Emerging markets take centre stage for China

China certainly has made mistakes in Africa, but they are quick learners and will continue to improve their operations on the continent, especially in the light of more diversification, says Nitesh Dullabh, who heads up the South African office of The Beijing Axis. “Chinese presence in Africa has mainly had a positive impact according to most experts, but there are challenges that lie ahead,” he told FTW. “Although still a newcomer on the international stage, Chinese players have learned quickly and have the financial capacity to expand. In addition to being a top investor, China is also the foremost contributor to African infrastructure development and is playing a pivotal role in the continent.” This is despite certain Chinese management practices in Africa being controversial and sometimes a source of tension. Chinese construction projects in Africa still import about half of their workforce from China and this inflow of Chinese labour into the continent sometimes leads to tension with local communities, especially since the Chinese generally do not attempt to assimilate into the local community. Chinese enterprises in Africa also regularly pay relatively lower wages, offer poor working conditions and are anti-union, which has led to protests and work stoppages at Chinese construction sites. While cheaper Chinese manufactured goods benefit the African consumer, these threaten local business resulting in the fear that in the long run this will harm local manufacturing capabilities and competitiveness. “Despite all these negatives, China’s GDP growth is set to grow and its urbanisation and per capita income growth is worth watching, which spells opportunity for Africa,” said Dullabh. “The country requires large sustained inflows of natural resources from abroad for its drive toward modernisation. The quest for natural resources and a commitment to sustain economic growth is driving China’s “Go Global” strategy, with the emphasis on China Inc.” Dullabh says while the Chinese overseas investment phenomenon is no longer new, it is set to intensify significantly in the coming years. “China is a viable source of capital, one of the most visible players in Africa,” he said. “The pattern for Chinese investors appears to be one of diversification, with emerging markets (including Africa) taking centre stage.”