Institute of Development Studies

China and Development Seminar 'In it for the Long Term? Governance and Learning Among Chinese Investors in Zambia's Copper Sector'

• Dates: 21 May 2009
• Time: 13.00 - 14.00
• Location: IDS room 120

The IDS China and Development Seminars are designed as a Forum to bring together scholars and other experts specialising on China with those in the field of development.  Seminars will provide opportunities to explore development debates, policies and politics within China, and how these relate to debate and practice within the international development field.

Speaker: Dan Hugland, Department of Economics and International Development, University of Bath 

Abstract:
The literature on Chinese economic engagement with Africa often presents Chinese investment as shaped by Beijing’s long-term foreign policy interests, including resource security and diplomatic alliance-building. In contrast this article argues that various governance characteristics of Chinese state-owned enterprises (SOEs) in fact may serve to undermine their longer-term sustainability, from the perspective of Chinese shareholders as well as local communities. It contributes to the literature by empirically exploring this proposition, with reference to a Chinese SOE operating in Zambia’s mining sector, and by examining two sets of corporate governance characteristics of Chinese SOEs more generally: investors’ relationships with the Chinese state; and firm-level strategy, structure and norms. The article finds that these governance characteristics lead to short-term strategies, including excessive cost-cutting and segregated management practices. These short-term strategies undermine firms’ long-term operational efficiencies and limit their incentives and abilities to address environmental and social concerns of local actors, prompting questions about the role that Chinese investment can play in Africa’s longer-term development.

All welcome.