AChinese-investedclothes-makingenterpriseinDaresSalaam,TanzaniaWithabundantlaborresourcesandtheincreaseinpolicysupportforeconomicdevelopmentandforeigninvestment,Africaisbecominganewsought-afterdestinationforinvestmentbymultinationalcompanies.Amongthem,Chineseinvestmentsaretakingupanincreasinglyprominentplace.AccordingtoErnst&Young,Chinesebusinessesinvested$66.4billionon239projectsinAfricafrom2005to2016,creatingmorethan130,000jobsforlocalpeople.Theinvestmentscoveredawiderangeofsectorslikeenergyandresources,infrastructureconstruction,aswellasagricultureandrelatedindustries.
Bytheendof2017,Chinahadbecomethethirdlargestforeigninvestoronthecontinent.TheBeltandRoadInitiativefurtherstimulatesanewupsurgeinChina鈥檚investmentinAfrica.Alongwithrecognition,therisksChineseinvestorsarefacinginthisregardareattractingwidespreadattention.
Securityconcerns
The2018China鈥檚OverseasSecurityRisksBluebookjointlyissuedbyChinaOverseasSecurityResearchInstituteandChinaNationalPetroleumCorp.earlierthisyearcategorizesninecountriesworldwideasextremelydangerousforbusinesses.TheyareAfghanistan,Libya,Syria,Yemen,SouthSudan,Sudan,Somalia,CentralAfricanRepublicandVenezuela.Disturbingly,fiveoutoftheninecountriesareinAfrica,reflectingtheprominentsecurityissueofChina鈥檚investmentonthecontinent.
Onthewhole,securityrisksofChina鈥檚investmentinAfricaarehighlightedinthreeaspects.First,WesterncountriescontinuetoholdahostileattitudetowardChina鈥檚investmentinAfricancountries,maliciouslyadvocatethe鈥淐hinathreat鈥漷heoryandtarnishChina鈥檚constructiveengagementinAfricaas鈥渘eocolonialism.鈥滱sformercolonialmasters,theyexerttheirinfluencesonpoliticalleadersorinterestgroupstoundermineChina-Africacooperation.
Second,theincreasinglycomplexpolitical,religiousandethnicconflictsinsomeAfricancountriesandregions,especiallyinNorthAfricaandtheAfricanGreatLakesRegion,resultinsocialinstabilityandupheaval,furtherdauntingtheinvestmentprospect.Overthepastyears,variousextremistforcesrepresentedbyIslamicextremismhavecontinuedtopenetrateandexpandtoNorthAfricaandSub-SaharanAfrica.Forexample,extremeterroristgroupssuchasBokoHarampledgedallegiancetotheIslamicState.Themilitantshavebeenlaunchingguerrillaraidsagainstgovernmentforcesofsurroundingcountries,duringwhichtheyconstantlyharassandbrutallyattackinnocentcivilians,severelydisruptinglocalstabilityanddevelopment,aswellasthebusinessenvironment.
Intermsofdomesticpoliticalsituations,externalinterference,domesticreligiousconflicts,confrontationbetweenthegovernmentandlocalethnicminorities,andregionalpoliticaltensionscreateabreedinggroundforvariousextremists.TheriseofBokoHaramshowsthataslongasthetimingisappropriate,separatistsandextremistswillexpand,jeopardizingthesafetyofbothChineseinvestmentandfacilities,aswellasemployeesofChinesefirms.
Third,thebusinessenvironmentofthehostcountryisaveryimportantconsiderationformultinationalcompanies鈥檌nvestmentdecisions.Thelossesareoftenunbearableiftheenvironmentispoor.OntheannualEaseofDoingBusinessIndexissuedbytheWorldBank,Africancountriesoftenranklowestamongthesurveyed190countriesandregionsworldwide.Inadequatelegalandtaxationsystems,corruptioningovernmentandthemilitary,andoverlapsofadministrativedepartmentsareuniversalproblemsinmanyAfricancountries.ThesealsoseriouslyaffectthenormaldevelopmentofChinesebusinessesandtheirinvestmentinterests.
