A lot of what I do is time-consuming trend tracking. Right now, I don’t believe there a trend or an influence in Africa greater than that of China.
Every day, well at least the days that I am at the gym, I run next to a Chinese man. After our run, he takes a shower, has coffee, and then opens his shop down the road from my home.
His adaptation to the South African way of life has inspired me to pay a visit to China. What better way to authenticate this article than to visit Shanghai, Shenzhen and Hong Kong?
Visiting China will only result in a one-sided report, and that means in the months to come I will need to visit several African countries for a follow-up article.
I prepare my articles during my own study time, and that involves a great deal of reading, report and article reviews and watching documentaries. I then summarise and prepare highlights relevant to South African business.
As a businessman in Africa wanting to focus on attracting the majority market, I need to accept that most of my potential customers are actually living in a developing nation and really don't want fancy products or services.
All they want is something that works which they can afford - most of the time they don’t care how it is made, the brand name, or how it arrived in the shop.
This is the opportunity China identified and the one we ignored or refused to engage with for some unfathomable reason.
China has taken our market from under our own feet. We can moan about it all we want, it won’t change a thing. Their actions have not been unethical in the context of business practices, and their approach has been from ground root levels by first establishing a supply base. Which is probably how they managed to avoid our early detection. Their macro-strategic intervention approach has allowed them to win over the power elites by controlling the trade foundations. This was strategic!
When I lose a game of Chess, I get upset, but at the same time, I also appreciate and respect the skills of my opponent.
China has been accused of neo-colonialism, and opinionated pro-China supporters simply wash these accusations off as a Western conspiracy.
One could say China’s expansion has been a well-run first phase military operation. Their tools to arms are not army tanks or warships, but rather companies, like the Huawei corporation, which has coincidentally been referenced as a Chinese firm with close ties to Beijing's military.
China in the past used its natural resources as surety to pay for infrastructure when it embarked on its reform four decades ago. The result was that their middle class exploded and in just one generation 300 million farmers improved their skills and moved into urban industrial and technology jobs.
China has brought the lessons of their own success to Africa.
A lot of the negative opinions shared in Africa comes down to the fact that Africans feel they are being “farmed” or ‘herded’ when we should be the “farmers”
I can understand this gripe, but honestly, we are to blame for our own lack of action. I have zero tolerance for those who use the challenges of our nations as reasons for failures to act.
People conveniently forget that China made progress in our own markets in spite of all these problems. They also had to deal with corruption, safety issues, and to make it harder for them, there was the language and cultural barrier. One report I read that included a survey said 60% to 87% of Chinese companies had to pay a ‘tip’ or ‘bribe’ to obtain a license for trade in Africa.
China played the cards dealt to them, and they have laid two generations of "seeds" on our continent. I believe it is reasonable to assume they have no intentions of ever going back. This means I must embrace the Chinese trend into my own business model in order to do well in the years to come.
China has 1.4 billion people. Take a moment to comprehend exactly how many people that actually is.
Their nation has adopted a much longer-term approach which better integrates business and political objectives for the betterment of their way of life and their own longevity.
In a way, it’s like the Borg from Star Trek with their assimilation of other races.
Construction, energy, mining, and telecommunications are the four strategic areas of focus. The order of business is very much championed by the Chinese Communist Party (CCP) and includes the acquisition of foreign technology and breaking into new markets.
Pertinent Trends in China.
Did you know that China has produced more scientists for decades than any other country? I hadn’t, but once I read it in the report, it did support my belief that the youth of China and their brand of entrepreneurs are by every definition of future thinkers. They are in touch with trends, responsive to challenges, not bogged down by old school red tape and less interested in localised political matters. Most importantly they are real-time innovators and residents of the future world.
Future Thinkers both create and maintain momentum for positive social and economic change. With that said, I am aware of all the copycat concepts and solutions they and many of the larger Chinese corporations have produced.
I believe if you can add the same value for less, you will end up with the client. I support markets where clients have 100% choice.
Social Media vs China.
