie said. “Irregular and unreliable transportation in Africa is also a problem. Roads are in poor condition, and it is very difficult to find a taxi. Also, in the middle and west Africa, you may also meet problems of poor-timing and low-trust.”
Liu Zhirong, director of WoretaWoldiya Project launched by World Bank, stayed in Africa for years. In his view, African people have a completely different work attitude from Chinese. “They don’t want to work extra hours even though overtime pay is much higher than their regular salaries. They’d rather enjoy the free time as granted by law. What is worse, Chinese companies generally lack local legal understanding, which brings a lot of trouble for themselves.” Liu gave an example, “A Chinese construction company in Africa once was served 150 subpoenas in one day because it fired employees without following legal procedures and the employees all sued.”
Liu’s view on legal awareness was echoed by Wang Peng. “For any Chinese companies or individuals who go to Africa to conduct projects or business, you must pay high attention to the small print in the contract agreements, such as the legal provisions mentioned in the contract(tax, insurance, labor rights, etc.). A lot of study and research in advance is very necessary,” Wang reminded kindly.
China in African eyes
“You Chinese work very hard,”said Mr. Balay, a government official in an Ethiopian city. “That’s the main reason your country develops so fast. People in Ethiopia lack that spirit.”
“African’s general impression of the Chinese people is hard-working. Be it engineering or doing business, Chinese people barely rest on weekends or holidays. We work from 7 am to 6:30 pm, plus frequent overtime at night.”said Liu Zhirong according to his experience in Ethiopia. Hard-working is just a part of Chinese nature.
In most African’s eyes, Chinese products means cheap. Cheap Chinamade products do provide improvement to every-day life of the middle and lower class of the society. “With the label of ‘Made-in-China’, many common African families have improved their lifestyle: wear decent clothes and shining shoes, visit friends on their own vehicles (bicycles, motorbikes, or cars), enjoy many electrical appliances in daily life, and decorate the house by attractive building materials...” said Zhang.
Xie thought the same. “They (Africans) think Chinese products combine cheap price and good quality at the same time. Also the infrastructure projects in Africa invested by Chinese enterprises benefit the livelihood of the local people. They are happy about that.”
“CMEC currently has too many projects in Africa that it is hard to give an exact number. Our over one hundred of our projects have covered 80% of African countries.” Wang said. “Generally speaking, the contract-based projects from China have a good reputation in the local community. But projects in trade only are more demanding, mainly because the after-sales service can not catch up with the growing expansions.”
According to Ministry of Commerce, P.R.C., by the end of 2010, the accomplished turnover of China’s foreign contracting projects in Africa amounted to US$35.83 billion, accounting for 38.9% of the total, 27.5% growth compared with the previous year, involving in fields of mining, financial, manufacturing, construction, agriculture, business and trade, wholesales and retails, etc.
However, the attitude of local government towards cooperation with Chinese enterprises often falls in a dilemma. “They hope Chinese enterprises can boost the local economy, as well as create more job opportunities for the local community. However, they also worry if too many Chinese enterprises march into the market at one time, it would be a threat to the local companies, and risk the market balance.”Zhang said.
“Politically, China is easy to make friends with Africa, particularly when the land was bullied by the Western countries. But, in other cases? Hard to say. Africa has been influenced so much from the West: language, religion, culture, social system, technical principles, even life style. Significant numbers of Africans respect or even encourage the Western society style and the western- ers. This probably dates back to African history itself which China missed the chance to be involved in early developments. It will take a long time for China to win their real respect and trust.”Zhang said.
“Chinese business in Africa still remains in a low level in internationalization. There are many stories of unethical practices and lack of social responsibility among Chinese companies.” Xie said.
Wang added, “It’s important for every Chinese company to build confidence, trust and establish a fair and honorable reputation. Yes, indeed, a few Chinese companies who attempt short cuts have disturbed the normal market stability by not following the rules. For each instance where one company breaks one rule, many companies will have to do a lot of things to pay back the loss and build back up the reputation again.” he said.
In fact, those Chinese who have travelled outside China are more likely to have a more open and international mind. However, their ways of thinking, communication, and behavior style...all these need to adjust to fit for the game rules of the global market. It is still a long way ahead. “In my eyes, it is still difficult for Chinese to blend into the global village; maybe Chinese culture is too unique in itself. We still need time to adjust, to get familiar with acceptable global business practice.” remarked Zhang.
More opportunities in future
The China-Africa Cooperation Forum was established in October 10, 2000. In the past decade, trade and investment between the two sides grew rapidly, which proved that they need each other, and indicated more potential to explore further in future.
According to China’s Ministry of Commerce data, from 2000 to 2009, the trade value between China and Africa has increased from US$10.6 billion to US$91.0 billion. China now is the largest trade partner of Africa. From July 1, 2010, China has reduced 60% tariff for 26 countries in Africa, involving over 4700 items. This will, no doubt, promote, encourage and grow the bilateral trade.
In 2009, China announced to offer a US$10 billion preferential loan to African countries in 3 years. “The financial aid from China will mainly focus on the areas of agriculture, health, education, clean energy and talents training. This is the main focus of people’s livelihood in Africa, also what they need most.” said Gao Yuanyuan, vice director of Department of Aid to Foreign Countries of MoC. “Financial cooperation will be the main highlight in our future work.”
From 2000 to 2009, China’s direct investment in Africa increased from US$210 million annually to US$1.44 billion. Meanwhile, the FDI from Africa to China increased from US$280 million annually to US$1.31 billion. Wei Jianguo, former vice-minister of commerce commented, “Now is the best time for Chinese firms to invest in the continent as Africa needs to upgrade its economic structure.”
It is a land full of opportunities. When Dawn Zhang saw the vast idle land in Africa, he often wondered if the land could be tapped by Chinese, how much wealth would be created from it. Zhang’s dream is now encouraged by Chinese government. “Chinese companies can explore more chances in sectors like agriculture and manufacturing, as well as the current focus on infrastructure and energy resources,” Lu Shaye, director-general of the African affairs department with the Ministry of Foreign Affairs, said at a China-Africa forum in Beijing last May.
According to Zhong Manying, director of the Department of Western Asian and African Affairs of MoC, currently, there are only 30 direct flights between China and Africa every week. “That is quite a small number(considering that the direct flights between China and United Arab Emirates per week exceed 30). Moreover, those flights are mainly run by African airlines. China can explore its chance in this and related areas.” Zhong said.
“Very few large and medium-sized supermarkets in Africa are operated by Chinese. Though Chinese products are very popular in Africa’s market, the distribution and logistics ability is very limited,” Zhong added, “To enhance an all-around service is our target there.”