Frederick's Sphere

More than 50 years have passed since Egypt – as the first African country – established diplomatic relations with China in May 1956. The trade volume has reached about 166.3 billion US dollars[1], while the China-African cooperation has already covered the range from political construction to cultural exchange. When the Tanzania-Zambia-railway (generally known as “TAZARA railway”) was finally opened to traffic after 8 years of construction, few could imagine of the inauguration of the new African Union Conference Center in Addis Ababa on Jan. 28, 2012, whose construction lasted for only about 2 years but cost more than $200 million[2].
When the new AU Conference Center has become the new milestone of Sino-African relationship, the TAZARA railway, however, has fallen into an awkward situation due to heavy burden of overstaffing, inadequate funding and other operating difficulties[3]. Both countries have already expressed their hope in revitalizing the railway as well as in support from Chinese government, while the response from Beijing is not an absolute “yes” any more – the period of “economy serving political considerations” (经济为政治服务) has passed.
Entering into the third stage of rapid development[4], not only the global political and economic environment, but also the interaction between China and African countries has upgraded to a more complicated level, where more strategic opportunities are companied by greater challenges. Reviewing what have been achieved and what have been done wrongly suddenly – but not unexpectedly – became urgently needed for central government and, most importantly, for companies, who have gradually taken over the responsibility from the former and are playing an increasingly essential role in cooperation with African people. As stated on the cover of the special issue of “China Entrepreneur”, if we do not re-examine and adjust our own, we will not be able to achieve more on this continent[5].

Government-led or private-oriented

Unlike domestic market, where the central enterprises enjoy privileges covered a wide range from policy issues to financial support, African continent is a relatively fair arena also for private companies driven out into the global market either by asymmetry competition within China or by their own strategic considerations.
Endowed with stronger but more flexible management capability in competing with global firms, and better designed profit-driven strategic thinking companied by incentive mechanism, private enterprises performed even better than central enterprises in Africa in certain industries or sectors such as telecommunication, textile, cement, building materials, aquaculture and etc. Other industries like minerals or infrastructure, however, are still and will be – in foreseeable future – dominated by the latter due to required enormous financial strength and stronger bargain power with local governments as well as communities. When corresponding domestic markets are not opened to private capital, it is unrealistic to expect a matching performance of private companies in nowadays Africa.
It’s really hard to judge whether central enterprises or private ones have more advantages in doing business. While the former does enjoyed more support from Beijing, the latter profits to certain extent from the absence of connection to Chinese governments and thus less influence from political issues, as more and more surveys show a gradually negative public attitude towards Chinese investment. Despite this, it’s unfair to conclude that a complete withdraw of Chinese government’s presence is desirable considering the volatile political environment and higher national risk in Africa. Even for those foreign private companies such as ExxonMobil and BP, which are often chosen as examples to prove such arguments, it’s unimaginable if there isn’t a US or British government standing behind them – the line between soft and hard power is actually quite blur and an arbitrary separation would not be wise.
It’s not to say, however, that there’s no need for foreign policies of China towards Africa to adjust. Country’s support doesn’t need to be real step-in throughout the whole process of negotiation between Chinese companies and their counterparts in Africa or local authorities. How to keep a balance between demonstrating sufficient support to businessmen, tourists and normal inhabitants, and too much interfering directly into local issues, is what Chinese government should start to consider. Experience can be gathered either from years of doing or learning from successful examples. One thing that the government can and actually has already started to do is indirectly supporting ranged from simplifying bureaucratic administration to increasing financial and, what is more important, information services[6].
Revolution in Egypt and Libya and independence of South Sudan has already indicated the unsustainability of current foreign policies, while the worries after regime change in Chad, though proved unnecessary afterwards – rang a bell to both government and companies: what kind of “China-image” should we present to our “old friends” in Africa?

To be learned or to learn

A generally known statement is that “Africa could be on the brink of an economic takeoff, much like China was 30 years ago, and India 20 years ago”[7]. Notwithstanding the heated discussion (mainly critique) on it, examples of Africa learning from China can be found almost everywhere on this continent. The most well-known example could be the Free Trade Area (FRA) with purposes of promoting international trade and foreign direct investment, such as Export Processing Zones Authority (EPZA) in Nairobi, Kenya. It’s certainly still a highly controversial topic in whether the export- or investment-driven economic development model borrowed from China would also be successful in Africa, while some companies have already detected business opportunities in such areas[8]. Notwithstanding the greater difficulties and risks involved, Chinese Railway Construction Corporation and Xinguang International Group’s trial should be encouraged and supported. Compared to merely appropriating profits from African natural resources and so-called emerging market opportunities, facilitating their economic development and growing with African countries would bring benefits both in economic and political sense[9]. And for the latter approach, helping establish and manage the FTAs is obviously more advanced and with higher return in the long run than merely supporting infrastructure construction.
On the other hand, the traditional sense of always being a teacher has commonly triggered some sort of blind arrogance among Chinese companies in Africa. It’s actually quite a shame to acknowledge the existence of a self-imposed Messiah complex even though we ourselves are still a developing country from the perspective of GDP per capita. If you survey the Chinese company’s directors why they would prefer importing labors from China to recruiting local people, I have no doubt that most of them would respond that “they (African people) are incapable”. Obviously they have totally forgotten the time when we were regarded as “stupid” by foreign investors.
Actually there do exist a lot of things we should learn from. Unlike every action of China being always in the spotlight, India low key presence in Africa is less visible but equally non-ignorable. Endowed with advantages of long residence history, similar or same culture and language, Indian businessmen have entered much deeper into African market[10]. Besides their experiences in dealing with business issues, their willingness and initiatives to unite with each other in order to achieve stronger bargain power and more efficient allocation of resources is what most worth of learning for Chinese entrepreneurs10. The traditional Western competitors could provide additional lessons in more general management sphere such as quality control, recruiting and training local people and intercultural communication as well[11].
We always say that there are no shortcuts in learning, while in entering African market, there are some channels for pursuing support. On the one hand, central government could provide more information and financial assistance in facilitating cooperation among enterprises. On the other hand, overseas Chinese in African can strongly accelerate integration of companies into local communities with their personal contact accumulated within years, not to mention their being more easily accepted by African partners[12].
We should not only learn more, but we should also learn more wisely.