The Cyberspace Administration of China (CAC) issued harsh regulations, citing it is for the betterment and protection of Chinese webitizen’s (a word I made up), online organizations and with the intent to safeguard national security.
The same policies are the very reason I was blocked from Facebook and Whatsapp while in China.
Limiting access to web services, communication and freedom of speech is not in the best interest of the general public. It also seriously interferes with business.
The use of Major Virtual Private Network (VPN) in China is a No No.
There was a report denied by China's Ministry of Industry and Information Technology, that the three major Chinese telecom providers received a demand to halt the use of VPNs on their networks.
Authorities have strict rules on ISPs, and if caught, offenders can be fined up to 15000 Chinese Yuan, about R32 000.
China's Bitcoin Crackdown.
Not too long ago, the People's Bank of China (PBOC) issued a statement saying it would stop trade around cryptocurrency.
There are conflicting reports on Chinas official stance on this type of trade, but I believe it is safe to say while cryptocurrency is not illegal yet, there is enough evidence to suggest China will soon either ban or demand control of cryptocurrency in some way or another. This is not hard to believe because BTC China (Chinas second-largest cryptocurrency provider), announced that it would cease trading.
OKCoin and Huobi, some of China's largest exchanges have echoed similar action.
Many believe China is between a rock and a hard place with this issue because on one hand, cryptocurrency is a wonderful innovation, but it’s also very hard to manage.
This is an interesting trend in China which I wanted to mention.
Most people have heard of ride sharing with services like Uber, well China's taken this to the next level with sharing services offering umbrellas, phone batteries, beds and even sex dolls. Ewww.
Robots began their duties in 2017 in southern China as drivers. Shenzhen’s Futian Free Trade Zone saw the first of four Alphaba self-driving buses.
Soon, you can have a robot driver take you to one of the automated 24-hour convenience stores.
You can expect teething problems with these robots, for example, the cars are limited to around 30km per hour and the BingoBox unmanned store was closed due to technical overheating one month into operations.
I think most Chinese people’s interest peaked on the subject of AI since AlphaGo, (AI gaming program) defeated Shishi Li in 2016.
Since then, corporates and individuals alike have really jumped onto this trend. Take for example LingoChamp. This is an English language learning app that evaluates spoken English and has 50 million users in China alone.
Then there is Baidu, Alibaba and Tencent, with their collective nickname called BAT. BAT has increased their spend on AI development substantially. BAT Spend … sounds like a phrase Bruce Wayne would come up with if Batman had a bank.
Alibaba pledged an investment of $100 billion in AI-related projects for the next five years through its Damo Academy.
Tencent, whose head office I have visited while writing this article, has come up with the phrase of AI IN All. They appear to be focusing first on AI in hotels and healthcare equipment.
Really Cheap Labour.
Due to the abundance of cheap labour, Chinese companies can offer services and products at a fraction of the cost compared to their Western competitors. This does not only apply to entry-level positions. For example, China has an annual turnout of two million engineering graduates, in comparison to France which only has 300 000. In comparison, the average annual salaries of engineers in China only amount to US$19 000 per year as opposed to roughly US$110 000 in France.
This means China’s skilled labour is very affordable and creates a demand for their people in international markets which you can imagine threatens job opportunities for local skilled labour.
Change in retail.
China is leading the New Retail Trend which really is all about Tech being integrated to enhance or make the shopping experience more enjoyable.
Ever hear of Jack Ma?
It is one of the largest non-government retailers in China which has joined the new retail market separately in the form of Smart Retail.
Implemented correctly, the use of Tech in retail substantially improves supply chain efficiency, reduces the need for lots of inventory which saves storage space, and improves the user experience. In some cases, it also means less staff are required, which reduces company overheads and even risks. The end result is increased sales and, of course, return business from happy clients.
All retail stores need to embrace this trend or get ready to close their company.
The checkout till at my hotel reception desk in Shanghai uses facial recognition in conjunction with smart access cards to authenticate my presence. It is also used for predicting food orders at fast food shops or dispensing limited amounts of toilet paper in public places because of toilet paper robbers. Something I learnt in China is that toilet paper is not available everywhere… so I understand why there would be cases of toilet paper theft.