AberthatMombasaPortinKenyabuiltbyaChinesecompanyThefutureofChina-Africaeconomiccooperationisbright.Aslongasmajordifficultiesarewellresolvedandrisksaredealtwithbypreventivemeasures,thepartnershipsbetweenChinaandAfricancountriescouldbedeepenedandexpanded.
Riskassessment
Inthelongterm,China-Africafriendshipiscloudedbythepossibleprospectsofsuddendeteriorationofrelationsamongmajorworldcountries,hinderingin-depthChina-Africacooperationonawiderscale.Intheshortterm,someinvestmentprojectswereaccidentlyinvolvedincertainpoliticalfeuds,escalatingtheuncertaintiesandriskstheyface.Toeffectivelycontainpossiblerisks,Chinashouldtakecountermeasuresfromthefollowingthreeaspects.
First,Chinashould,asalways,adheretotheprincipleofnon-interferenceintheinternalaffairsofothercountriesandstrictlyabidebytheprincipleofneutralityininvestmentactivities.Itiswisetolearnfromothers鈥檈xperience,conductbusinessactivitiesfromaneutralstance,andconsciouslyavoidgettinginvolvedinvariouslocalpoliticalormilitaryconflicts.Historicallyspeaking,ChinahasnodisputeswithAfricancountries.China鈥檚investmentsinAfricaarerestrictedtothecommercialsectorsandareconductedinaneutral,cooperative,mutuallybeneficialandwin-winmanner.
Second,Chinesebusinessesshouldactivelyshapepositivecorporateimagesthroughstrengtheningtheabilityofconductingpublicdiplomacy.Beforeinvesting,theyshouldfullylearnlocallawsandcustoms,andtheprocedureofdoingbusinesses,followissuesrelatingtolocalpeople鈥檚livelihood,andhonortheirrightstoknow.Meanwhile,theyshouldactivelyconductpublicrelationsactivities,contributetolocalcharitablecauses,andinvitelocalmediaoutletstovisitandlearnabouttheirprojects,soastoestablishdynamicinteractionanddialoguewithlocalsociety.Theyshouldalsoimprovetheirwayofdulyandeffectivelyinforminglocalpeopleoftheircontributiontowardprotectingthelocalenvironmentandfulfillmentofcorporatesocialresponsibilitiestoavoidpossiblehostilities.
Third,theChineseGovernmentshouldcoordinatetoestablisharisksassessmentandemergencyresponsemechanismforthecountry鈥檚foreigninvestments.Currently,asChinahassecureditsmarketstanceinAfrica,itfacesachangedpriorityofstabilizingandexpandingitsinvestmentinterests.Againstthisbackdrop,thegovernmentshouldassistenterprisesinestablishingsuchamechanismwhichmaycomprehensivelyassessChina鈥檚foreigninvestmentrisksintermsofpolitics,businessenvironment,security,marketstabilityandunpredictablethreats,andthenmaketailoredcomprehensiveresponseplansaccordingly.
ThefutureofChina-Africaeconomiccooperationisbright.Aslongasmajordifficultiesarewellresolvedandrisksaredealtwithbypreventivemeasures,thepartnershipsbetweenChinaandAfricancountriescouldbedeepenedandexpanded.Inthefuture,theBeltandRoadInitiativeprovidesanotherimportantplatformforcooperation.AfricancountriesareexpectedtoattractmoreChinesebusinesses.Therefore,allrelatedpartiesaresuggestedtosumuppreviousexperienceandmakegooduseoftheestablishedfoundationtopreventpotentialrisksforanewchapterinChina-Africamutuallybeneficialeconomicpartnership.
Commentsto
TheauthorisanassociateprofessorofBeijingAcademyofSocialSciences