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US-China teamwork could mean a win-win-win for Africa

By Zhang Yuwei (China Daily USA) Updated: 2014-08-14 11:05

The just-concluded US-Africa Leaders Summit was three days of President Barack Obama and his Cabinet members engaged with a number of African heads of state discussing the most pressing issues the continent faced and - most importantly - how to make progress on them in the future.

Some Western pundits see the summit as the US turning its attention to a continent that lags behind on development, coupled with challenges in many areas. Others consider it US efforts to catch up with China, which has become an increasingly important investor on the continent.

For years, Africa has been a recipient of humanitarian aid from developed countries and has been a center for the achievement of the United Nations-proposed Millennium Development Goals - a set of development targets agreed on by the international community, which focuses on reducing poverty and improving the welfare of the world's poorest countries. For too long, the potential of the continent has been neglected.

But to help unlock the potential in Africa, forming a win-win partnership between the world's two largest economies - the US and China -would work better than competition for all parties concerned.

"Headlines such as 'the US needs to catch up' or 'the US is lagging behind' sound like a cold war-style zero-sum competition between China and the US in Africa," said Zhiqun Zhu, director of theChinaInstitute at Bucknell University.

"The fact is both countries can help Africa, and African nations can benefit from both of these great powers," said Zhu. "China so far has focused on investment in infrastructure, which is in demand by African countries. The United States, on the other hand, has a competitive edge in education and innovation, which can help African nations develop in the long term."

John Quelch, a professor at Harvard Business School, also said China's infrastructure and manufacturing expertise was valuable for Africa. "The US can offer expertise in science, health and education, the service sector more broadly and how to develop a strong consumer-based economy," said Quelch.

"While China's recent experience of economic development is very relevant to emerging African economies, the US needs to better understand the China model and joint projects with China in Africa can help develop that understanding," said Quelch.

Richard Attias, who is the founder of the New York Forum and has been co-organizing the forum's Africa edition in Gabon for the past three years, said global partnerships are key to helping create local jobs in Africa.

"If we put Chinese companies together with US and European companies and maybe build joint ventures in Africa, this is the future of our economy," Attias said.

Quelch said China and the US had much in common. "Given so many shared values, imagine what we can do together to help the world's problems if we collaborate rather than compete," Quelch said.

Douglas Zeng, a senior economist at the Financial and Private Sector Development Department of the Africa Region at the WorldBank, said the partnerships - regardless of the fields - should combine both countries' strengths and overcome the differences in approach and ideology.

If the "soft" strengths of the US - such as the understanding of Africa's political, legal and economic systems - are combined with China's "hard" strengths - such as expertise in infrastructure, manufacturing and agriculture - it would be a win-win-win for the US, China and Africa, Zeng noted.

China-Africa trade has grown rapidly in the past decade. In 2000, bilateral trade between the two sides was around $10 billion, while in 2012 it topped $200 billion. Chinese foreign direct investment in African nations is expected to reach $50 billion by 2015, according to a report published by Standard Bank, a South African lender.

Meanwhile, Chinese investors have already tapped into most of the industries there, including health, education, transport and storage. There are now more than 1,600 Chinese development finance projects totaling $75 billion in more than 50 African countries.

But for Chinese investors, the challenge is how to keep their investments sustainable and expand their portfolios beyond just infrastructure and manufacturing-based projects.

"Chinese investors need to understand more about the political, legal and cultural aspects of the host countries in Africa, engage more with the local communities, have a better communication strategy to make themselves known to the locals, and try to strengthen the linkages with local economies," said Zeng of the World Bank.

Asoka Ranaweera, a Washington-based business consultant who advises investors - including Chinese - on how to structure investment and trade projects in 12 African countries, believes it's time Chinese companies strengthened their corporate social responsibility (CSR) strategies, which most US companies score high on.

"It's very important for Chinese companies to become more sensitive to the CSR needs of their hosts in Africa," said Ranaweera, adding that one of the major complaints by Africans of Chinese companies has been the lack of sensitivity they have shown to workers and communities in recent years.

"A CSR strategy is vital to the long-term benefit of Africa-China relations," said Ranaweera.

Contact the writer at yuweizhang@chinadailyusa.com.

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