Huawei Technologies, ZTE communications, Alcatel Shanghai Bell (ASB) and China Mobile make up the group which has the monopoly of telecommunication services in Asia and even some places in Africa.
I personally have no idea how anyone else can compete with this group in the Telecommunications arena.
Then there is the report by the Financial Times which said Beijing intends to group Hong Kong and Macau with the nearby areas such as Shenzhen and Guangzhou. The area is referred to as the ‘Greater Bay Area’ and its joint efforts will be a region with nearly 70 million people (greater than our South African population) with a GDP of $1.5 trillion!
This means the Greater Bay Area, which technically is not that large, will be worth more than any GDP of any major country in Africa.
Incredible wealth and monopoly are popular motifs in China. Another example: Guangdong (the mainland China part) exports over $670 billion in goods annually and also has three of the world’s ten busiest container ports.
All African countries added together have a population of 1.3 billion. That is less people than China.
I have not had a child yet, but I imagine the feeling I get when I do research on our accomplishments is similar to that of a parent at their child’s graduation.
Of course, Africa is no child and considered by most paleoanthropologists to be the oldest inhabited territory on Earth. It is a relief that I can report that Africa is in fact ahead of its international rivals in many ways. I think the reason for this is that we have so many needs, that we have embraced several Techs before others and in some ways bypassed red tape. For example, Rwanda welcomes drones where parts of Europe and the USA red tape them with their legislation.
The result is we get to deliver medicine by air! How can that not make you proud?
How about the app NappiDaddi? This app motivates fathers to face the numerous challenges of childcare. It is ironic that an app for an adult uses game-like elements and makes me wonder who the actual child is.
There are also countless services provider solutions in Africa, like Kenya’s solar-powered BRCK Wi-Fi device which serves the purpose of solving internet connectivity dead spots. Wonderful stuff!
Spin-off Effects of Tech.
The effects of Tech on people’s lives in Africa has been far greater than anywhere else in the world.
In Kenya, M-Pesa’s mobile money product resulted in a technological leap for payments solutions, making trade possible for hundreds of thousands of people in just a few months after its launch.
Because of Tech, Nigeria is becoming a centre for big Tech investment and Tech related start-ups. All three of our continent’s most recognized e-commerce startups (Jumia, Konga and MallforAfrica) were founded by Nigerians.
Social media applications such as Twitter and Facebook are used by organizations and even political parties in Africa. Does anyone remember Zuma’s first post?
One of the facts I am most proud of is that South Africa still has some of the best internet freedom.
The negative trend of decreasing foreign direct investment in Africa is something we should not ignore. It dropped by nearly 21% in 2017. It is interesting to note that the same report I got this information from said that this drop was in part because of the reduction in Chinese investment on the continent.
Not only are our funds being reduced, but our countries appear to be the battlefield for the USA and China war. In 2016, the USA had $57 billion of foreign direct investment stock in Africa, and China had $40 billion.
China overtook the USA as Africa’s biggest trade partner almost a decade ago so I can understand why the USA is not a happy chappie at the moment and also why one report stated that they could punitively put a 25% tariff on the $505 billion worth of goods imported by China. The same report also said that China might retaliate with a 50% tariff hike on the USA.
While I don’t fully understand the extended technical implications of their tit for tat spat, I have trained myself to focus on principal facts rather than evolving situations, because it is a better predictor when it comes to working out scenarios, and in this case the facts are that the USA is less reliant on Africa than China. They have more international trade deals, making them more resilient, and it gives them the edge over China who has more eggs in one basket. China in this battle would be the greater loser regardless of what they.
A more important point to make and one that is often neglected to be mentioned by so many is that India is sneaking up on their market. Currently, India is projected to become the fifth-largest economy in the world. India is a direct threat to the USA and China’s Telecoms ambitions. For example, Naspers is looking to India to invest some of the $10bn it received from its recent sale of shares in Chinese internet group Tencent.
