China looks to broaden African portfolios

Mahamat Mout Djirabi, a Chadian, walks through the hotel lobby of the New York Forum Africa conference carefully searching for participants to connect with. He stops at a group of Chinese and starts pulling out promotional materials from his suitcase.

Djirabi looks prepared as he talks slowly in English to the Chinese. After briefly introducing himself as an investment promotion director with Chad's Ministry of Trade and Industry, he gets down to business.

"There are three Chinese companies in my country," he says. "We are resource-rich and we welcome more Chinese investors.

"Their projects help us create jobs, we need that. They do things in our country, and they don't take them away later," Djirabi said. "Our cultures are similar to each other in some ways, because they never impose their traditions on us like some Western investors do."

Djirabi was one of several African networkers actively searching for Chinese connections during the forum in Libreville, Gabon last weekend.

He says meeting Chinese investors was the main reason he came to the event - dubbed the largest business conference in the Pan-African area - which gathered more than 1,000 business leaders, politicians, and policy makers from around the world aiming to turn economic opportunities in Africa into realities.

Despite many challenges - one of which is that Chinese investment is perceived as "colonialism" by some Western countries - Chinese businessmen do make a difference when they carry out projects in Africa.

"They go into the African business environment and try to understand the business culture in the African way," says Angelle B. Kwemo, president of A Strategik Group, a US-based consulting firm specializing in business advice about building inroads into Africa and other emerging markets.

Chinese investment in Africa totaled $2.9 billion in 2012 in 50 of the continent's 54 countries with an average annual growth rate of 50 percent compared to 2003. About 2,000 Chinese companies - both state-owned enterprises and private small to medium-sized enterprises - have presence across the continent in various sectors, including infrastructure and manufacturing.

As China's investments in Africa increase, experts say investors should work out a strategy to both expand their investment range and help local communities generate growth among themselves, instead of having them purely receive investment, which doesn't necessarily lead to sustainable growth.

Chinese investors haven't ignored this. In recent years, more Chinese projects are being followed up with vocational training for the Africans who work on them.

Gemsy New Group Co Ltd, a Zhejiang-based sewing machine company, does vocational training at its operation in Algeria, where it also exports its products. Their students receive a certificate at the end of training, which helps them find further work.

But there is more Chinese companies can do to create a sustainable investment and make their presence more positive.

"Chinese companies need to add value inside the continent and I believe Chinese companies can achieve that," says Jean-Louis Ekra, president of African Export-Import Bank. He adds that telecommunication equipment companies should also start building facilities here instead of just bringing in their products.

"It should be adding value and creating jobs locally, otherwise the investment won't be positive," he says.

A new category - manufacturing, energy, agriculture and technology, or MEAT - Ekra says, is also an area that Chinese investors should look into. The Chinese have more than 500 projects on the continent, with infrastructure the most frequent ones. The MEAT category, Erka says, provides more opportunities for Chinese investors to expand their portfolio and have a bigger impact.

"China in reality discovered Africa and created this new wave of optimism," says Ivor Ichikowitz, founder of the South Africa-based Paramount Group, a group of companies operating in the global defence, internal security and peacekeeping industries.

But creating a win-win situation also means figuring out how to get Africans to contribute to China, says Ichikowitz, who is also a philanthropist.

"Africa has always been there and opportunities in Africa have been there," he says, "The only thing that changed is that China woke up to the opportunity in Africa before anybody else did. China had the courage of its convictions to put its money behind this discovery of Africa, and now the whole world is following, and Africa has a lot to be thankful for.

"The next wave of investment needs to be about a win-win partnership - how Africa can contribute to China as well as how China can contribute to Africa - otherwise China is going to be accused of trying to colonize Africa, which we all know is not the case."

yuweizhang@chinadailyusa.com

(China Daily Africa Weekly 06/21/2013 page22)