Local customs key to invest in Africa

By Lu Chang (China Daily)
Updated: 2010-07-27 16:56
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Local customs key to invest in Africa
Ruan Xiaoming 

Editor's note: Ruan Xiaoming, the 44-year-old founder of Gemsy Sewing Machine Co from Zhejiang province in eastern China, has been doing business with Africa for 20 years. He said Chinese companies should adopt a collaborative "win-win" mindset, rather than just dig big barrels of gold.

Ruan, who is also the vice-president of the China-Africa Business Council, said some Chinese business people are too busy seeking wealth to care for the local people.

"Actually to help African people is to help ourselves. It is the only way for us to develop in a long term," Ruan said.

Ruan recently shared his experience of doing business with Africa with Lu Chang.

Q: Many Chinese companies go to Africa for higher returns. What do you think?

A: Africa is not only a place full of resources such as coal mines, forests and petrol, but it's also a market that's becoming more and more important to China. This can be seen from the growing number of Chinese living in Africa.

But it doesn't mean Africa is a place where everybody can get rich overnight, because it is still a continent under development and has a long way to go.

Only those companies willing to be involved into the process of communication with the locals can do really well.

Q: What attitudes do Africans hold for Chinese doing business in Africa?

A: Some Africans hold a positive attitude, but others don't.

When Africans see some Chinese from big companies living in villas and driving BMWs or Benzes, they would think this is unfair.

They would think of the Chinese becoming rich from exploiting their minerals while they remain poor. I think that is one reason some Chinese companies find hard to fit into the market. They like to show off their wealth.

Q: Has the Chinese image changed over the past 20 years?

A: Yes. In the old days, few Chinese wanted to go to Africa because no one truly knew about it. They thought it was very poor and like a desert.

At that time, it was very easy for us to get visas to African countries because Chinese were very welcome to do business there.

Things are different now. As Africa is being reported by the media as a golden place rich in resources, many Chinese want to set their foot on it, including entrepreneurs, former government officials, and individuals.

But not all of them respect the rules and regulations in African countries, and this has caused many problems in immigration and exploration.

Some countries in Africa such as Algeria have even tightened visa restrictions for Chinese, and it is not fair.

Companies with good reputation shouldn't pay for what other bad companies or individuals did.

Q: What do you suggest for companies that are just entering the African market?

A: I think the first thing to do is to learn the local customs and regulations.This is the way in which Chinese companies can fit in.

The trend is that companies that don't know the local regulations and culture are no longer welcome.

So to put the cross-cultural insights into business is very essential for companies to develop in a long term.

In addition, Chinese companies should build their corporate image and work on their brands, and that can also help to build Chinese image in Africa.

Q: Are there any conflicts between the local people and Chinese?

A: Yes, there are. Like I said, some Chinese like to show off their wealth. The locals used to kidnap Americans and Europeans, but now they are targeting the Chinese.