The role and behaviour of Chinese agricultural enterprises in sub-Saharan Africa : case studies of Mozambique and the Democratic Republic of Congo

Asanzi Mbeyata, Philippe (2013-12)

Thesis (PhD)--Stellenbosch University, 2013.

Thesis

ENGLISH ABSTRACT: This study aims to understand the motivations underlying the activities of Chinese agricultural enterprises operating on the African continent as well as the way in which institutional contexts – the physical and legal environments – shape their behaviours and/or modes of entry into local industries. Understanding the strategic motives of Chinese agricultural enterprises operating in Africa as well as the extent to which they implement those motives on the ground and the way in which they respond to local laws is crucial for assessing the medium- to long-term impacts of their activities on the welfare of African populations and forests. This dissertation relies on Dunning‟s eclectic paradigm to understand the motivations informing the activities of Chinese agricultural enterprises as well as on new institutional theory to study the behaviours and/or modes of entry of Chinese agricultural enterprises into local industries. This research is based on two case studies: Mozambique and the Democratic Republic of Congo. As far as data collection is concerned, it relied on secondary sources of data such as scholarly articles and books; official documents and legislation; and newspaper articles. This study also drew on primary sources of data, which consisted of documents obtained during the fieldwork such as contracts between Chinese agricultural enterprises and African governments, official documents from Chinese agricultural enterprises as well as semi-structured interviews. Thirty-two semi-structured interviews were conducted with various stakeholders – including managers of Chinese agricultural enterprises, employees of these enterprises, farmers, officials from ministries of agriculture and researchers – in Mozambique and the DRC between April to June 2011. The data collected were analysed with the help of the qualitative analysis software: atlas.ti. The preliminary results collected and analysed in this study suggest that the motivations of Chinese agricultural enterprises operating in Mozambique and the DRC are: 1) to acquire farmlands in order to grow food crops and sell them mainly in local markets; 2) to supply agricultural commodities – cash and food crops – for Chinese markets; and 3) to provide agricultural aid by introducing new varieties of crops imported from China and offering training to farmers, students and technicians. However, the provision of agricultural aid is a secondary motivation of Chinese agricultural enterprises. The motivations informing the activities of Chinese agricultural enterprises operating in Mozambique and the DRC are globally consistent with China‟s foreign policy as these enterprises primarily aim to better position themselves in local markets and to access agricultural commodities for the benefit of Chinese markets. Furthermore, the preliminary results of this study also indicate that the institutional contexts in Mozambique and the DRC appear to affect the behaviours and/or modes of entry of Chinese agricultural enterprises into local industries. As such, the poor provision of infrastructure in rural areas appears to delay further investments by Chinese agricultural enterprises. Also, the complex process of gaining access to land and the weak regulatory capacity in the monitoring and implementation of the land laws appear to hinder investments by Chinese agricultural enterprises and in some instances lead to the cancellation of investments. In the specific case of the DRC, the weak enforcement of land titles appears to discourage further investments. The unfavourable institutional context depicted above has prompted Chinese agricultural enterprises operating in the DRC to adopt new models of business revolving around less risky or smaller agricultural projects.

AFRIKAANSE OPSOMMING: Hierdie studie ontleed die motiewe van Chinese landbou-ondernemings werksaam op die Afrika-vasteland, asook hoe die institusionele konteks, te wete die fisiese en wetlike raamwerke, sulke ondernemings se werkverrigtinge en/of toetreewyses tot plaaslike industrieë beïnvloed. 'n Begrip van wat die strategiese motiewe van Chinese landbou-ondernemings is, hoe hulle daardie motiewe op voetsoolvlak implementeer, en hoe hulle aan landswette gehoor gee, is noodsaaklik om die middel- tot lang-termyn impakte wat die ondernemings op die welstand van Afrika bevolkinge en op woudgebiede het, te peil. Hierdie studie maak gebruik van Dunning se eklektiese paradigma om Chinese landbou-ondernemings se motiewe te ontleed. Dit pas ook die nieu-institusionele teorie toe om die werksaamhede en marktoetredes van die ondernemings na te spoor. Die navorsing is op twee gevallestudies gebaseer: Mosambiek en die Demokratiese Republiek van die Kongo (DRK). Dit het van sekondêre bronne soos vakwetenskaplike referate en boeke; amptelike dokumentasie en wetsakte; en persartikels gebruik gemaak. Die studie het ook primêre databronne gebruik. Laasgenoemde bestaan uit dokumentasie wat deur die loop van die veldnavorsing ingesamel is, onder meer kontrakte tussen Chinese landbou-ondernemings en Afrika staatslui; amptelike dokumentasie van Chinese landbou-ondernemings; en semi-gestruktureerde onderhoude. Daar is met verskeie belangegroepe in Mosambiek en die DRK - soos die bestuurders van Chinese landbou-ondernemings en hul werknemers, boere, landbou-amptenare en navorsers – onderhoude gevoer. In geheel is 32 semi-gestruktureerde onderhoude in die periode April – Junie 2011 gevoer. Die data is met behulp van die kwalitatiewe ontledingsprogrammatuur atlas.ti ontleed. Die voorlopige bevindinge en ontledings stel voor dat die volgende motiewe die werksaamhede van Chinese landbou-ondernemings in Mosambiek en die DRK bepaal: 1) om landerye te bekom om sodoende kos aan te kweek en dit veral aan plaaslike markte te verkoop; 2) om landbouware, te wete kontant en kos, aan Chinese markte te voorsien; 3) om hulpverlening te verskaf deur die bekendstelling van nuwe tipes gewasse uit China, en deur die opleiding van boere, studente en tegnici. Die verskaffing van hulpverlening in die landbou bedryf is egter van sekondêre belang vir Chinese landbou-ondernemings. Die motiewe van Chinese landbou-ondernemings werksaam in Mosambiek en die DRK strook met China se oorhoofse buitelandse beleid omdat hierdie ondernemings primêr daarop uit is om hulself beter in plaaslike markte te posisioneer en om tot die voordeel van Chinese markte landbouware te bekom. Voorts, die voorlopige bevindinge dui ook aan dat die institusionele kontekste in Mosambiek en die DRK die werksaamhede en/of die toetrede van Chinese landbou-ondernemings in plaaslike industrieë beïnvloed. Swak infrastruktuur in landelike gebiede blyk meer beleggings deur Chinese landbou-ondernemings te striem. Die ingewikkelde proses om grond te bekom en gebrekkigheid in die regulering, monitering en implementering van landbouwette blyk ook Chinese beleggings te kortwiek, en in sommige gevalle lei dit tot die opskorting van beleggings. In die geval van die DRK, wil dit voorkom asof gebrekkige afdwinging van grondaktes verdere belegging ontmoedig. Die ongunstige institutionele konteks wat hier geskets is, het Chinese landbou-ondernemings werksaam in die DRK aangemoedig om nuwe sakemodelle toe te pas, wat belegging in kleiner landbou projekte of met minder risiko's, beteken.

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