A private equity investor from China, Wang Qi, last week said the current encroachment into Africa by Chinese investors is causing unnecessary unrest.
Qi, who is a Managing Partner in one of China’s largest private equity firms ÔÇô The Development Principles Group, said he is wondering why there is such euphoria with regard to China’s affinity towards Africa.
“My statistics may be lagged, but figures show that in 2006 China’s investment into Africa totaled 3%. This clearly shows that we are not invading Africa,” he said. He said his country’s major trading partners remain as the European Union and the United States of America.
“Africa does not even fall into the top 10 investment destinations of China,” he told the delegates of the just ended Africa Venture Capital Association (AVCA). He revealed that of his country’s investment into Africa, Angola and South Africa have received the largest share, with the contested Sudan trailing in the third position.
Sudan’s investment has been criticized by the international community, which says that China’s disregard for calls of an improved humanitarian situation in that country smacks of irresponsibility. Wi said so far, Africa has shown greater import appetite for textile and electronic equipment. However, he encouraged his private equity counterparts to be more adventurers and explore opportunities even in China.
“China is in a transformation stage and today we are seeing the government privatizing a lot of entities and that gives private equity players a better platform to perform in that market,” he said.
He added that Africa has, in many respects, numerous competitive and comparative advantages over China.
“I have two surprises to confess. One is that when I came to this conference, I didn’t expect to see so many experienced professionals and, secondly, this is a well organized conference,” he said to thunderous applause.
Wi said Private Equity is a new phenomenon in China and they have largely hinged on the West for guidance, imploring more African players to claim a stake in the field. He added that with vast amounts of land, Africa is in a better position to feed the world, warning that his firm is looking into Africa to set up and take the opportunity.
“Right now there is greater demand for pork in China and there is a shortage of supply. The problem is compounded by the fact that China does not have available land and that gives Africa the biggest opportunity to be the main exporters,” he noted.