China Blazes a Trail in Africa- Should American Businesses Follow?

Recently, the BNET Intercom asked, with China investing heavily in Africa, should American firms consider looking to the continent for business opportunities? This week, articles in the New York Times and the Economist on the relationship between the Asian giant and the previously much-ignored continent provide further food for thought for managers.

The Times questions whether the rivers of cheap manufactured products and investment funds flowing from China into Africa are good for the continent. With Chinese monetary policy keeping the value of the yuan artificially low, the fledgling African manufacturing sector is finding it hard to compete. On the other hand, the low price of Chinese goods allows Africans to own heretofore unimagined luxuries such as refrigerators and cell phones.

Opinions on whether this works out to a gain or loss for Africa are sharply divided. Wilfred Collins Wonani, leader of the Zambian Chamber of Commerce, goes so far as to say of China's presence: "Sending raw materials out, bringing cheap manufactured goods in. This isn't progress. It is colonialism." Meanwhile, Felix Mutati, Zambia's minister of finance, sees the situation differently. "There is no doubt China has been good for Zambia.... They are bringing investment, world-class technology, jobs, value addition. What more can you ask for?"

Successful Ghanaian businessman, Sam Jonah, interviewed on Economist.com today, seems to see more than a bit of paternalism in such American hand-wringing over China's business dealings, and notes that Africans both know what they want and are capable of protesting if they are not receiving it. The consensus opinion of the two articles seems to be that the history of US and European involvement in the continent is a history of condescension. Whether or not China is exploiting Africa is an open question, but at least they are not condescending to it.

There is now "fierce competition to do business with Africa," according to the Economist, and Jonah reminds us that businesses are coming to Africa "not as charity, but because they saw a win-win opportunity." Though there are very dramatic exceptions in such places as Zimbabwe and Sudan (where China, in a crystal clear ethics violation, has sold arms to the murderous government), Jonah feels that "everyone in Africa is now getting their act together, with free markets and democracy." The mood in Africa, the Economist feels, "is sunny." Managers take note.

(Image of men around a computer by robin.elaine, CC 2.0)