Chinese private firms in Africa make progress on social responsibility

A recent survey conducted by Chinese researchers found that Chinese private enterprises in Africa, though not fully motivated of fulfilling corporate social responsibility, have made tremendous progress, and to some extent beating their Western counterparts.

The survey on corporate social responsibility (CSR) on 22 Chinese private enterprises, which randomly picked 100 African individuals, was carried out by Professor Liu Qinghai and her colleagues from the Institute of African Studies of Zhejiang Normal University in Senegal and Nigeria between November 2011 and July 2012.

Presenting the findings to more than 40 scholars from China and across Africa at the China-Africa Symposium held in the capital of Zimbabwe Wednesday, Liu said Chinese enterprises had made notable progress in that area by recruiting more local people and improving conditions of service of staff.

The average salary paid by Chinese private businesses is not very high, but still higher, and substantially higher in some cases, than the minimum wage required by the law of host countries, the survey showed.

Only a handful of companies paid employees lower than the minimum wage, but all raised wages after intervention of labor authorities, Liu said.

More than half of the African employees hired by private Chinese firms rate working conditions as good, only 17 percent consider they work in poor working conditions.

An overwhelmingly 89 percent of the African interviewees said they see progress being made by Chinese firms to better fulfill social responsibilities.

"It is obvious that in the eyes of Africans, Chinese enterprises do not register a good image (barely adequate). but neither do they look too bad," Liu said.

According to the surveys, African interviewees rated Chinese enterprises 60.10 points (out of a score of 100 points) in the fulfillment of CSR, compared to 56.38 points of western companies.

Chinese enterprises, despite some deficiencies, were found to be performing much better than their Western counterparts as they brought economic benefits to African countries, the African interviewees said.

China-Africa relations developed to new highs after the Forum on China Africa Cooperation (FOCAC) was established by Chinese and African leaders at their inaugural summit in 2000 to chart a new type of strategic partnership.

Bilateral trade surged, foreign direct investment grew, and cooperation in health, agriculture, and many other fields achieved breakthroughs.

As of 2012, China's direct investment flow towards Africa had reached 2.9 billion U.S. dollars, with an investment reserve of 19. 2 billion U.S. dollars. Private sector accounts for a great majority of this investment rush to Africa.

Private telecom giant Huawei, for example, has become the largest supplier of wireless technology CDMA products in Africa with sales in Africa surpassing 1 billion U.S. dollars.

In another survey on investment intention polling Chinese firms originated from Jinhua city that invested in Africa, Liu found that 41 percent of the private companies invested in the catering industry, 33 percent in the manufacturing sector, 13 percent in the household and infrastructure combined and 10 percent in healthcare.

She also found out that most Chinese enterprises with intentions to invest in Africa were facing difficulties in adapting to the business environment in Africa.

According to the survey, investment in agriculture, education, finance and entertainment industry in Africa may also face many unexpected challenges and these areas, with a few exceptions, were probably not reasonable investment targets for Chinese investors.

Chinese investors were advised to be cautious if they want to invest in the real estate industry while investment in manufacturing was a viable option.

The survey also found out that investing in Africa was viable as there was no surveyed company operating at a loss.

"It demonstrates that it is worthwhile and promising to invest in Africa," she said.