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.
