Uk firms to consult with private firms and state investors to try and avoid disasters of the continent's colonial past
China has embarked on a series of joint projects with Britain in Africa, with the aim of avoiding the abuses and mistakes committed by former colonial powers as it rapidly increases its economic role on the continent.
China invested $4.5bn in infrastructure in Africa in 2007, more than the G8 countries combined, and much of the investment has been private. The number of Chinese companies operating in Africa has more than doubled in just two years to 2,000, with about 400 operating in Nigeria alone, according to new research.
In contrast to the "one-dimensional" stereotype of state-owned enterprises extracting natural resources, most of the investment is from privately-owned firms and many are involved in manufacturing.
However, many of the business practices followed by those companies, such as a preference for using Chinese workers, coupled with Beijing's belief that human rights are the preserve of host country governments, have led to claims that the rapid rise in Chinese influence in Africa has not helped its human rights.
"The Chinese firms that are moving are building infrastructure, they are building roads, they are providing jobs for people, but at the same time: what they are not doing, neither the Chinese government nor the companies, is raising any issues about how the population are being treated," Irene Khan, Amnesty International's secretary general, said today.
"Therefore we find that the Chinese presence is not helping the human rights situation. It might be aggravating it when revenues and resources are being paid into coffers of hugely corrupt and oppressive governments."
In an apparent reflection of Chinese anxiety over its reputation in Africa, both embassies and companies have been urged by Beijing to forge closer links to local communities.
China has also entered into a partnership with Britain's department for international development, (Dfid)intended to monitor and control the social and environmental impact of Chinese investment.
In the Democratic Republic of Congo, for example, Dfid is working with the government and Chinese companies to fund the drafting of social and environmental standards that road building projects will have to adhere to, and to carry out assessments of the impact of the new roads.
Until now, most attention has focused on the multibillion-pound infrastructure-for-resources deals which China has signed with African governments.
The problem facing such government-to-government programmes is that the projects are no longer being carried out by central planners, but by a plethora of Chinese firms.
Evidence from more than 100 interviews with businesspeople and officials in both China and Africa indicates that more than 80% of the companies operating on the continent are privately owned. In 2006, the Chinese EXIM Bank estimated that there were only about 800 Chinese companies in Africa.
"These entrepreneurs have an agenda of their own, which they have been left free to pursue by the Chinese government. It is the usual one of the pursuit of profit and the exploitation of business and market opportunity," said dr Jing Gu, a research fellow at Sussex University's Institute of Development Studies, which carried out the research.
She said Chinese businesses were well placed to tap into what some called "the last golden land" because of similarities to the Chinese market of the 1980s and 90s, and because there was so much competition domestically.
"The Chinese private entrepreneur ... is willing to take a long view and endure tough contemporary conditions and relatively low returns to be able to entrench himself locally," she argued.
Plummeting exports to Europe and America – with trade hit by both the appreciating renminbi and the global economic crisis – have increased the keenness to move into new markets. One Chinese newspaper described Africa as "the best refuge for sunstroke prevention from the financial crisis".
While Beijing has encouraged businesses to move into overseas markets, officials monitor activity so loosely that many of the firms Gu studied have not even registered their investments.
According to official figures, only 4% of China's foreign direct investment went to Africa in 2006, compared to 26% to Latin America and 64% to Asia. But Gu said the pace of growth has been rapid.
While some firms employ significant amounts of local labour in Africa, Gu said resentment was building up in some places.
"Specific problems do arise because of the tendency of Chinese to behave quite ethno-centrically. They prefer to employ their own people; not so much Chinese nationals, as people from the same regions or even extended families as themselves, whom they know and are used to.
"Also, the Chinese work ethic is to work very hard, long hours for little money, hoping eventually to establish themselves in an area, to be able to replace others. Some of them even import some labour illegally to get around local immigration restrictions. This does produce some social tension and even violence between Chinese and Africans in such countries as Nigeria, Ghana and Madagascar," she said.
"But there is also recognition of the actual and potential benefits of China's involvement."
Copyright Speakers Corner 2017