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Chinese entrepreneurs in Africa, land of a billion customers

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In the Congo by Paolo Woods; image source

Multi-billion dollar resource and infrastructure deals between China and African countries make the business headlines ever more regularly, but there are very few reports on the growing numbers of Chinese entrepreneurs and small private companies seeking opportunities in Africa that they cannot find in China.

Tessa Thorniley looks at how they are faring.

Big in Africa

by Tessa Thorniley

In the peaceful and prosperous Namibian capital of Windhoek, small Chinese businesses have been ruffling feathers.

The trouble began in February when members of the Windhoek chamber of commerce complained that an invasion of Chinese corner shops, hairdressers, restaurants and traders was forcing out local businesses.

"There has been rapid growth in the number of small-scale retailing outlets throughout the country, offering low-quality products and replacing long-existing locally-owned businesses," the chamber announced, lobbying the government to protect Namibian businesses from such energetic Chinese competition.

Hage Geingob, Namibia's trade and industry minister and former prime minister, heard their plea. He banned all foreign investment in hair salons and public transport and introduced a permit system for new shopowners.

In defence of his protectionist new law, Mr Geingob suggested that members of the Chinese business community might have been operating illegally, without registering their businesses or declaring all of their earnings. "There have been concerns sparked by the activities of Chinese business people," he said.

Whatever the excuse, the strength of the backlash shows the extent to which Chinese firms have penetrated markets across Africa, and how worried the locals are. Armies of small entrepreneurs, marching in the wake of China's huge state-owned firms, have reached the very darkest parts of the continent.

"Across Africa today, everywhere, no matter how remote, you'll find a Chinese restaurant and a Chinese shop or local traders," says Martyn Davies, a South African consultant who is a director of the China Africa Network at the Gordon Institute of Business Science at the University of Pretoria. "And African consumers are buying Chinese products. More than two-thirds of the non-food products sold at Shoprite [a South African retail and fast-food group with stores across the continent] are from China," he adds.

 
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