Technology Market Share in Africa
Tech is already big money. Give it another 10 years it will dwarf entire nation’s GDPs.
Africans have a responsibility to understand how Tech will affect our people.
Each year in Africa, the Tech market grows at growth rates double of the average local GDPs.
I have included a little chart I found with unofficial estimates obtained from industry sources showing how market share is growing, and the date units are in $ billions.
In short, about 65 billion Rand of Tech trade can be enjoyed in 2019 for South Africa.
On our continent, South Africa dominates mobile software, security and electronic banking services. This attracts all sorts of corporate interest, to give some examples: IBM, Unisys, Microsoft, Intel, Systems Application Protocol (SAP), Dell, Novell and Compaq all have a base in our country.
We have the IBM Cloud Data Centre in Johannesburg.
We have a close collaboration with South African, 100% black-owned firm Gijima and Vodacom designed to support cloud solutions.
There is also CISCO and Dell, both with training academies.
South Africa is also rocking socks when it comes to smart city technology. Johannesburg, Cape Town, and Durban have started on several pilot projects.
Africa needs to refresh its education content to include future thinking. Improve its systems at schools and even the approach in engaging with Learners. This needs to happen for students and the current workforce who also need re-education.
It is hard to get it, and when we can, it costs too much. Data in South Africa on average is eight times more expensive per data bundle than in other African countries.
There is an increased trend on attacks for financial and utility providers, as well as an interesting increase on attacks of political parties.
We have an unhealthy need for International Aid, and the inability to implement a strategy designed for long term objectives with the best interest of the greater population at heart.
We need wolves and not sheep. We don’t stop situations which enable the benefiting of a select few and have become extremely complacent in our practices.
China in Africa.
If we are to believe reports, China’s value in Africa is estimated to grow to between $250 billion and $440 billion by the year 2025. Currently, the value is around the $180 billion mark. China’s value will be heavily affected and in a way even determined by how Africa manages its involvement in projects from this point onward. If Africa decides to do more, China’s piece of the pie won’t be so big.
The Game of Chess.
Chess is a game of strategy. The first task is to position your players. There are an estimated one million Chinese people living in Africa and McKinsey estimates that there are over 10 000 Chinese-owned businesses. There is estimated to be over 10 000 Chinese corporates in Africa.
As each year passes the Chinese are becoming more experienced in service delivery across Africa, after all, they have been playing this game with us for no less than 2 decades. This means that the historical advantage locals had is slipping away.
Chinese firms link up with global operators to piggyback their services and use them as launch pads, smoothing out the path to their objectives, which really is to penetrate as much of the market as possible. They do this by ensuring Chinese link-ups with other Chinese companies to compete against foreign business in Africa, which obviously means they avoid joint ventures with non-Chinese companies.
The Chinese have focused on coastal countries, especially those with shipping lanes.
Some believe, me being one of them, this is a strategic decision, and others even call this creating ‘choke-points’, a known military practice on sea lanes.
Their secondary focus is on gateway countries with an abundance of energy access or raw materials. Kenya is a perfect example when you consider its location in East Africa.
Sudan is a good example of a country the Chinese love, and it has oil. China is provided with almost 9% of its total oil trade. It is an interesting observation that many of the telecom deals managed by the Chinese in Africa are with oil-producing countries.
In Chess, the second task is to, wherever possible, wipe out competition or threats. The Chinese have certainly done this by lowering prices on popular products and services by as much as 40%. This saving does not only apply to day to day goods. African government officials have often preferred Chinese firms for large construction projects because of their better prices and efficient processes.
There are obvious levels of engagement when it comes to Africa and China. One research article had some nice references for categories, the first one called Robust Partners like Ethiopia and South Africa who have a clear strategic position with China, supported by high levels of economic engagement.
You then step down a level to Solid Partners like Kenya, Nigeria and Tanzania who do not have the same engagement levels with China but more an eagerness to engage.
