Good morning !
Even as i write, the chinese juggernaut continues to tread where few have dared…in Sub – Saharan Africa.
While we in the US ,Europe and even the BRI (Brazil, India, Russia) continue to debate …to invest or not to invest,…the pace of chinese investments in this part of the world continue at a fast pace.
So what are the chinese investing in?
what is clearly visible is investment in infrastructure projects…roads, railways, bridges etc….and now also in oil and gas (Sudan)
next question is …what do the chinese hope to leverage from these investments?
according to me the following
1. Geo political clout
2. access to sources of un explored and un exploited mineral wealth of this part of the world ,where no one wants to invest !
3. access to hydrocarbon energy sources
4. first mover competitive advantage for chinese consumer goods , technology, pharma companies- and converting this competitive advantage to a comparative advantage for the long term
5. exploiting the huge BOP (Bottom of pyramid) markets in this region, that comprises aspiring consumers who live in a cash driven economy.
Chinese products virtually run the informal “parallel” economies in the sub-saharan region and some of the growth that has been seen in these economies should definitely be attributed to the influx of chinese companies and chinese goods.
the debate is on whether chinese “investments” are good or bad for these markets, but the reality is that these investments have been made with a long term perspective and the chinese are here to stay.
question is that the cat (The sub – saharan markets ) has been belled (chinese investments are here!); who will have the courage of conviction to believe in the potential of the future cash flows from these markets and take the plunge?
isnt africa the final frontier for our investments?