The United States issued a thinly-veiled warning to China to bring into business dealings with African countries in line with the standards set by multinational institutions such as the African Development Bank.
A senior US Treasury official in Lisbon for the annual meetings said there was a “striking contrast” between the deals done by Chinese companies and those done by other investors.
“This includes transparency and strong procurement rules - practices that demonstrate a level playing field for all economic actors,” Scott Morris, deputy assistant secretary for development policy and debt told Emerging Markets.
“It is important for us that sources of foreign investment into Africa including from China demonstrate some of the practices and commitments that we value in the multilateral investment banks.
“For us, it is a matter of making sure that the practices associated with those investments are in line with ensuring they generate maximum benefits for these countries and their citizens.”
His comments came after a year that has seen a dramatic rise in China-Africa trade and investment. Official Chinese trade data suggest that bilateral trade with Africa grew more than 43% in 2010 to $115 billion.
According to US think tank The Heritage Foundation’s China Investment Tracker, sub-Saharan Africa accounted for 14% of overall Chinese investment between 2005 and 2010.
Company executives and Africa analysts said that there were examples were Chinese practices had raised eyebrows on the continent although many said there was evidence that the Chinese had seen the need for reform.
Nonkululeko Nyembeziheta, CEO Arcelor Mittal South Africa, said the one “problematic aspect” of the Chinese model was that it did not necessarily create as much employment locally as countries would like because they tend to export Chinese labour.
“One of the reasons is cultural - the Chinese seem to consider African worker habits a little strange,” she said. “They don’t understand why people want to go home on the weekend and they think it’s quite OK to lock them in and work them 14 hours a day.”
Michal Meidan, China analyst at Eurasia Group, said that the Arab Spring had lighted the issue after Beijing organised an “abrupt” rescue of Chinese executives from Libya.
“Some of the people stuck there are private entrepreneurs more prone to corruption and shoddy practices and you’re bailing these people out constantly and not making them more accountable for what they are doing there,” she said.
Chris Alden, a senior international relations lecturer at the London School of Economics, said China was showing a “stronger sense of risk awareness” that was being translated into greater integration of corporate social responsibility principles.
He cited a joint Norwegian initiative with Uganda Chamber of Business to raise awareness and train up Chinese businesses based in Uganda about Ugandan law and Ugandan labour requirements.
“We see that kind of thing as a response to some of the difficulties they may be experiencing in local environments, products of their own businesses’ conduct and lack of knowledge,” he said.
Earlier this week Emerging Markets reported on a study produced by the UK’s Open University and the University of Cape Town that there were economic gains for African governments who worked with foreign resource companies.