Lastly, you get unbalanced partners like Angola and Zambia, with levels of participation that have been low.
The fact is no one else has wanted to invest in Africa for some time now, so what choice did Africa have but to accept the only offer on the table?
The Chinese don’t always take a country’s income into account when deciding on a loan. China looks at the viability of the project and the likeliness of a return. Clearly, they were happy with their prospectives because Africa received funds of $95.5bn between 2000 and 2015, mostly on infrastructure projects.
Unfortunately, Africa does not appear to be able to pay off its loans.
China now holds 72% of Kenya’s bilateral debt.
Beijing owns approximately half of Angola’s external debt.
Djibouti is another example, with IMF figures showing that its public external debt increased from 50% to 85% of GDP in two years.
Kenya’s bilateral debt increased ten-fold since the year 2013, and over 70% of that is related to China. Kenya is the third most indebted country in Africa to China.
Countries worse off than Kenya are Angola and Ethiopia who owe China Sh4.28 trillion and Sh1.37 trillion.
Since 2017, China can account for about 15% of sub-Saharan Africa's total foreign debt, and around 20% of all African Government external debt,
If there was an equivalent to Check Mate in the game for Africa and China, the move would be called “Debt”.
China is set to train our people to become scientists as part of its $60 billion development plan. Training is a focal point for China and they are offering 50 000 scholarships for Africans to travel and study in China. We also have the option to stay here for our training; after all, China has local projects as well like the expansion of the University of Health and Allied Sciences in Ghana.
Reports related to education was deeply divided in their opinions. With that said, most students I have met have something to complain about their university regardless of if the opinions have merit or not.
The educational projects don’t stop with mainstream education, there are reports about ‘training’ for government. China’s own cyber laws can be seen in policy in countries including Uganda and Tanzania. The CCP invites political party leaders from the developing world to Beijing to learn about China's new type of political party system.
Chinese officials, state media, and academics have helped push the strategy abroad. This sort of teaching appears to be lapped up and there are reports of many African leaders using China's example of governance, which in simplicity is government without democracy. Scary stuff. South Africa's own ANC, Angola's MPLA, Namibia's Swapo, Tanzania's Chama Cha Mapinduzi (CCM) (Party of the Revolution) and the Ethiopian People's Revolutionary Democratic Front (EPRDF) have all attended Beijing’s training. The CCP is also helping to fund and even establish political schools.
Chinas Belt and Road Project
This initiative has three variations in names: the One Belt One Road initiative, or the Silk Road Economic Belt or the 21st-century Maritime Silk Road.
It does not matter which name you decided to use, it is a development strategy for investing in infrastructure in Europe, Asia and Africa with its related policy intended to advance China’s national interests.
I was nervous to write this section of the article while actually in China. There was a lady (a music teacher from the UK in China) at the airport that I got to chatting with, and she said Big Brother is always watching, and that she had been disconnected from communications a few times after saying not such pleasant things about China.
China has consistently been ranked as the world’s worst internet freedom abuser by digital advocates. There is also evidence of China ‘exporting’ their policies under the banner of their “digital Silk Road” initiative.
Some of the articles mention Web expert’s warnings against their systems being used for intelligence surveillance.
I picked up a magazine at Johannesburg airport early February called ChinaAfrica, not AfricaChina. The magazine is part of a China-based publishing house.
By the time I closed the feature I had an overwhelming feeling that I had subjected myself to new world printed propaganda. Most of the articles included a lot of self-congratulations for China.
Another subject I picked up on was reference to China’s non-interference policy, which makes me giggle while writing this article because I have had to install a VPN to try and use WhatsApp and do my Facebook marketing while in China.
There were some interesting nuggets of information, like reference to China having its own internet court and an AI themed park. Perhaps not that relevant to Tech trends, but also an interesting nugget shared was that China is using a lot of African football players in their soccer leagues.
The number of mobile phone subscribers in Africa hit 280 million back in 2008, which is a huge leap when compared to 76 million users in 2004, and this number will balloon to one billion or more by the year 2023.
