Chinese firms must take longer-term view on Africa

By Cheng Cheng Source:Global Times Published: 2017/12/3 23:13:28

Illustration: Peter C. Espina/GT



 

In recent years, owing to the Belt and Road (B&R) initiative and 10 major programs announced by China in 2015 to boost China-Africa cooperation, sub-Saharan Africa has become a hot investment destination for Chinese businessmen.

Trade between China and Africa reached $220 billion in 2014, 22 times more than in 2000.

But some incidents have occurred along with the growing economic exchanges between China and Africa, and the frequency of such incidents has increased. On October 4, a group of Chinese nationals was arrested in Zambia during a law enforcement operation. Two days later, a Ghanaian died in a clash with a Chinese national, resulting in local anger at the Chinese.

After analyzing the public relations crises that Chinese enterprises have encountered in Africa in recent years, we can easily see that some of them were malicious slander by the Western media, although some irregular and illegal behavior did take place in the business operations of Chinese enterprises in Africa. There are three related problems.

First, Chinese enterprises generally have poor communication channels with the local media in Africa.

Second, Chinese enterprises don't have contingency plans for public relations crises when it comes to labor rights and standards, legal visas for Chinese employees, tax evasion and bribery.

Third, some small and medium-sized Chinese companies lack a basic understanding of public relations, the media and the law. The domestic consulting companies they can employ are also few.

To improve the public image of Chinese enterprises in Africa, the following efforts can be made.

Chinese enterprises in Africa should strengthen their sense of public relations to manage communications with the local media. Chinese enterprises have tended to focus on just running their businesses and ignoring the cultivation of public and media relations. Most of these companies lack specialists in media relations and public affairs. These companies are also weak in language and interpersonal skills.

Legal systems vary among different countries, especially as to media coverage. Chinese enterprises should establish positive relations with the local media, hire public relations experts and cultivate a positive corporate image. This can help them cope with false or misleading reports.

Also, Chinese enterprises should strengthen their corporate social responsibility awareness and pay special attention to the impact on the society and natural environment of their business operations. Corporate social responsibility should not just be a response to a crisis - it should be embedded as a core risk control system in the management mechanism of an enterprise.

Companies can take advantage of their corporate social responsibility contributions such as tax payments and job creation to offset both commercial and non-commercial risks.

Change can be manifested at three levels in each operation. First, Chinese firms should diversify the sources of local staff and establish a system to preserve tax and employment data. Second, they need to comply with laws and regulations and use legal tools to protect the company's interests. They should also avoid partisan politics and back-door deals that may lead to involvement in local political struggles. Third, they should make active use of public relations to create a good business environment. In countries with an electoral system, market share can be used to influence the government.

Finally, Africa-based Chinese enterprises should shift their investment mindset and pay attention to long-term operating conditions as well as to their public image.

With investment in Africa deepening, an unsystematic approach to development is no longer tenable. Companies must tap products and industries that are competitive in the local market.  Thorough due diligence should be conducted by professional consulting firms so that bad investment decisions can be avoided.

With the continuous development of China-Africa trade in recent years, Chinese enterprises have been putting more money into Africa. Along with the pursuit of profits, enterprises should carefully manage their public image in African countries.

By obeying local laws and regulations, respecting local customs and habits and assuming their proper corporate social responsibility, Chinese enterprises can establish a benign image in Africa. This will promote the development of China-Africa economic and trade relations and friendly interactions among people at both ends.

The author is an associate research fellow with the Chongyang Institute for Financial Studies at Renmin University of China. bizopinion@globaltimes.com.cn



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