- By Thomas E. RicksThomas E. Ricks covered the U.S. military for the Washington Post from 2000 through 2008.
By Katherine Kidder
Best Defense office of Communist Chinese capitalist studies
China’s growing role in Africa over the past decade-or-so has raised some eyebrows. Questions surrounding China’s motives for investment abound: Are they purchasing U.N. votes? Simply extracting natural resources? Expanding the rhetoric of revolution, as it did in the 1960s?
Yet most of these questions presuppose state-led investment in Africa. Xiaofang Shen, a visiting scholar at the Johns Hopkins University SAIS China Studies Program and former investment climate specialist at the World Bank, said in a recent talk at SAIS that the more notable increase over the past decade has been the rise in Chinese private-sector investment on the continent.
Pre-2001, Chinese private investment in Africa was negligible; by the end of 2011, there were 879 private companies and OFDI projects registered with the Chinese Ministry of Commerce. Contrary to the image of state-led extraction, Chinese entrepreneurs focus their energies mainly on manufacturing and service industries. They increasingly are forging relationships with local management, and aware of the value of learning local customs, religions, and languages.
So, what does this mean for the West? Interestingly enough, Chinese private investment in Africa may be a hat tip to Western models of development and governance: Xiaofang Shen’s study finds that going overseas to do business was much easier for up-and-coming Chinese entrepreneurs than starting a business in inland China.
Most of China’s industry grew up in the 1980s and 1990s, with little-to-no regulation. By contrast, many African laws (at least on paper) were copied and/or imposed by the West through such mechanisms as Structural Adjustment Programs (SAPs). As a result, Chinese entrepreneurs find African processes more conducive to business, from obtaining licenses and navigating the bureaucratic process to trusting that the food they eat for lunch is safe. African governments face higher incentives to improve infrastructure and devote resources to political stability and regulatory efficiency in order to attract capital — precisely the same goals reflected in SAPs.
John Reed is a national security reporter for Foreign Policy. He comes to FP after editing Military.com’s publication Defense Tech and working as the associate editor of DoDBuzz. Between 2007 and 2010, he covered major trends in military aviation and the defense industry around the world for Defense News and Inside the Air Force. Before moving to Washington in August 2007, Reed worked in corporate sales and business development for a Swedish IT firm, The Meltwater Group in Mountain View CA, and Philadelphia, PA. Prior to that, he worked as a reporter at the Tracy Press and the Scotts Valley Press-Banner newspapers in California. His first story as a professional reporter involved chasing escaped emus around California’s central valley with Mexican cowboys armed with lassos and local police armed with shotguns. Luckily for the giant birds, the cowboys caught them first and the emus were ok. A New England native, Reed graduated from the University of New Hampshire with a dual degree in international affairs and history.| The Complex |