Study unveils surprising findings about Chinese businesses..

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Study unveils surprising findings about Chinese businesses..

Unread post by ኦሽንoc » 08 Nov 2009 12:34

Study unveils surprising findings about Chinese businesses in Ethiopia

Saturday, 07 November 2009
By Hayal Alemayehu


A study conducted on the Africa and China trade and investment relations by the African Economic Research Consortium (AERC) indicated that a number of Chinese businesses operating in Ethiopia are engaged in business and investment ventures they are not licensed for.

“Almost half of the Chinese private firms in the country are not willing to disclose any information about their business engagements while we were unable to reach many of them using their phone numbers registered at the Ethiopian Investment Agency,” Alemayehu Geda (Phd), a professor of Economics at the Addis Ababa University (AAU) and the principal researcher of the study told The Reporter.

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The study, presented at the Addis Ababa Hilton on Monday, indicated that ninety percent of the Chinese companies currently operational in Ethiopia are not willing to establish joint venture with Ethiopian investors and businesses, unlike the other foreign investors from the west or the Middle East.

“Most of the Chinese told us that their business model does not match the business model of Ethiopian investors or business,” Alemayehu said. “The business model or the system of doing business the Chinese firms pursue is penetrating the market with lowest prices and secure the market on sustainable bases than venturing in businesses with a quick, high return which, they say, is the Ethiopian business model.”

Unlike their engagement in other African countries, especially in those nations which have oil and rich mineral resources, ninety percent of the Chinese companies operating in Ethiopia are targeting the domestic market, the study indicate. Sixty percent of these Chinese companies are engaged in the manufacturing sector.

There are currently 121 private Chinese companies operating in Ethiopia though over 800 Chinese projects are registered with the Ethiopian Investment Agency.

The flow of Chinese FDI to sub-Saharan Africa is providing the continent with alternative sources of financial resources to finance its development strategy, according to the concluding remarks of the study. “However, these additional financial resources are not without costs and thus require African authorities to devise strategies individually as well as collectively to seize opportunities arising from these alternatives and confront the potential and possible challenges,” the report suggests.

Source:reporter

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