The China Quarterly

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The China Quarterly (2009), 199:627-646 Cambridge University Press
Copyright © The China Quarterly 2009
doi:10.1017/S0305741009990130

Research Article

In It for the Long Term? Governance and Learning among Chinese Investors in Zambia's Copper Sector*


Dan Haglund

Article author query
haglund d [Google Scholar]

Abstract

The literature on Chinese economic engagement with Africa reflects widely-held views that Chinese investment is strategic, politically motivated and therefore more stable and long-term than “Western” foreign capital. In contrast this article argues that various factors underpinning the governance of Chinese state-owned enterprises (SOEs) in fact serve to promote short-term strategies. It contributes to the literature by empirically exploring this proposition through a case study of a Chinese SOE operating in Zambia's mining sector, and by examining two sets of corporate governance characteristics of Chinese SOEs: 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 reduce the incentives as well as ability of investors to address local environmental and social concerns, thus questioning the contribution of Chinese investment to Africa's long-term development.

Dan Haglund is currently completing a doctorate in international development from the University of Bath. His main research interests include the political economy of business regulation, organizational learning and south–south foreign direct investment.

Footnotes

* This article draws on primary research from five months of PhD field work carried out in Zambia during 2007.