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Comparing American and Chinese Business in Africa
Comparing American and Chinese Business in Africa
Comparing American and Chinese Business in Africa
market share in Africa, making it difficult and sometimes impossible for comparable Africanmade products to compete. This has put enormous pressure on African manufactured goods such
as textiles and consumer items. Finally, infrastructure projects in Africa built by Chinese
companies usually come with a component of Chinese labor. African labor unions, civil society
organizations, and some governments are beginning to question the percentage of the labor force
that is filled by Chinese nationals.
Recommendations for the United States
U.S. companies must engage more effectively in Africa simply by giving a higher priority
to the continent. Many large American companies such as Boeing, Proctor and Gamble, General
Electric, and a few small and medium sized companies are engaged. Too many U.S. companies,
especially small and medium sized ones, do not, however, take Africa seriously. Senior U.S.
officials need to devote more time in support of American trade and investment in Africa. U.S.
embassies in those African countries that do not have a U.S. Department of Commerce Foreign
Commercial Service presence need to give a higher priority to the support of American business
interests.
The U.S. government does not provide enough financing, especially as compared to
China, in support of U.S. exports. The U.S. Export Import Bank needs to provide significantly
more financing for sales in Africa if there is any hope of competing with China. The U.S.
Overseas Private Investment Corporation should receive additional funding for providing
political risk insurance to American investors in Africa.
Since China joined the World Trade Organization, the United States has submitted 19
dispute cases against China and won every complaint that has been decided so far. (China has
submitted nine cases against the United States.) The United States needs to sustain this
aggressive approach.
Finally, the Corporate Council on Africa has a long list of recommendations for taking
concrete actions to engage more effectively in Africa. It is a list worthy of consideration.
Recommendations for Africa
For its part, Africa needs to move forward smartly with implementation of its Continental
Free Trade Area. This will give it considerably more leverage and increase intra-African trade.
The African countries need to do a better job of developing continent-wide (or at least regional)
trade, investment, worker safety, environmental, and business guidelines and standards for
interacting with all countries outside Africa. If this cannot be accomplished at the level of the
African Union, then it should be done by regional organizations such as Common Market for
Eastern and Southern Africa, Economic Community for West African States, East African
Community, and Southern African Development Community. Finally, those African countries
that are hobbled by severe corruption must reverse the practice or, at least, understand they are
doomed to significant economic underperformance.