Chinese business interests in Africa – the official ones, at least – date back more than 50 years to when the country started setting up diplomatic relationships across the continent.
The barriers have been considerable (crossing the language barrier is difficult enough) but Chinese businessmen appear determined to succeed. However, Africa, as the weaker of the two in economic terms, has been largely on the receiving end of this relationship.
The tall buildings, brand new roads and refurbished feeder roads stand as testament to China’s growing interest in the continent’s socioeconomic development. But there’s no escaping the fact that Chinese state-owned enterprises are interested in gaining access to raw materials in Africa.
Nigeria, for example, has benefited from a Chinese-funded road reconstruction drive and, earlier this year, it was promised US$2.5 billion for further infrastructure projects as well as a US$50 billion export credit guarantee intended to support Chinese projects in the country. In return, China hopes to secure oil deals – much like it has in Angola and Sudan – and break the dominance of Western energy companies in Nigeria.
Off the beaten track
However, China is also active in countries that are less obvious investment targets, places that either come with a history of political turmoil or are simply less blessed with natural resources. Much of the investment, although often fostered by government initiatives, comes from the private sector.
Liberia has seen plenty of road reconstruction thanks to China, but Chinese entrepreneurs are also forming partnerships with Liberian professionals in the health care sector. Walking along the streets of Monrovia, it is hard to miss the Chinese restaurants and hotels.
In Sierra Leone, this small-scale Chinese investment boom is even more apparent.
Unlike many other countries, Sierra Leone produces virtually nothing and depends almost exclusively on imported goods. But to Chinese traders, this represents a business opportunity. Many have set up businesses in the Guoji Groups’s processing zone in eastern Freetown. Guoji imports raw materials and does the processing and final assembly of a variety of products in Freetown. The firm serves as a host for other Chinese companies looking to establish a foothold in Sierra Leone. These entrepreneurs are also given start-up capital of up to US$1,000.
Chinese traders are involved in everything from hotel management to welding shops. Drug peddlers even conduct informal business in public places, pulling assorted Chinese-made medicines from their backpacks.
Entrepreneurs who are able to afford their own premises often employ local people. One such entrepreneur is a man named Chen, owner of Fashion Star, a Freetown jewelry shop. Chen started out in the Guinea before moving on to neighboring Sierra Leone when business got rough.
The challenges Chen faces are common to many Chinese small businessmen in the country: His English is weak and he doesn’t speak any of the other local languages, which makes communication with customers difficult, and he is plagued by theft, both from his shop and while his stock is in transit.
Outside the law
On the face of it, small-scale trade is not lucrative for Chinese investors in Freetown. This pushes some traders deep into Sierra Leone’s interior – and sometimes beyond the bounds of the law – in their search for better returns. Natural resources are an obvious choice and, according to the government and environmental groups, illegal logging has become rife.
This did not go down well with either the local government or the Chinese ambassador. The latter suggested that any Chinese caught participating in this activity be arrested.
Despite encountering difficulties, most entrepreneurs remain set on bridging the economic gap between China and Africa. The development of this relationship doesn’t come without frictions. In some countries this is manifested in a growing resentment toward Chinese traders who bring in low-cost goods and stifle the local competition.
But there are two sides to every argument. Sierra Leone is still picking up the pieces of its shattered economy after civil war. China has noticed this weakness and made full use of its power to get the wheels of commerce turning again.