The top African telecom markets for Chinese companies are in Algeria, Egypt, Tunisia, Morocco and South Africa. Collectively they equate to 60% of China’s total telecom assets on our continent.
The observable trend is that Chinese companies establish themselves as key suppliers for networks in the early development stages of each market, then position themselves to win subsequent network upgrades, all the while showcasing their own technologies for customers needing cell phones. In all, they offer a full house solution.
Huawei Technologies, ZTE and ASB keep their prices extremely low, and also tailor-make solutions for our market. China has a great advantage to the USA and other European providers because they allow for ‘white label’ phones, and this enables our local operators to brand them and also choose their own vendors for components.
China’s increased involvement in the African telecommunications industry is part of its broader strategy to enhance its global standing, and it is working.
Money Coming In
Africa needs between $130 to $170 billion worth of new infrastructure annually, so says the African Development Bank.
China supported this with an estimated $94.4 billion dollars in loans to finance more than 3 000 infrastructure projects across Africa between 2000 and 2015.
This is not small change and frankly, most Africans must have been shocked with this support, after all, securing investment has for a very long time been a major struggle due to our continent’s really awful reputation with fund management.
Of course, it’s not a one-sided deal. China always gets something out. For example in 2017, Ghana agreed to a R150 million exploration deal, or Nigeria signing a deal to build an oil refinery in Edo State at a cost of R30.1 billion, with China having a huge stake in the project.
Shanghai-listed developer China Fortune Land Development is set to invest up to R301.1 billion to build an upmarket residential district, an industrial zone with schools, a university and even a recreational centre in a new city in Egypt.
A report said that when funds come from China, money is often funnelled through lending channels, via preferential loans from the China Ex-Im Bank, and then through the China Development Bank. What I can also pick up on is a lot of the funds arrive in Africa and go directly into a firm with invested interest with China itself.
We must remember that in general Chinese ownership in projects is roughly 90%. Loan contracts generally also require that a high percentage of materials are imported from China.
The Forum on China Africa Cooperation (FOCAC) hosts an event where leaders from around the world meet every three years to hear how China intends to distribute its international investment funds. You can imagine the good spirits at this event.
Since the first FOCAC in 2000, China has put in around $200 billion. President of China, Xi Jinping, also pledged US$50 billion of funds for infrastructure projects covering but not limited to medical programmes and clean-energy initiatives.
A further $10 billion was also put forward from Chinese companies. Alibaba who are collaborating with UNCTAD on the eFounders programme to train over 100 African entrepreneurs in the next couple of years, made an announcement of a fund for $10 million.
All this money being offered, begs the question: how does it get shared out? One article I read gave some nice points, let me share some of these with you now:
Angola is the top recipient of Chinese loans, with $42.2 billion disbursed over 17 years.
Kenya accounts for $9.83 billion in loans from China over the last 17 years.
Nigeria checks out with $4.83 billion, also over the last 17 years.
Finally, Djibouti gets the smaller share, of $1.47 billion.
I also found a nice infographic:
Money Leaving Africa
Would there be accurate reports on this?
I doubt it.
That does not mean we cannot work out reasonable estimates, for example, in manufacturing I read that Chinese firms annually put $500 billion into industrial production. That is one sector alone!
It is reasonable to assume China is getting out more than they are putting in, after all, China is a business machine.
You can safely add a conservative 50% mark-up to any investment fee to work out a reasonable estimate on what is leaving Africa.
Collectively across all industries, it will be in the high billions, if not low trillions.
Infrastructure and Care of It.
There are countless assets under the ‘care’ of China in Africa. To give a few examples let’s start with harbours.
With China Merchants and COSCO Shipping companies running 29 ports in 15 countries, and with a total of 47 terminals in 13 countries, it is safe to say that China has a global shipping empire.
Acquiring these assets appears to be a type of bartering system when you consider that Sri Lanka simply handed over a port to companies owned by the Chinese government as a trade-off for their $1 billion in debt to China.
