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Agriculture in Africa new hope for private firms(2)

2011-10-10 10:23    Ecns.cn     Web Editor: Wang Fan

Broadening the market

Apart from the principal business of agriculture, Hanhe has launched other projects in Uganda, including a martial arts club to teach kung fu. The company has also done much to introduce Chinese traditional medicine to the country.

Qiu Lijun revealed that they have sent a team to offer traditional physical therapy in Uganda since the very beginning of their agricultural project. Whenever they arrive at a local community the team shows the residents what Chinese traditional medicine is, and not only cooperates with local hospitals and clinics, but also organizes public benefit activities.

Occasionally, the medical team offers free health check-ups and traditional medicine therapies. With time, the people of Uganda have developed a favorable impression of Chinese people, added Qiu.

The investment in such work is very low, but the use of therapies such as acupuncture and cupping cannot be ignored. It helps Chinese enterprises gradually become entrusted culturally, said Qiu, and when trust is there, doing business will be much easier.

However, Qiu said that some Chinese enterprises were damaging the Chinese image because they only regarded short-term interests as important and cared about nothing but money, having a negative effect on the investment environment.

Difficulties for private enterprises

The core business of Hanhe includes high-tech species introduction and breeding; agricultural planting, production and processing; agricultural and veterinary medicine production; and logistics and sales.

According to Qiu, there are about 2,000 Chinese enterprises doing business in Africa, and over 90% of them are private. Usually, they operate independently, without any standard oversight.

During the last China-Africa Agriculture Cooperation Forum in August 2010, many private enterprises recommended themselves to large state-owned enterprises for cooperation. Hanhe also tried to do so, because the government mainly supports state-owned enterprises.

But there are many difficulties involved. To Qiu, most state-owned enterprises share the same problem of a discontinuous aid process and usually end up with a shortage of funds. Private enterprises put economic interests as a top priority, and try to maximize the benefits they get from their projects. If the two kinds of enterprises cooperate with each other, they seldom agree on how to earn money, as state-owned enterprises are usually guided by a mission or obvious purpose, and do not put economic interests first.

Therefore, in order to "go out," private enterprises must have sufficient funds. Hanhe is lucky to be supported by the African Development Fund under the China Development Bank. But for other enterprises, the question remains unanswered.

Chen Deming, China's Minister of Commerce, mentioned in last year's annual meeting that African agriculture may be a field of opportunities for Chinese enterprises. Currently, Chinese businessmen are growing vegetables in almost all African countries.