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‘China is everywhere’ in Africa’s rising technology industry


Customers sit and use their mobile phones while waiting to board a ferry in Abidjan, Ivory Coast, on August 31, 2015.

Jose Cendon | Bloomberg | Getty Images

Customers sit and use their mobile phones while waiting to board a ferry in Abidjan, Ivory Coast, on August 31, 2015.

It’s a match made in business heaven: Chinese technology companies hungry for expansion are diving into the less-developed African continent, where several countries are targeting double-digit economic growth.

Iginio Gagliardone, a lecturer in media studies at the University of Witwatersrand in South Africa, told CNBC via telephone that the Middle Kingdom’s expansion into Africa has been particularly pronounced over the past four to five years.

“China is everywhere,” Gagliardone said, although he noted that the mainland’s presence was stronger in some markets.

For example, he noted China was “definitely the only player” in Ethiopia, with Chinese investment in the country’s technology sector totaling $3 billion as of 2012.

But he added that China was making its presence felt not just in East Africa generally, but also as far north as Egypt and Morocco and as far south as South Africa.

For Gagliardone, success in Africa boiled down to cost, with Chinese companies offering cheaper alternatives than their U.S. and European competitors. Gagliardone also said that African companies welcome the Chinese “no questions asked” style of doing business.

The China-Africa tech story began two decades ago, with the expansion of Chinese telecommunications giant ZTE, followed by Huawei, which provides similar services.

Tim Steinecke, an analyst with managing consultancy Xynteo, wrote to CNBC via e-mail that both multinationals helped lay Africa’s telecommunications infrastructure, and also worked with local African companies, research institutions and governments.

Others pointed to the innovation Chinese companies have brought to Africa.

In a report published in June, consulting firm McKinsey said that innovation has been key to the success of Chinese companies in Africa. “

“Nearly half of Chinese firms in Africa have introduced a new product or service to the local market, and more than one-third have introduced a new technology,” the report said.

Tecno, a smartphone maker under Hong Kong parent company Transsion Holdings, has embodied Chinese companies’ winning formulas on the continent.

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