Surveys suggest little worry among Africa’s business leaders about Chinese competition

Despite all of the rhetoric coming out of Western media outlets about the ‘colonialist’ aspirations of Chinese investments in Africa, recent surveys suggests business leaders in Kenya, Uganda and Tanzania do not feel threatened by Chinese business coming into their countries.  Of course, these countries are not overflowing with oil where China’s interests in Africa are receiving the most political attention, but the article suggests business people in sectors like agriculture and tourism see the Chinese presence as a chance to mold solid partnerships with the Asian nation that will mutually benefit both countries overall.

Another recent article found online states:(http://www.greenleft.org.au/2007/701/36384)

According to the most recent UN figures, toyal FDI holdings in Africa in 2005 were worth $96 billion, of which European firms accounted for 61%, US firms 20%, Asian firms 8% and South African firms 2%. Of the $29 billion of FDI that went into Africa in 2005, only $1.2 billion (4.1%) came from China.

Flows of Chinese capital into China will always seem threatening to those foreign policy-makers still tossing and turning at night remembering the Cold War and the ongoing fight for influence throughout the world. For the new generation of African business people that are active and thinking on their feet, these capital flows that aren’t necessarily going only into natural resources or that might now have a better chance of trickling down with more sound governance, Chinese dollars are valued the same as U.S. dollars. And as the above UN figures show, these Chinese dollars are still miniscule in comparison with U.S. and European capital stocks and flows. 

`Chinese firms no threat to East Africa`
 
2007-03-03 08:51:00
By Mwondoshah Mfanga

Kenya and Uganda businesspersons say their businesses are least likely to be affected by Chinese presence in Africa and have therefore embraced them in some of their businesses.

According to Tanzania Business Leaders Confidence Index surveys done by Steadman Group and presented by its Managing Director George Waititu yesterday, 20 per cent of businesspersons in the two East African countries showed that Chinese ventures in Africa were of little or no effect on their businesses.

Hu’s Natural Resource Safari

China’s Hu Visits S. Africa After Criticism in Zambia (Update2)
The Chinese leadership has made its way through the continent brokering deals with African leaders willing to take on a new stakeholder in Africa’s economies. Allen Cheng and Karl Maier from www.bloomberg.com write of the recent Sino-African relationship: Also see Dr. George Ayittey’s remarks on China’s increasing involvement in Africa.

By Allen T. Cheng and Karl Maier

Feb. 6 (Bloomberg) — China’s President Hu Jintao arrives in South Africa today near the end of a 12-day, eight-nation tour which has attracted more scrutiny of how China is using its clout on the continent than his previous two visits.

South African President Thabo Mbeki, who last month warned against China developing a colonial relationship with Africa, is scheduled to sign agreements with Hu that will boost fruit and other exports and on mineral and energy cooperation.

A Case of an Import Substitution strategy and its short and long-term consequences in South Africa

As one director mentions in the article, it is hard to assess the total impact at present because importers brought goods in early to beat the quotas (good business).  The article mentions a supply switching that will take place as outlets like Woolworths seek out other countries producing cheap inputs in order to dampen the affect of these new quotas. The irony here is, yes Lesotho, Swaziland and Botswana’s (more likely Bangladesh and Vietnam, two countries that benefitted from past Chinese FDI) workers in garments and textiles may stand to gain some as a result, but

FAW Buses and Trucks to be manufactured in Malawi

 From the Malawi Nation: 

Zimbabwe-based bus and truck building firm AVM Africa (Pvt) Limited will be investing over K100 million this year to open a plant in the country.
Industry, Trade and Private Sector Development Minister Ken Lipenga said in an interview yesterday AVM Africa informed his ministry last December about its plans to invest in the country.
He said AVM Africa—which has been operating in Zimababwe for over 10 years—is currently negotiating with the owners of the former Brown and Clapperton premises at Makata Industrial Area in Blantyre to buy the site and renovate it for the new company’s manufacturing factory.
“They want to start building buses and trucks here and they will invest about K100 million into the business which is expected to take off in the first quarter of this year,” said Lipenga.

Chinese Textile Firm in Zambia having cash flow problems

Zambia, China Textiles firm shut

By Times of Zambia Reporter Over 700 employees put on three months unpaid leave

THE Zambia, China Mulungushi Textiles (ZCMT) has suspended operations and put over 700 employees on three months unpaid leave, a move that has angered workers.
Scores of workers yesterday besieged the office of Central Province Permanent Secretary, Denny Lumbama, requesting him to ask management to pay them their salary arrears to tide them over the period that the company would be closed.