Thursday, July 22, 2010

"China not interested in scramble for Africa " - sic !

Chinese moves into Africa have, more to do with the promotion of solidarity with previously colonised countries rather than with a new scramble for Africa or actually attempting to colonise the continent for itself.

This is the view of research analyst for Chinese studies at the University of Stellenbosch, Mathew McDonald.

Speaking at an IHS Global Insight economic outlook conference at the Hilton Hotel in Sandton, he said that China would rather do business with previously colonised countries than with countries that were colonisers.
"China is not one actor in Africa," he adds.

But while Chinese interest could be beneficial for Africa, it is important business and government adopt better practices in doing business with China.

He says the key is to understand "guanxi", or relationships or networks.

In China, he explains, there is an interweaving of personal and business relationships, unlike in the West.

This is why you can expect a call from your Chinese business partner during the new year, or why they do not see it as odd that they have invited a government official to a business meeting, it shows how far their network stretches.

Local business can try and build bridges in this regard by portraying good images to their Chinese counterparts of the business network e.g. via pictures in the building.

Karata Kalley, a regional director at IHS, says while China is expanding rapidly via investments flows of $4-7 billion and this could be mutually rewarding, there are downside risks, like an over-dependency on the Chinese export market.

If Africa becomes too dependent, when China declines, that means Africa declines.

The other concern is an increase in the dumping of cheap goods and warning flags around agricultural deals on a continent that itself does not have adequate food security.

The more controversial risk is a colonial era re-run.
"But the current inflexion point in the world economy could offer a chance to help correct investors' chronic under-valuation of Africa," concludes Kalley.

by I-Net Bridge.