Published online in Wiley Online Library (wileyonlinelibrary.com)

© 2014 Wiley Periodicals, Inc. • DOI: 10.1002/tie.21645

LETTER FROM THE EDITOR 391

The New Silk Road

For two millennia China traded with African coun-

tries on the well-traveled Silk Road.1 During the

1400s Admiral Zheng He brought a giraffe from

Somalia to China’s Emperor Yongle, in a continuation of

trade and engagement between Africa and China.2 The

2013 trade between Africa and China exceeded US$2

billion, with about one-third of this consisting of China

exports to Africa and the remainder African exports—

mostly natural resources—to China.3

The continent of Africa, the second-largest continent

with the second-largest population, exceeds one billion

people and is one of the world’s most vibrant economic

regions. Africa is home to more than 50 countries. Seven

of the world’s ten fastest-growing economies in the next

five years will be African.4 Africa will soon have a popula-

tion larger than China and is forecasted to exceed two

billion by 2050. China is Africa’s largest trading partner.

Africa is big business for China as they pursue opportu-

nities along the New Silk Road. In the West, we know

relatively little about the African economy, geography,

culture, or business practices. It is likely that we know less

about China-Africa trade and investment.

In this issue we include articles that focus on busi-

ness in China and in Africa, particularly drivers of inward

and outward investment. The first article, by Huang and

Chi, compares behaviors, motives, and characteristics of

outward foreign direct investment (ODFI) between Chi-

nese privately owned enterprises (POEs) and state-owned

enterprises (SOEs). They find that POEs engage in ODFI

due to the unfavorable institutional environment they

face in China and to seek resources.

Nyuur and Debrah focus on predicting foreign firms’

expansion and divestment intentions based on insights

from Ghana. They found that favorable government

regulations, low cost factors, and good infrastructure are

important in influencing foreign firms’ expansions deci-

sions. Unfavorability of these factors within the business

environment, on the other hand, will stimulate strategic

divestment.

Sun and Liang examine the linkage between inward

private equity investment and outward-facing activities,

including restructuring boards of directors, rebuild-

ing top management teams, reconfiguring corporate

resources, reframing the industry structure, and altering

competitive dynamics. These changes encourage emerg-

ing multinational corporations (MNCs) like Lenovo or

Huawei to induce or modify corporate strategies such as

speeding up the internationalization process, locating

additional outward ventures in advanced economies, and

choosing more complex entry modes, particularly cross-

border mergers and acquisitions.

Adams, Debrah, Williams, and Mmieh examine fac-

tors that influence the inflow of foreign direct investment

(FDI) into sub-Saharan Africa. They use two financial

MNCs as case studies and investigate the environmental

factors that influenced their decision to choose Ghana as

an investment destination. They also examine the insti-

tutional and regulatory factors that affect these MNCs’

current operations and future investment decisions.

Maklan, Knox and Antonetti, in their Case Study,

investigate the success drivers for GTBank of Nigeria.

These include (1) effective leadership; (2) focus on

ByMary B. Teagarden

392 LETTER FROM THE EDITOR

Thunderbird International Business Review Vol. 56, No. 5 September/October 2014 DOI: 10.1002/tie

Notes

1. Liu, X. (2010). The Silk Road in World History. New York, NY: Oxford University Press.

2. Viviano, F. (2005). China’s great armada, Admiral Zheng He. National Geographic, July, p. 6.

3. China in Africa: The real story. (2013). Retrieved July 1, 2014, from http://www.chinaafricarealstory.com/2013/09/china-africa-economic-and-trade.html; Rotberg, R. (2014). China’s Trade with Africa at an all time high. Christian Science Monitor, April 19. Retrieved July  1, 2014, from http://www.csmonitor.com/World/Africa/Africa- Monitor/2014/0319/China-s-trade-with-Africa-at-record-high

4. Africa’s Impressive Growth. (2013). The Economist. Retrieved July 1, 2014, from http://www.economist.com/blogs/dailychart/2011/01/daily_chart

people; (3) use of a simple, focused strategy; (4) a sustain-

able banking culture; (5) confronting the external envi-

ronment; and (6) exploitation of technology to accelerate

business. Lessons drawn from GTBank suggest decisions

that executives need to take, often in challenging external

circumstances like those common in Africa, in order to

preserve the long-term sustainability of an organization.

Eric Meijer provides a book review of Managing Country Risk, a topic that is particularly germane in chal-

lenging business environments like China and Africa.

This issue makes a modest contribution to understanding

underexplored, but critical, business dynamics in Africa

and between Africa and China on the New Silk Road.