Then we have the Bagamoyo special economic zone, EPZA in Tanzania. This project is spearheaded by China Merchants Holdings International. If this project goes ahead, which I am very certain it will because many of the local villagers and residents have already accepted compensation for the loss of land, the area will be converted into the largest port in Africa. China will have a big invested interest in this of course.
This area will be far more than a harbour, it will have accommodation apartments for around 75 000 people and there was also reference to the intent to build an international airport. I am sure the area will have schools, shops and perhaps a Shopping Mall and a hospital.
Kenya, Ethiopia, Angola, Djibouti, and Nigeria have all had their railway systems funded by China. Kenya’s 290-mile railway from the capital in Nairobi to the port city of Mombasa is a flagship Belt and Road project.
Ethiopia has a 470-mile electric railway from its country’s capital in Addis Ababa to a port in Djibouti. This project cost £2.5bn funded by a Chinese bank which then awarded the development contract to Chinese companies.
These are just a few of many examples you can find when doing research. There will be countless smaller projects.
Bridges are also very popular, and the one I like the most, is the biggest of them all in Maputo. The cost was around $785 million.
The Gambian government has plans to construct two bridges as well with the support of China.
Unfortunately, there is evidence related to many projects under the care of China that confirm standards have not been so brilliant. One report I read said over half of China’s infrastructure projects are under-performing creating more damage than help.
In some cases, the projects leave enormous debt burdens for the local economy which now also has to deal with costs of repairs or premature maintenance. A good example of this would be a hospital in Luanda which developed cracks extremely quickly in the walls and had to close soon after opening.
Another example of a good project gone bad would be the Chinese built road from Lusaka to Chirundu which was destroyed by the country’s annual rains.
Then there was the $12 million Chinese-built Sigiri bridge in Western Kenya which collapsed before it was even completed. Of course, things like this do happen everywhere, not so long ago a bridge collapsed in Sandton, Johannesburg and as far as I know China had nothing to do with that.
Many failed projects happen because of bad choices. Committees have elected to start a new project instead of spending less on improving current infrastructure, for example, the gauge railway in Kenya, completed at a huge fee of $3.2bn. There was the option to refurbish the existing line for far less, but this was rejected.
This is by far one of the USA’s main complaints as China starts to expand its military interest.
According to South African corporate and military officials, China attempted to establish a maintenance and repair organization in South Africa to service weapons on the continent. This was denied by our Government.
Just next door to South Africa, at the coastal town of Swakopmund in Namibia, there is the most important base related to Beijing’s space programme. This is also a strategic spot of internet infrastructure for Africa.
We have The Chinese People's Liberation Army Support Base in Djibouti operated by the Chinese People's Liberation Army Navy (PLAN). This would be their first overseas military base.
The one report I read also confirmed that China's arms supplies to Africa have increased.
You can reasonably assume China’s military interest in Africa is going to continue to increase. There are speculative plans for a base in Seychelles as well.
I have already mentioned how many Chinese people and companies have made Africa their new home. I wanted to give some examples of very large corporates who have firmly laid their foundations in Africa and are a sure sign that China is not leaving Africa.
Let’s start with Etisalat which has networks covering more than 14 countries including Egypt, Saudi Arabia and Sudan. Additionally, it is also involved with The East African Marine Systems initiative, this is a project related to submarine cable links to the continent.
A frequently mentioned corporate name found during my research is Huawei who were selected by South Africa’s MTN as a strategic partner. Huawei’s main products include switching systems, intelligent networks, Synchronous Digital Hierarchy (SDH) transmission networks, and the list goes on and on. You will find their brand in over 100 countries. I think my mother has a Huawei phone.
Another huge company is Comptel. You will find them all over the world, including South Africa, Namibia, Nigeria, Ghana, Morocco, Sudan, Oman, UAE, Qatar, Pakistan, Jordania and Saudi Arabia.
A lot of hard work went into setting these corporates up and with this level of investment and you can be sure China won’t get up and leave anytime soon.
No one can deny that many of the Chinese companies have helped with employment in Africa, with an estimated several million Africans employed.
