The ink of banknotes is thicker than blood

Chinese businesses in Africa may seem chummy with one another, but don't believe what you think you see

That China-Africa relations are more pronounced in the economic field is hardly in dispute. Official sources indicate volume of trade topped $200 billion last year, and these are just official statistics. Unofficial data that might have slipped through the number crunchers' fingers could well yield even higher volumes of trade. For instance, data from some of the low-end enterprises that operate below the radar may have escaped notice.

However, much of the China-Africa trade and many economic links are driven by Chinese state-owned companies and private companies rather than small-scale players. Looking at the content of mainstream newspapers on the continent indeed confirms the preponderance of Chinese firms over their Western counterparts. When they are not closing deals, they are rolling out marketing campaigns; when they are not handing over infrastructure projects, they are engaging in social corporate responsibility activities.

With a few exceptions, Chinese companies seem to have seen off rivals from other parts of the world in bidding for infrastructure projects. However, another phenomenon has emerged. Chinese firms are engaging in fierce competition, particularly for mega infrastructure projects between themselves.

Naturally, the intense competition for business opportunities has led to disputes between some Chinese companies. That Chinese companies are not resting on their laurels in prospecting for business in Africa is evident in recent court cases in Kenya, Uganda and elsewhere on the continent. A number of court cases in the information communication technology, energy and housing sectors are at various stages of litigation in Kenyan courts and procurement agencies. In other cases, African parliaments have waded into controversies relating to these contractual conflicts.

The mere fact that Chinese executives in Africa have opted for legal action to settle disputes dispels the common misconception that China is one monolithic actor. This emerging phenomenon indicates that Chinese state agencies such as diplomatic missions hardly get involved when companies drag each other to court in pursuit of an independent arbiter on their disagreements. It is also evident that rather than Chinese firms in similar sectors working in consort whenever a big project is on the cards, they often go for the whole cake. You hardly see, say, Huawei and ZTE or China Road and Bridge Company and Chong Qing International Trading Corporation jointly bidding for a project. In fact, the reverse is true.

Perceptive Africans who had thought Chinese companies work in harmony, avoid controversies and generally approach the African market in collective fashion are now aware that the reverse may be the case. But this has become fodder for the wheeler-dealer class of African influence peddlers.

When you probe the business class in a place such as Nairobi or Kampala, you will find African businesspeople keen on playing one Chinese firm against another. This is not helped by the fact that some Chinese firms seem to be gullible enough to swallow tales on how to beat competition in the race for deals.

Then there is the murky area of corruption. For example, Chinese firms often find themselves in a bind when government functionaries subtly or openly solicit kick backs to oil tender awarding processes. Often, the predicament for Chinese firms looking to do business is that such intermediaries have links deep into the relevant arms of government. In other words, if a Chinese firm does not "deal", the lucrative contract could go to a competitor, often another Chinese firm.

While all these cases of competition can be seen in a negative light, there are loads of positives for the Chinese firms and African countries. An obvious benefit is that in the heat of competition for deals, Chinese firms are bound to up the game by delivering quality products and services in order to secure longevity in the market. Nothing is worse for a company than to be dismissed in a tendering process on account of the shoddiness of a past project.

In addition, discussions with Chinese executives indicates that many have come to appreciate the intricacies attendant to doing business in Africa. One such lesson is that a Chinese firm keen on excelling in Africa must have credible Africans either on the board of their African subsidiary companies or have morally upright African workers in the upper echelons of the company.

This enhances partnerships and creates employment. Equally significant is the fact that most Chinese firms worth their name also run social responsibility programs to the direct benefit of communities in which they work.

The writer is a PhD candidate at Communication University of China and a visiting researcher at Witwatersrand University, Johannesburg. He can be reached at bobwekesa@gmail.com. The views do not necessarily reflect those of China Daily.

(China Daily 05/24/2013 page8)