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Dragons in Lion Territory China’s Business relations with Africa
Dr. Emmanuel Kodzi
INTERNATIONAL BUSINESS
Africa and African-American Studies Lecture Series: SYNTHESIS
This image and the text corresponding to this image may only be used for noncommercial educational and scholarly purposes.
Image InformationTitle Cave 329 at Dunhuang
Mogao Cave 329
heavenly king riding a dragon
Date 7th century
Location China (PRC)
Gansu
Dunhuang
Material pigment
Style Period Tang
Description view from east, looking west
west wall, inside of niche, ceiling mural
ARTstor Collection The John C. and Susan L. Huntington Archive of Buddhist and Related Art
Source Data From: The John C. and Susan L. Huntington Archive of Buddhist and Related Art, The OhioState University
Download Size 1024,1024
Photo credits: Artstor
Photo credits: Artstor
Dragons in Lion Territory: China’s business rela6ons with Africa
Photo credit: Kai Krause
Dragons in Lion Territory: China’s business rela6ons with Africa
• Why am I interested? – Business in Ghana – Research at Purdue – Discussions at OSU
• Why should you be interested? – Connectedness of economies – Balance of economic and political power
Dragons in Lion Territory: China’s business rela6ons with Africa
• Africa: chaos, poverty, aid? • Africa: innovation, development, integration?
• China’s approach – high-level and grassroots business deals – smart and sustainable relationships? – Since 1991: 1st foreign minister trip abroad is to Africa
• Implications for international business – Fight, engage or avoid? – India, Japan, US …
Dragons in Lion Territory: China’s business rela6ons with Africa
• Implications for international business – New Silk Route – Lessons for African countries?
Photo credit: the diplomat
• Addis Ababa (1/27): – MoU on continental transport, high speed rail, aviation,
road highways linking capitals across continent • Detailed agreements with individual countries
Engaging the AU
Photo credit: bigstock
• China Machinery Energy Corporation in $982m contract with Angola’s Energy & Water Ministry – Develop gas-fired power plant in North West of country.
• Latest oil and gas discoveries boost exports, and spur investment in new gas power capacity in the country – Angola to invest $23b in energy sector by 2017
Angola
Photo credit: google maps
• Chinese took over abandoned positions in copper belt during recession ($400m in 2009) – Now reaping benefits (mines + smelter); long term
• Business investments with higher rates of return than in mainland China (e.g. 5.6% vs 12.5%) – Chinese migrants in range of service businesses – Better quality of life
Zambia
Photo credit: google maps
• China Africa Resources: London-listed with Namibia as main country of operation – AIM: sub-market of the LSE for smaller companies – CAR owns extensive zinc, lead, silver and vanadium
deposits at Berg Aukas in Northern Nambia.
Namibia
Photo credit: google maps
• Chinese National Petroleum Company: 6-year agreement to increase oil production – Settles CNPC debt owed by Sudan government – Business forum in Beijing: focus on investment
opportunities in Sudan for Chinese businesses • agriculture, industry and trade. Inflow of Chinese capital.
• China is largest foreign investor in Sudan
Sudan
Photo credit: google maps
• $4b project to dig new Suez Canal. Heavy Chinese investment – Natural fit for China’s Maritime Silk Road vision – Project to be run by army
• US sending military helicopters to Egypt (main military partner); China focusing on economic agreements
Egypt
Photo credit: google maps
• China’s economic growth requires continuous energy supply. Increasing oil dependency – CNOOC incorporated in Hong Kong, listed on NYSE,
largest producer of offshore crude and natural gas in China; presence in Canada, Gulf of Mexico, and U.K.
– Strong in Nigeria, new developments in Uganda, plus Equatorial Guinea, Congo, Algeria, Gabon
Nigeria
Photo credit: google maps
• Chinese-financed $30b city in Modderfontein, Gauteng – 01/2015: 1600 hectares of land acquired in 2013
($7b) to build the city. – residential units, central business district – “the Manhattan of Africa”
South Africa
Photo credit: google maps
• 450mile rail line to Djibouti – by early 2016 – $4b by Chinese Railway / Chinese Engineering firm – 3200 miles of new lines across the country by 2020 – Vision of becoming manufacturing hub with efficient
transport, plentiful labor, cheap power • Textile and garment, shoes, vehicle assembly, industrial zones • H&M sources material from Ethiopia
Ethiopia
Photo credit: google maps
• $2.6m Bong mine deal with Chinese consortium – Increased commercial engagement with China; potential
increased FDI, trade, and other commercial activities • Long history of development finance in Liberia • Ebola interventions • Chinese language school
– Power asymmetries?
Liberia
Photo credit: google maps
• Strategic lines between Nairobi and Mombasa, then connect interior of East Africa with Indian Ocean – Part of Maritime Silk Road – Financing of several infrastructure projects – Tussle over 76 cybercrime suspects (cross-border fraud $16.5m)
• Follow court process and diplomatic channels • Power asymmetries again? • Conservationists asking China to stop the trade in ivory and rhino horn?
Kenya
Photo credit: google maps
• International Conference (Re-Thinking African-Asian Relationships, March 2015) to identify and explore ideas about societal development driven by intensified market-oriented interactions. – Impact on “community”, “development”, “diplomacy” ,
“sustainability” , “worldviews”, “cultural intelligence” – Stellenbosch University and Goethe University
Response
Photo credit: CCS
• Economic growth in Africa – Falling commodity prices but rising manufacturing and
service sectors • Telecom, transport, finance, agriculture, entertainment • Nigeria: oil was 90% of foreign exchange revenue but
14% of GDP; now services at 52% of GDP • Similar diversification in Angola, Botswana etc.
– Changing cycles of growth and stagnation by decoupling economy from commodity woes
Economist, 2015
Looking ahead
Looking ahead Economy Ease of Doing Business
RankSingapore 1New Zealand 2United States 7Germany 14Mauritius 28Japan 29Mexico 39Israel 40South Africa 43Rwanda 46Turkey 55Italy 56Ghana 70Botswana 74Vietnam 78Costa Rica 83Namibia 88China 90Swaziland 110India 142Nigeria 170Venezuela 182Afghanistan 183
Doing Business Rankings show improvement
World Bank 2014
• FACT: several US businesses still consider China as a key supplier
• FACT: China focuses on Africa both as a supplier and consumer
• PROPOSITION: US may reap disintermediation advantages through directly engaging Africa
• APPLICATION: current growing international focus on Africa may be signaling to academics the need to understand and theorize frameworks associated with success in African markets
Looking ahead
Contact Dept of International Business, Rollins College
or African and African-American Studies Department
Dragons in Lion Territory
Credits to: for links to several stories