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Chinese Investments Are Taking the Lead in Africa
By Terry FitzPatrick / Cape Town / 16 November 2007
Business and political leaders are meeting this week in the South African city of Cape Town to seek ways to boost American investment in Africa. But summit delegates have heard that it is often China, and not America, that is taking the lead. For VOA, Terry FitzPatrick reports.
The Chinese are latecomers to Africa, but in recent years they have tripled their African investments to a total of nearly $12 billion. Princeton Lyman of the Council on Foreign Relations says 800 Chinese companies are operating in Africa.
"The most recent activities of China in Africa have been almost breathtaking because they've come with such vigor and energy, and with resources," said Lyman.
Lyman told delegates to the US-Africa Business Summit that China has a competitive edge.
"China is able to package their government programs, their state-owned enterprises, their aid programs, in ways that the United States frankly can't do," said Lyman. "We can't assist an oil company in making a bid by saying if they win we'll build a road. And it's a challenge to those of us who deal differently."
China's need for oil and minerals has driven many investments. But Professor Yang Guang of the Chinese Academy of Social Sciences says a new wave of spending is under way, involving fishing, textiles, tourism, construction and telecommunications. He says Africa's business fundamentals are attractive.
"Africa, in the eye of Chinese business people, is a continent with rich natural resources and relatively high-speed of growth," said Yang. "The number of conflicts in Africa has declined, and the level of opening-up of this continent is much higher than it used to be.
South Africa's minister of trade and industry, Mandisi Mpahlwa, says companies who invest in China have been required to transfer technology and skills. He says China should have to do the same in Africa.
"We have to respond to this challenge of how we enhance productive capacity within the African continent," said Mpahlwa. "China is not going to give us that on a plate. We have to engage China in a manner that we also maximize the benefit and serve our own self interest ourselves."
American investment in Africa has focused on oil and energy. But experts say Chinese investments are more broad-based, which could help Africa's economy to diversify.