China and India: The scramble for business in Africa

India and China have two very different ways of approaching investment in Africa

Throughout Africa - at building sites, on the street, and at ports and airports - the Chinese presence is growing.

Competing for a slice of the wealth along with traditional stakeholders are new ones such as Brazil and South Korea - and India, China's neighbour.

India suffered a humiliating military defeat at the hands of China in 1962 and has been wary of its intentions.

The long-standing border dispute has been a major sticking point for the two countries.

Start Quote

Manoj Gupta of Jindal

Indian companies do the risk assessment in a more systematic manner, whereas the Chinese just jump upon the work and they do it very fast - and they get the result”

End Quote Manoj Gupta Jindal Steel and Power, Mozambique

With demand for resources to fuel both their growing economies rising, the contest between the two giants is playing out in different parts of the world.

The campus of Nairobi University is one such place.

In a corner here, workers from the China Wu Yi company are working to build a futuristic 21-storey tower, complete with lecture halls, for up to 3,000 students and a helipad.

"Once it is finished in two years, this building will be the tallest structure around," says Prof Sa Dequan, head of the university's Chinese language and cultural teaching centre.

Backing from Beijing

China Wu Yi was helped by the Chinese government to gain access to Kenya, but now it is handling 18 projects here.

Not long ago, it completed a section of the eight-lane, 50km Thika Superhighway, described as Kenya's pride.

This kind of push by the Chinese government, say Indians, is helping their neighbour to steal a march on them.

"Indians have been in Kenya and this continent for more than 200 years. Why have they not developed the industry like the Chinese have done in the last 10 to 15 years?" asks Kenyan-born businessman Muljibhai Pindolia, who is of Indian descent.

He says the reason lies with the active involvement of Beijing. "With our own resources, we cannot develop the way those with government support can."

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India's $65bn (£44bn) of trade with Africa is dwarfed by China's $200bn.

Chinese companies are active across the continent with big infrastructure projects, including ports, railways and sports stadiums.

By contrast, Indian initiatives are led by individual companies looking to expand in sectors such as telecoms, agriculture, the automotive industry and education.

"Indian companies do the risk assessment in a more systematic manner whereas the Chinese just jump upon the work and they do it very fast. And they get the result," says Manoj Gupta, head of Indian multinational Jindal Steel and Power in Mozambique.

'Fighting for resources'

With its abundance of coal and new gas finds, Mozambique is attracting global attention.

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"We have China and India fighting for resources in Africa," says economist Joaquim Tobias Dai.

"Civil construction by the Chinese, access to coal by Indians - and now gas. The Chinese want to go for gas, but Indians want to go for gas as well.

"This kind of competition is good for us."

Like China, India organises summits to engage Africa. Deals worth millions have been discussed, but implementation is poor.

"India's story is a private entrepreneurship story," says TCA Ranganathan, chairman of the Export Import Bank of India, which funds Indian companies investing in Africa.

"If they want to go into Africa, I will help them."

Start Quote

Mark Kapchanga

We have seen in Tanzania illegal immigrants from China being deported back. We have seen that in Ghana too”

End Quote Mark Kapchanga Journalist, Nairobi

At one such summit, Ethiopian Industry Minister Tadesse Haile says: "I urge Indian financial institutions to support Indian businesses as other countries like China are doing."

Meanwhile, China insists it is looking at a wholesome, reciprocal relationship.

"We need resources, but we can work together to find more resources. Indian people, Kenyan people and Chinese people can work together," says Prof Sa.

In Nairobi, Xia Lu, of Kenya China Travels and Tours, says: "The number of Chinese tourists coming to Africa is growing by 45% each year."

But the Chinese presence has also raised questions.

"The Chinese come with their own people, leaving the locals in the lurch," a man outside a Nairobi office complains.

Asked about such concerns, Xiong Kaihua, of China Wu Yi, insists his company has hired locals to do the work, although he does not know how other companies behave.

African growth

Yet tensions between Chinese and locals have not gone away.

"We have seen in Tanzania illegal immigrants from China being deported back. We have seen that in Ghana too," says Nairobi journalist Mark Kapchanga, who also writes for Chinese publications.

Workers on a construction project Estimates suggest there are more than a million Chinese working in Africa

Nairobi-based analyst Anil Bhandari says the African pie is too big for anyone to fret about.

"Most African countries are growing at 7% to 9%. Players like India, China, Brazil, European countries have a role to play."

As the debate about what works in Africa goes on, Africans say what matters to them is that they get the best of both worlds in the quest for development, and what outsiders are quibbling over is immaterial.

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