China in Africa: Competing with China
Africa is becoming an ever increasingly attractive market for investors. This is most notable in the realm of new discoveries in the oil, gas and minerals sectors where 48 out of 54 African countries are currently engaged in prospecting activity.
In some African countries, the Sino-African relationship is so deep that it appears hard to break the advantage apparently enjoyed by Chinese companies
At FTI Consulting we work with a range of organisations looking to better understand this market. The risk spectrum is broad – security threats, political instability, bribery and corruption all remain uppermost in the minds of investors. Against this backdrop, the phenomenal demand in China for African commodities, minerals and energy has driven significant Chinese investment activity across the continent, and presents significant challenges to competitors seeking to secure advantage.
In some African countries, the Sino-African relationship is so deep that it appears hard to break the advantage apparently enjoyed by Chinese companies. As a result of this tide of interest, the Africa and Asia Global Risk Investigations Practice at FTI Consulting has developed an analysis of Chinese engagement in Africa.
Western businesses need to understand the politics and the personalities of the different markets within Africa, as well as the Chinese relationship with the Continent. In some circumstances Chinese and Western companies will increasingly need to act as partners as the challenge of single enterprise success becomes too great. China is on its own track, with key political changes and a strengthening appetite for reform and transparency looming ever larger. The prizes will be there for those companies who learn to ride the twin tigers of tightening Western business conduct legislation and China’s imperative to go out and win.