Chinese Telecom Companies Foray Into Africa

Daouda Cissé

Abstract


China‟s Outward Foreign Direct Investment (OFDI) to Africa has been driven by its
quest for natural resources not only to secure resources for itself but also ensure its
modernisation and urbanisation (Shenkar and Luo, 2004). Like the traditional Chinese
investments‟ sectors in Africa (infrastructure, mining, oil; etc.), the telecommunication
sector also fits into China‟s central government policy rationale to boost Chinese
companies ventures abroad. Beyond this, investments in the telecommunication
sector illustrate a broader case of qualitative changes in China‟s African investments.
Chinese investment‟s pattern in Africa is shifting slightly from an exclusive
engagement in extractive industries to an increasing inclusion of services (finance,
banking and telecommunication) and manufacturing.
The boom of Africa‟s telecom industry, which is today one of the world‟s fastest
growing, the liberalisation of the telecoms sector in many African countries and the
willingness of their respective governments to improve the telecom environment have
attracted more foreign investors. Chinese telecom companies‟ venture into Africa
follows Beijing‟s “go out” strategy that wishes to see Chinese companies (State-
Owned Enterprises (SOEs) at the central or provincial level as well as private
companies) operating overseas. Chinese telecommunication companies‟ presence in
the world market has been favoured by Beijing‟s policies for its companies to enter
new markets, to acquire foreign technology and reinforce China‟s space and satellite
programme (Executive Research Associates, 2009).
The paper explores the political economy of Chinese companies with more focus on
telecommunication companies. It looks at the globalisation of Chinese companies, the
Chinese telecommunication companies‟ – mainly ZTE and Huawei – “go out” strategy
and their presence in Africa.

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DOI: https://doi.org/10.7552/69-0-94

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