It’s a match made in business heaven: Chinese technology companies hungry for expansion are diving into the less-developed African continent, where several countries are targeting double-digit economic growth.
IginioGagliardone, a lecturer in media studies at the University of Witwatersrand in South Africa, told CNBC via telephone that the Middle Kingdom’s expansion into Africa has been particularly pronounced over the past four to five years.
“China is everywhere,” Gagliardone said, though he noted that its presence was stronger in certain markets.
For example, Gagliardone explained that China was “definitely the only player” in Ethiopia, with Chinese investment in the country’s technology sector totaling $3 billion as of 2012.
But, he added that China was making its presence felt not just in East Africa, but also as far north as Egypt and Morocco and as far south as South Africa.
According to analysts CNBC spoke to, success in Africa boiled down to cost, with Chinese companies offering cheaper alternatives to their U.S. and European competitors. Gagliardone also said that African companies welcome the Chinese “no questions asked” style of doing business.
The China-Africa tech story began two decades ago, with the expansion of Chinese telecommunications giant ZTE, followed by Huawei, which provides similar services.
Tim Steinecke, an analyst at management consultancy Xynteo, wrote to CNBC via e-mail that both multinationals helped lay Africa’s telecommunications infrastructure, and also worked with local African companies, research institutions and governments.
Others pointed to the innovation Chinese companies have brought to Africa. In a report published in June, consulting firm McKinsey said that “Nearly half of Chinese firms in Africa have introduced a new product or service to the local market, and more than one-third have introduced a new technology.”
Source: CNBC