To respect or to be respected

As more and more African governments require foreign companies to recruit certain proportion of local people and the exact number of proportion has been gradually rising, it has been normal or routine to encounter intercultural communication in daily operation.
Recruiting employees from local communities has both advantages and disadvantages. While the former could include lower staff expenses and less integration problem, the latter would be lower productivity and local people’s bad reputations of be less motivated and committed. However, when recruiting local employees started to change from a “would better” to a “must”, Chinese companies have to think thoroughly how they can constrain the negative side while maximizing the positive aspects. On the one hand, it is obvious that we haven’t done well in this disregarding how significantly the business has achieved in the past years[13], while on the other hand, it would be certainly beneficial if we have[14].
Another aspect of intercultural communication is mainly referred to contact with surrounding communities. How you interact with secondary stakeholders has been proved by management experts to be as important as – in some circumstances more influential than – primary ones on your business[15] and this interaction could range from competing with local business people11 to environmental protection[16]. It’s imaginable that a lot of cultural conflicts would arise during the process due to vast differences in religion, life style as well as work habit. Considering the cultural diversity even among a single district, a company’s ability to adapt and to be as much flexible as possible is also put to test. On the one hand, mutual respect and tolerance is always the best approach to solve the problems whenever encountering misunderstandings. On the other hand, companies can – as mentioned above – turn to government agencies or local oversees Chinese for help.
Entering into an unfamiliar environment, using a priori information is the general reaction. In context of Africa, what’s the most common a priori information? Social instability, corruption, bureaucratic inefficiency, less developed living standard … You can actually make an endless list of answers. But past experiences have demonstrated the necessity to prevent any stereotyping before seeing that in person.

The way towards the future

About four days before the inauguration ceremony of AU New Conference Center, an African PhD student studying African Studies in Howard University, Chika Ezeanya, published in her blog an article criticizing AU leaders accepting the “gift” from China, based on arguments such as historical evidence having proved that donation of buildings and structures from one nation to another is filled with doubtful incentives and requires cautions. Accepting Beijing’s donation in building this landmark, in her opinion, demonstrated a backward in pursuing “fairness in the relationship that exists between the continent and the global powers” and some sort of yield to Beijing[17]. Judging the correctness of her arguments is not this article’s main objective, while Chika’s criticism itself revealed the fact that Sino-African relationship has entered into a period of feedbacks or attitudes towards Chinese investment coming from both positive and negative side, and China should learn to get used to and then to properly respond to it.
As the second largest oil consuming and oil importing country in the world[18], China’s enormous need in natural resources is self-evident and obvious no matter how much effort put by Chinese government in concealing the potential incentive of acquiring raw materials from Africa. While it is another debatable question whether it illustrates a new scramble for Africa, what we from now on need to consider is how we can prove the world that our return to African resources will facilitate their development.
The current misunderstandings towards Chinese investment can be attributed to various factors such as dominance of western media in Africa, cultural conflict between Chinese companies and local communities and – last but not the least – our own misbehaviors on that continent. Some of them might not be easily fixed due to their deep-rooted origin and a long-term process it may take. But our own behaviors as well as attitudes are something that totally depends on us and something that might be more influential than mere propaganda. There’s an old Chinese saying called: do not given up good things though they may be minor matters; do not do evil things though they may be insignificant (勿以善小而不为，勿以恶小而为之). One can never imagine the result of accumulated good deeds and how will that impact the future[19].
One of the strongest impressions left for me during my excursion to Kenya is that despite all those existing problems in Kenya such as energy supply and bureaucratic administration, everyone we met and talked to expressed their positive expectation into the future and their strong belief in reaching their goals through hardworking and perseverance. Africa is on her way towards a more prosperous future and it would be an honor for us to help them through direct investment or sharing our experience, which will surely also benefit us.
The way towards the future lies in front of not only African countries but also us. But before we take our first step, we’d better consider very carefully what kind of partners our African friends need and how we can perform our best.