Why Have Chinese Companies Found the Emerging Markets of Africa Less Risky and a More Attractive Proposition Than Western Multinationals?
Topic n° 2
“Chinese investments and business interests are now to be found all across Africa” (Commission for Africa, 2005). Why have Chinese companies found the emerging markets of Africa less risky and a more attractive proposition than western multinationals?
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For more than five years now, China has been the most important trade partner of Africa (OECD, 2011). Its growing investments in the African continent show the definite long-term interest that the Asian country has in Africa. When comparing the manner and the effectiveness of doing business in Africa of Chinese companies and of western companies, a lot of differences can be found. These divergences can help us better understand why Chinese firms are being more successful in Africa than European and American firms but also why they continue to be so eager to multiply and deepen their business partnerships in Africa. The particularities of the « Chinese way » to do business in Africa that enhance this growing investing trend can be assembled in three general characteristics of the Africa-China relations: the long-term relationship that was built between China and African countries over the years, the efficient model used by Chinese companies to cultivate a good image in the eyes of the African people and the important role played by the Chinese government through diplomatic efforts.
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1. Africa and China, in good terms since 1955.
At the Bandung conference in 1955, China has allied with the newly independent African countries in order to resist agains any form or colonialism or neocolonialism. This first contemporary step reflects the position that China has since been adopting: allying with African countries by showing them that China is « on their side » and helping them fight the western hegemony. By positioning on their side and emphasizing their common interest and similarities in resisting the western world, China has gained a great trust in Africa. This process was greatly catalyzed by the
“Chinese investments and business interests are now to be found all across Africa” (Commission for Africa, 2005). Why have Chinese companies found the emerging markets of Africa less risky and a more attractive proposition than western multinationals?
!
For more than five years now, China has been the most important trade partner of Africa (OECD, 2011). Its growing investments in the African continent show the definite long-term interest that the Asian country has in Africa. When comparing the manner and the effectiveness of doing business in Africa of Chinese companies and of western companies, a lot of differences can be found. These divergences can help us better understand why Chinese firms are being more successful in Africa than European and American firms but also why they continue to be so eager to multiply and deepen their business partnerships in Africa. The particularities of the « Chinese way » to do business in Africa that enhance this growing investing trend can be assembled in three general characteristics of the Africa-China relations: the long-term relationship that was built between China and African countries over the years, the efficient model used by Chinese companies to cultivate a good image in the eyes of the African people and the important role played by the Chinese government through diplomatic efforts.
!
1. Africa and China, in good terms since 1955.
At the Bandung conference in 1955, China has allied with the newly independent African countries in order to resist agains any form or colonialism or neocolonialism. This first contemporary step reflects the position that China has since been adopting: allying with African countries by showing them that China is « on their side » and helping them fight the western hegemony. By positioning on their side and emphasizing their common interest and similarities in resisting the western world, China has gained a great trust in Africa. This process was greatly catalyzed by the
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