China has become a global power, but there is too little debate about how this has happened and what it means.
Many argue that China exports its developmental model and imposes it on other countries. But Chinese players also extend their influence by working through local actors and institutions while adapting and assimilating local and traditional forms, norms, and practices.
With a generous multiyear grant from the Ford Foundation, Carnegie has launched an innovative body of research on Chinese engagement strategies in seven regions of the world—Africa, Central Asia, Latin America, the Middle East and North Africa, the Pacific, South Asia, and Southeast Asia.
Through a mix of research and strategic convening, this project explores these complex dynamics, including the ways Chinese firms are adapting to local labour laws in Latin America, Chinese banks and funds are exploring traditional Islamic financial and credit products in Southeast Asia and the Middle East, and Chinese actors are helping local workers upgrade their skills in Central Asia. These adaptive Chinese strategies that accommodate and work within local realities are mostly ignored by Western policymakers in particular.
Ultimately, the project aims to significantly broaden understanding and debate about China’s role in the world and to generate innovative policy ideas. These could enable local players to better channel Chinese energies to support their societies and economies; provide lessons for Western engagement around the world, especially in developing countries; help China’s own policy community learn from the diversity of Chinese experience; and potentially reduce frictions.
Joint ventures have enabled Chinese companies to cultivate a presence in three West African countries—Ghana, Niger, and Nigeria. Investing in joint ventures has enabled Chinese cultural adaptation by emphasizing training programs in languages commonly spoken in West Africa, embracing local management styles, and assimilating some local practices.
This has been especially true in three key economic sectors: free trade zone promotion and related services, transportation and aviation, and oil and gas. Chinese firms are also complementing these growing business arrangements with the use of local languages, social media outreach, and other forms of local engagement with West Africans. In doing so, Chinese organizations have responded to some of the demands of their African partners in local, state, and central government posts.
It would be beneficial for African governments, businesses, and corporate managers to explore further ways to incentivize Chinese government decisionmakers and Chinese businesses to use joint ventures more often as the vehicle for their investments in Africa. To deepen the impact of such efforts, they should also encourage Chinese organizations active in West Africa, and across the continent in general, to embrace the use of local languages, especially for conducting business, and to train more Chinese expatriates to use African managerial philosophies that have proven to respect local values while being effective in African markets.
Research on China’s engagement abroad and Chinese firms’ business operations in foreign countries often argues that Chinese organizations are not keen to adapt to local contexts. As a result, some analysts of China-Africa relations argue, or at least imply, that China does things as it wishes in Africa and that African countries have little agency in shaping how Chinese governmental and commercial players operate in their countries.
Some analysts have even characterized African countries’ relationships with Beijing as the “Chinisation of Africa.”1 This line of thinking tends to assume that local contexts have mattered little for Chinese economic activities in Africa so far.
But Chinese commercial engagement in Africa is increasingly adaptative to local contexts, conditions, and complexities. In Ghana, Niger, and Nigeria, Chinese actors are adjusting their ways of doing business to consider local realities with respect to both formal and informal institutions.
For one thing, the Chinese players who are active in these three countries are acknowledging and mobilizing African practices and cultural traditions to support their own business goals and sometimes those of their local partners. The level of Chinese economic engagement tends to differ from one African country to another, with some places being more welcoming of a Chinese commercial presence than others.
The specific patterns of Chinese adaptation also tend to vary between different parts of Africa. For instance, these adaptations may look different in a Francophone country like Niger than they would in a country like Nigeria. Niger is a nation where China’s adaptation differs from its adaptation in Ghana or Nigeria since language and managerial practices partly are derived from various French and British cultural traditions and colonial imprints in those three African countries.
CHINA’S ECONOMIC IMPACT IN WEST AFRICA
Chinese companies have been active throughout West Africa, and joint ventures have been a prominent feature of this engagement—one that allows African partners to shape and influence these firms’ business practices. This analysis focuses on three such joint ventures: the Lekki Free Zone Development Company (LFZDC) in Nigeria; Africa World Airlines (AWA), an air carrier based in Ghana; and the Zinder Refining Company (hereafter referred to as SORAZ) in Niger, an oil refinery involving a partnership with one of China’s major oil and gas firms, the China National Petroleum Corporation (CNPC).2
These three major Sino-African joint ventures are still operating more than a decade after their creation. And whereas many Chinese joint ventures in Africa and around the world have failed, these three have managed to survive all the cross-cultural challenges and pitfalls associated with international investment partnerships in Africa. Indeed, one can even argue that these joint ventures now enjoy more success than typically expected in West Africa.
After all, LFZDC has become Nigeria’s premier company in managing a free trade zone (a zone where established businesses enjoy tax breaks and other preferential treatment) and for attracting new foreign direct investment (FDI), especially from China,3 while AWA is now one of Ghana’s leading airlines with more than 2.5 million passengers served,4 and SORAZ is a top refinery in Niger.5
In general, the literature on international joint ventures predicts that they face a high risk of failure if an investment strategy is poorly executed in the host country, whereas their success depends on partners’ local network advantages such as good business ties in the host country and on local institutional differences.
6 So it is noteworthy not just that these three joint ventures have been relatively successful but that they have done so in an economic and investment environment generally seen as risky.7 Quite clearly, the reason for their relative success is the high level of familiarity they have demonstrated with their local environments. Table 1 highlights the background of these three joint ventures and their major Chinese and African stakeholders.