Magazine article African Business

Ten Thousand Chinese Businesses Active in Africa-McKinsey

Magazine article African Business

Ten Thousand Chinese Businesses Active in Africa-McKinsey

Article excerpt

Up to 10,000 Chinese businesses may be active in Africa, dwarfing previous estimates, according to findings from consultancy firm McKinsey that challenge traditional views of China's engagement with the continent.

In an investigation of eight African countries, detailed in new report "Dance of the Lions and Dragons", researchers found that the number of Chinese-owned firms was between double and nine times the number registered by China's Ministry of Commerce.

Nearly a third of firms polled are involved in manufacturing, while Chinese firms also have a significant presence in services, trade, construction and real estate. Around 90% of the firms are privately owned, a rebuke to the common narrative that many enterprises active in Africa are backed by the Chinese state.

Extrapolating the numbers to the entire continent, McKinsey estimates that some 10,000 enterprises already employ "several million" Africans, given that 89% of employees at the 1,000 businesses polled are from the continent. Two thirds of those businesses offer skills training to their staff, suggesting that Chinese firms are cultivating a long-term interest in Africa.

The report's authors concluded that China's engagement with the continent is a "strong net positive" for Africa's economies, governments and workers. They found that Chinese financial flows to Africa are around 15% larger than official figures suggest when non-traditional flows are included. Some 74% of Chinese firms said that they feel optimistic about their future on the continent. …

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