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It makes good business sense

Updated: 2014-08-01 09:19
By Zhang Chongfang ( China Daily Africa)

Local residents and African traders who reside in South China have many reasons to work together

Relations between China and Africa have been elevated to a new height since the establishment of the China-Africa Cooperation Forum in 2000. In the past decade, China's demand for raw materials and Africa's increasing need for industrial products pushed China-Africa trade in 2013 to $210.2 billion, 21 fold that of 2001.

Due to geographical factors and the degree of openness, Guangzhou, capital of South China's Guangdong province, has become the most popular Chinese city with African merchants and settlers. With more African businesspeople moving there, they have formed their own communities. Many African college graduates and successful African businesspeople work and take part in African chambers of commerce and companies in China.

More than 20,000 Africans living in Guangzhou have stayed more than six months, according to a report published by the Guangzhou Academy of Social Sciences in 2011. But that number is actually much higher - up to 200,000. Many Africans use short-term tourist visas to enter Guangzhou and then stay past the expiration date. They gather near Yuexiu district and Sanyuanli, which locals have dubbed "Chocolate City" and "Guangzhou Brooklyn". Yiwu city in Zhejiang province ranks second in terms of the number of African residents and associations.

Many Chinese people think that only poor Africans come to China to make a living in the retail business. However, that view is neither objective nor fair. According to the China International Chamber of Commerce, more than 44 percent of African businesspeople in China have a good education, and many of them were employees of institutions and government departments, teachers, police, and even university lecturers back home. But their salary in Africa was not high enough to provide a good life. Some college graduates soon find that they make more money in retail, especially those in the import and export trade.

Using financial and business knowledge gained through education, many in Guangzhou have set up large organizations such as the Mali Africa Trade Center, the Nigerian commercial, agricultural, industrial and handicraft associations, and the Algerian Chamber of Commerce.

The main goal of African merchants and business organizations in China is to sell Chinese goods to the domestic market in Africa. Working with Chinese enterprises and institutions, they have created trade routes to Africa.

African businesspeople in China have a very complex social support network. Because of language and cultural differences with Chinese people, they rely more on the support of fellow countrymen in chambers of commerce and expat associations. This meshes strongly with their traditions and desire to maintain their own culture.

African traders often exchange information at meetings of their chambers of commerce. Once groups from Africa make purchases in Chinese cities, they often are introduced to other Africans.

Once they learn about the market and meet others in the community, they then share business information with the Africans who come afterward. In addition to providing procurement information, the African chambers of commerce help individuals resolve business problems.

African business groups help African companies and businesspeople open trade companies in China and get more comprehensive sources of information, so that the latest information corresponds with the actual demand in Africa. After doing business a few times, the associations form closer working relationships with trade companies.

In many clothing and electronics markets in Guangzhou, Chinese businesspeople are happy to work with them.

Yet, because African immigrants and local Chinese people have many language and cultural barriers, many media outlets in recent years have called for more standardization and transparency in African businesses in Guangzhou in order to dispel the Chinese community's doubts about their trade activities in China.

Since Guangzhou has not set up agencies to oversee African businesses, if there are disputes over trade issues, they resolve the problem within their own associations. They think that if they let Chinese get involved, it will complicate things because of different cultures and business practices. Cultural differences take time to shrink, and both sides need to show understanding during their exchanges.

Meanwhile, Chinese people, especially people in Guangzhou, also should be aware that African traders bring many technical and financial resources to support Chinese manufacturing. If cultural differences forced African businesspeople to move to low-end manufacturing in Southeast Asia, it would have a tremendous impact on southern China's manufacturing economy.

The author is a researcher at Guangdong Academy of Social Sciences.

(China Daily Africa Weekly 08/01/2014 page11)