China Tightens Purse Strings in Guinea and Other African Nations
China’s approach to securing minerals in Africa has been to sign agreements to build huge projects in exchange for minerals.But that formulation has proved problematic in an economic downturn. African governments are now realizing that these deals are in essence loans against future revenue, and falling prices could leave them saddled with giant piles of debt.
China, Inc. is starting to realize that the road to globalization for Chinese enterprises does not begin with Europe or North America, but with emerging and developing markets like the nations of Africa.
They are also starting to understand that winning friends, influencing people, and building markets demands more than dumping a few fat wads of cash on the natives. The problem is that few of these companies – if any – know what to do to arrest the tattering of their image in their most promising markets.