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China in Africa: The Real Story

South Africa or China? Who Will Win Race for Africa's Middle Class?

Deborah Brautigam

I recently came across an article on investing in Africa by South African journalist Thabang Mokopanele:
South African retailers are driving commercial development in Africa. As they expand so does the need for retail and office space in cities such as Lagos, Ghana, Nairobi, Maputo and others. "If you look at Lagos and Ghana the buildings around these cities are old and derelict and were built in the 1960s," Mr Mackintosh said.
What happened to the Chinese? Although a lot of people comment that the Chinese are "everywhere" in the retail sectors in Africa, I see a lot of small-scale Chinese activity and a lot of large-scale South African activity. Look at Arcades, Manda Hill, or another of the new malls cropping up in Lusaka, Zambia, for example. You can get a cappuccino at Mugg and Bean, groceries at Shoprite or more upscale food at Woolworths, appliances at Game, clothes at Truworths or Uzzi, have lunch at Ocean Basket, and did I mention the South African banks: Standard Chartered, FNB, Stanbic, and so on. If all that shopping tires you out, you can take a room at South African-owned Protea Hotel.

A private Chinese company has built a big new hotel in Lusaka: the Golden Bridge (right). But in my recent visit it was not easy to find any prominent reflection of the more upscale Chinese retail sector. Little Chinese shops were scattered here and there. Chinese were selling chickens at the city market, and vegetables at the Tuesday market.  I walked through Kamwala market several times, and found a few Chinese shops, but staffed by Zambians; their Chinese bosses were not on the premises. An upgraded section of the Kamwala market was constructed by the same Chinese firm that built the Golden Bridge in a joint venture with the city of Lusaka, but their tenants seem to be mainly Zambian.

Chinese cities have the fanciest of malls, just as South African cities do. But while the South African companies that invest in Zambia's retail sector come from the prominent side of South African retail, that doesn't seem to be the case for the Chinese. Why not?