Chinese investment in Africa more than megaprojects: media

The data suggests that Chinese involvement in Africa, particularly private Chinese investment, is yielding significant benefits, said Park Yoon-jung in a Washington Post analysis published on Saturday titled Chinese Investment in Africa Involves More Than Megaprojects, Private Enterprises Also Are Making Their Mark.

Park, the associate director of the China Africa Research Initiative at Johns Hopkins University, said their recent research examined Chinese investments in manufacturing, agro-processing, telecommunication and infrastructure projects in seven African countries, and found clear evidence of job creation, linkages to local suppliers and buyers, local subcontracting and even local copycat activities across sectors ranging from cotton and leather processing to railroad construction and operations and plastic waste recycling.

"In all seven countries, Chinese investments are having a net positive economic impact," Park said.

From 2015 through 2019, the research team including Park who sought to understand the impacts of Chinese investments on structural transformation in Africa found high levels of private Chinese investment.

She said the team found the majority of Chinese firms operating in Africa's manufacturing and agriculture sectors were private, run by Chinese entrepreneurs looking for business opportunities outside of China. "Very few of these firms received any financial incentives from the Chinese government. We found that managers of Chinese businesses we surveyed indicated that they chose to invest in Africa primarily on market considerations," she noted, adding Chinese working in Africa helped attract more Chinese investors from their families, villages and business networks.

"We also found interviews revealed the Chinese government and funders had a very limited role in these operations, beyond overall trade and tariffs agreements," the researcher said.

As per the analysis from the Washington Post, these investments created local job opportunities. "Chinese businesses in Ethiopia provided ample evidence of both job creation and transfer of jobs from Chinese to local employees. In the garment sector, Chinese firms employed 4,395 Ethiopians and 110 expatriates. The leather sector created 11,830 jobs for locals and 440 positions for expatriates. In the plastics sector, Chinese companies created 3,061 local jobs and 150 expatriate positions," Park said, adding researchers found similarly high ratios of local to expatriate jobs in both the textile sector and in cement and gypsum factories.

Chinese firms seem to have learned that companies hired locally were better prepared to weather business challenges, according to Park's analysis.