One report advised that Chinese corporates have 89 % of African employees used at their companies in Africa. However, there are conflicting reports on the total percentage.
Employment leads to improved standards of living and supports local economies. I can spend a lot of time going into stories about people who have benefited from these jobs, but anyone who has looked for employment, which is most of us at one point or another, already knows how important a job is for us and those we support.
There are negative factors related to Chinese employment, and I would be grilled later on if I failed to mention them, so let me do so now.
There are reports of human rights abuses and violations, child labour and unethical practices by Chinese employers, especially in the fields of mining, fishing and logging. These abuses are well documented and cannot be denied.
Make no mistake, China is an aggressive business. For example, China is the only country in the world that is still opening trading in ivory.
With that said, I would like to remind fellow Chinese critics that for every one picture you can show me related to Chinese bad practices, I can show you two of Africans abusing our own people and resources. The fact is we have hurt our own people and mismanaged our own resources for a lot longer than the Chinese.
Transparency and Inaccurate Reports.
I always pride myself on being someone who knows a little bit about a lot of things.
I believe in this day and age that this skill set equips me better for survival than someone who knows a lot about a few things. Let me elaborate on this logic: my ability to access and process a lot of varied information in this fast-paced and ever-changing world is better than being able to store vast amounts of information on one subject or skillset for a single task, which will probably have a very short shelf life anyway.
Despite this skill set, the subject of China and Africa has managed to boggle my mind. The reason is there is so little information out there I feel I can trust. For example, one article I read was about the total numbers of Chinese firms in Africa. The report said that during their research they picked up that there were thousands of uncounted Chinese firms when they compared numbers to those registered by China’s Ministry of Commerce.
You need accurate data to plot out the most likely end scenario.
Africa in China.
So few people talk about Africa in China… so let me be different.
There are an estimated 200 000 Africans working in China. This number might be minor compared to its inverse, and probably a direct sign of our skillset demand on an international market, but there is a town called Guangzhou I want to tell you about.
This town can be found in a southern Chinese city, which is host to the largest African community in Asia. It has a nickname called the Chocolate City and plays home to many African companies who have reportedly made substantial investments in China.
A report I read said by 2012, investment by Africans was around $14.2 billion, mostly related to petrochemical, manufacturing, wholesale, and retailing industries. Most money came from Mauritius, South Africa, Seychelles and Nigeria.
An example of a product Africa is involved with is Snow Beer. This is apparently the world’s best-selling beer by volume of sales. Few people are aware that the South African Breweries (SABMiller), runs Snow beer as a joint venture with a Chinese firm. SABMiller co-owns more than 90 breweries with Chinese Resources, producing around 30 beer brands. SAB was my very first big client many years back.
Another example of a corporate ‘from Africa’ is the Sino-Arab Chemical Fertilizers Company. They have a joint initiative between Tunisia and China. This venture has grown to become one of the largest compound fertilizer producers in Asia.
It is very easy for people to criticize the Chinese influence in Africa.
People just love to criticize, especially those involved with corporates that are competing in the same market. I am constantly having to defend my company against the opinions of my competitors.
No one can deny that there are positive effects which have resulted because of China’s presence in Africa. I have personally seen the benefit from the use of the less costly Chinese products available for people who need less costly products out of necessity.
To blame China for being so efficient and competitive is just stupid. I am sorry for the frank wording, but I could not think of any other word that was better suited.
We must also take into consideration the far bigger trend and influence of Industry 4.0 which levels the playing fields for all nations worldwide.
Everyone has to start a new strategy, including developed nations who now have to scrap their old ways and even some of their infrastructure because these ‘things’ don’t work in the new world.
With no intention to upset anyone, Africa may very well be better off in many ways under the control of China.
Think about it…
However, to those critics of China who cannot imagine this scenario, here are my three instructions to you:
If we don’t buy China, China cannot sell.
To answer the question in the title of this article, I say Africa is benefiting from China in the fields of technology, but also in social-economical ways.
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Published March 2019Read more articles