Impact of China - Africa Investment Relations: The Case of Zambia
"Chinese investments in Zambia are primarily resource seeking and have been concentrated in the mining sector. There are investments in construction, trading manufacturing sectors too. The growth of these investments has been steady over the year and indications are that they are likely to remain that way. Most of the Chinese firms operating in Zambia are state owned and/or are strongly supported by the Chinese state, which advantages them over other competitors. In Zambia, this has been buttressed by the opening of a Chinese bank to serve their firms. The Chinese businesses do not operate like conventional profit maximizing firms, often willing to provide concessions in order to gain access to markets. For some the practices include bidding at very low prices, settling for low profit margins, sourcing cheap inputs from China, and using fairly skilled Chinese workers. In the light of these findings, recommendations are suggested with regard to: checking the risks to economic diversification; monitoring the working conditions in Chinese firm, managing the political ramification of investments, maximizing linkages with local suppliers, and protecting indigenous small scale businesses."