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African and Chinese business leaders forge new ties for better collaboration


by Nadia Gianoli

Business, government, civil society and academia each have important roles to play in strengthening and improving business ties between Chinese companies and the African communities in which they do business. That was the conclusion of delegates attending a three-day dialogue between stakeholders.

Business, government, civil society and academia each have important roles to play in strengthening and improving business ties between Chinese companies and the African communities in which they do business. That was the conclusion of delegates attending a three-day dialogue between stakeholders. Delegates identified several action points for each of these constituencies aimed at building better Sino-African business relations.

The dialogue was organised and hosted by the Ethics Institute of South Africa (EthicsSA), in conjunction with the Centre for International Business Ethics in Beijing. It was a response to research undertaken earlier in the year by EthicsSA, which found that Africans generally had quite negative perceptions about the impact of Chinese business in their countries. You can download the original publication on the Globethics.net website.

China has become Africa’s largest trading partner, with trade now said to have topped the $198.5 billion mark (2012 figures). In addition, China has become a major aid donor to the continent—Africa is the recipient of 45.7 percent of all China’s aid payments.

Given China’s growing role in the continent, it is of prime concern that Chinese trade and investment should benefit Africans in general, and not only African politicians who are involved in such deals.

The intense three-day dialogue was attended by two delegations of seven each from China and Africa respectively. Each stakeholder group contained representatives from business, policy-making, government, academia and civil society. The Executive Director of Globethics.net, a worldwide ethics network based in Geneva, acted as a neutral facilitator.

Having spent three days talking through the issues and exchanging views, delegates were able to identify clear action points for the major role-players.

Business

Delegates concluded that Chinese businesses operating in Africa were often isolated from their host communities, something that created an atmosphere of mistrust. Chinese companies could help bridge this gap by placing much more emphasis on acting as good corporate citizens. By identifying their social and environmental responsibilities and discharging them, Chinese companies would send a clear signal that they wish their activities to benefit the communities and countries in which they operate.

Another important strategy would be for Chinese businesses consciously to partner with local ones. This would not only build bridges of understanding, but would open up new opportunities for both parties—and even the possibility of joint ventures in due course. Such an approach would also help overcome one of main complaints expressed by African businesspeople: that they seldom are invited to participate in any of the massive infrastructure projects being undertaken by Chinese companies.

Government

The point was clearly made that Africans cannot point fingers at Chinese businesses when their governments often do not have frameworks in place that all foreign investors should follow. African governments have a responsibility to develop and enforce clear, unambiguous frameworks that would give Chinese businesspeople guidelines. No businesses like uncertainty, and one cannot in one sense blame them for exploiting it.

Conversely, the Chinese government also should consider setting clear standards for Chinese companies working overseas. There has been some talk of introducing a corporate responsibility rating system for overseas Chinese companies, something that could make a positive contribution. Certainly, it might be of value if the Chinese government actively promoted certain product and business behaviour standards for businesses operating in Africa and other foreign markets.

In addition, if the Chinese government engaged with African civil society organisations, especially in relation to aid, it could materially improve the image of China and Chinese business on the continent.

Civil society organisations

These organisations are already operating in most African countries. One of their main contributions should be to act as watchdogs, and provide in-depth research to inform both policy and business strategy.

In addition, African civil society organisations could profitably engage with their Chinese counterparts to find new ways of building understanding between Chinese companies and nationals doing business in Africa and their surrounding communities.

Academia

Business schools on both continents have a major contribution to make by preparing business leaders to work with each other, and in teaching the principles of ethical leadership and corporate governance. Once business leaders from both sides embrace the concept of sustainability in all its facets, they will naturally adopt business practices that support greater collaboration.

Outstanding issue – Informal Chinese traders

While the majority of Chinese businesses operating in Africa do so "officially" in the sense that they are registered with the relevant Chinese and African government authorities, there is a sizable minority of Chinese entrepreneurs who are operating under the radar. The Chinese government can hardly see their operations, and they frequently fail to register with the taxation or other authorities in their host countries. These are often the businesspeople most at personal risk, and whose business practices contribute to the popular perception of Chinese business as exploitative, and of Chinese goods as shoddy.

The delegates agreed to apply their minds to come up with ways to reach this community, and bring it into this dialogue.

Overall, the dialogue concluded that both business and government, Chinese and African, shared responsibility for ensuring that China’s business presence in Africa was not just one focused on extracting raw materials, but that it stimulates African economic development as well.

The delegates committed themselves to drafting a detailed joint report, and to disseminating their conclusions as widely as possible within their own spheres of influence. A follow-up dialogue to take the process forward will take place in China in 2015.

15 September 2014

For more information on EthicsSA please visit:

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Published on: 15 September 2014
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