China’s Private Enterprises in Africa and the Implications for African Development

Abstract

This paper evaluates the growing presence of China’s private business sector in Africa. Currently, attention focuses on China’s state-owned enterprises in extractive industries. Less attention is paid to Chinese private enterprises. This study fills a knowledge-gap by evaluating characteristics and motivations of Chinese private firms in Africa, and assesses their development impacts. Key findings are that the Chinese private firms have followed their own paths to Africa, and the primary factors driving private investment are African market opportunities, competition within China and the presence of a strong entrepreneurial spirit. An effective mechanism bridging a gap between China’s African Policy and its implementation in terms of private sector engagement is lacking. To maximise development gains, a top-down and bottom-up ‘two-way street’ approach to Chinese public-private sector relations is necessary. This is a mutual learning process for the Chinese public and private sectors and also China-Africa relations. These are fluid relationships with each adapting to and shaping the other.