Aquino, Paulo H.

BSE 4A

IBT Case Analysis 2: China in Africa

I. Case Summary
Despite conflicting colonial, political, and economic interests,
incompetent and corrupt local leadership, war, starvation, and illness, chronic
shortages of resources, infrastructure, and political, economic, and social will,
many international businesses have been conducting business in Africa for
many years. European countries work to promote and protect their economic
interests across Africa. China, the world's second largest economy, has, on
the other hand, penetrated African territory. China's economy has grown as a
result of a combination of government action and economic incentives to
attract private investment. They operate in Africa by providing financing for
infrastructure projects, which are managed by Chinese corporations. Africa's
natural resources, such as oil, diamonds, minerals, commodities, and even
cocoa beans, are used to secure the loan.
This business is helpful to both nations since China has expanded its
commercial regions and Africa has developed its infrastructure and economy.
They may also learn about Chinese business strategies and development
history. Even if certain concerns arise, China will continue to be a major
investor in Africa for the foreseeable future.

II. Case Problem

How can African governments expand their economies and improve

their industrial activities without China exploiting them in terms of a harsh
regime to a business and underemployment of local workers? And Africa's
challenges in the status quo with China.
III. Case Facts
 Africa is plagued by a continued combination of factors, including
competing colonial political and economic interests; poor and corrupt
local leadership; war, famine, and disease; and a chronic shortage of
resources, infrastructure, and political, economic, and social will.
 The continent Africa generates a lot of interest on both the corporate
and humanitarian levels, as well as from other countries.
 Trade between the African continent and China reached $106.8 billion
in 2008, and over the past decade.
 Africa has caught the interest of the second largest economy which is
China.
 China has entered into arrangements with resource-rich countries in
Africa for a total of nearly $14 billion in resource deals alone.
 Over the past few years, China has become one of Africa´s important
partners for trade and economic cooperation.

IV. Alternative Courses of Action

Many dangerous and uncommon illnesses have caused damage on
Africa. Because China is known for its medicinal products and methods,
Africa might request that China provide health care services or conduct joint
research to combat the diseases that afflict their countries in exchange for oil
reserves or natural resources. Africa can also request agricultural items from
China, such as rice and other food products, to help alleviate food scarcity
and combat the rapid spread of hunger in their country.
In order to address African countries' underemployment problems, their
governments must invest in ways that emphasize economic growth while also
providing jobs and opportunities for their citizens. They must be stringent in
permitting foreign corporations to import their own people into the country, as
this deprives Africans of the opportunity to improve their own life. They must
also impose a higher tax rate on corporations that profit from their natural
 resources, allowing them to divert funds to other government-sponsored
projects.

V. Evaluation of Alternatives and Solution to the Problem

For many years, Africa and China have had a positive trading
connection. China gains far more from this cooperation than Africa does.
Africa contains oil, raw minerals, and commodity resources. As a result, Africa
should take steps to address this problem in order to address the injustice
that they are facing. Stop doing business in the country as potential investors
may be put off by doing business with an oppressive regime.

VI. Recommendation
China is helping to develop Africa in return for resources that they use to
further build their companies. They make agreements with governments,
whether they are oppressive regimes or not. They should need to find a
proper middle ground between the two to ensure that the business is
benefiting the two countries. Because China is mainly care about gaining a
foothold in the nation and using it to expand their resources.

VII. Conclusion
Many commonly held notions about how aid should be given are
challenged by Chinese export credit in Africa. The example of openness raises
two fundamental ethical issues, which are discussed here: the ethical value of
transparency itself, and whether these ideals may be applied across cultural
boundaries. There is a strong case to be made that these projects should be
viewed within a specific cultural context and judged solely on the good they
produce, a case that would support the Chinese government's current investment
strategies.