Through tripartite cooperation, companies find ways to protect their own interests while taking advantage of the complementary aspect of such a collaboration

With an average economic growth exceeding 5 percent per year for more than a decade and a growing population that will provide about a billion new consumers by 2050, Africa is seen as a source of opportunities by many investors and companies worldwide.

Intra-African investments are increasing, led by South African, Kenyan and Nigerian transnational corporations. However, most of the African projects are still financed by non-African countries and financial institutions for development.

In the context of increased global competition in high-growth African countries and areas with abundant natural resources, some Chinese and French companies choose the path of cooperation in order to develop their comparative advantages in the African market, while benefiting from their mutual experience. The holding of a three-day business event called Targeting International Markets with Chinese Partners, from June 16 to 18 in Beijing, is indicative of this trend.

The initiative was launched by UBIFRANCE, the French agency for the development of French companies abroad under the supervision of the Ministry of Foreign Affairs, and the Export-Import Bank of China (China Exim Bank). It aimed to gather 18 French companies and 46 Chinese companies operating in third countries, mainly in Africa, through business-to-business meetings. It was a perfect match for the 50th anniversary of the establishment of diplomatic relations between France and China, and an opportunity for African countries to benefit from the complementarity provided by potential tripartite partnerships.

Common interests

Despite their different approaches in the African market, China and France aspire to a peaceful and prosperous Africa.

During the visit of Chinese President Xi Jinping to France in March 2014, his French counterpart, President Francois Hollande, stressed the importance of mobilizing for the development and growth of a "continent of the future," a vision widely shared by China which became the largest trading partner of Africa in 2009 and a major actor for development in African countries, particularly through the China Exim Bank and the China-Africa Development Fund.

More than just a state bank, China Exim Bank is the main funding channel for Chinese investment in Africa. Chinese firms supported for building projects in Africa are viewed as key partners in the market, not only by local actors, but also by foreign companies. More specifically, their presence brings opportunities to the French companies in areas and countries where the experience and expertise of France are major assets.

During the plenary conference held in the framework of the Targeting International Markets with Chinese Partners, Yu Wen, Assistant General Manager in the Corporate Banking Department of China Exim Bank, precisely stressed that the alliance of French technical know-how and Chinese financial and industrial power in the developing world serves the real needs and common interests of all parties.

Comparative advantages

For his part, Honorary President of the French Council of Investors in Africa (CIAN), Anthony Bouthelier, told ChinAfrica, "China has successfully secured sources of raw materials and oil in Africa while triggering a phenomenon of economic recovery in many African countries, but a lot of Chinese companies have also faced financial difficulties at the beginning of the century, and reservations remain regarding Chinese presence in Africa, despite the win-win cooperation speech."

Given the special relationship between France and francophone Africa, some Chinese companies recognize the value of working in concert with a French company in order to overcome difficulties due to cultural, linguistic and even legal differences.

Through its long experience on the continent, France has developed marketing and management techniques adapted to African countries, while building a close relationship with local governments. The activities of the French company SOCOTEC in Africa also show an expertise that deserves to be highlighted.

SOCOTEC is a world leader in inspection, technical assistance, consulting and training services for the construction, real estate, industry and health sectors. The company has been working in Africa for decades and is especially recognized by insurers and reinsurers as a "technical controller for construction risks in order to obtain the decennial insurance."

The decennial insurance was introduced in France by the Spinetta law in 1978. This mandatory insurance in the field of construction must be taken out by the contractor as soon as the building site opens, in order to cover costs associated with the potential collapse of the construction after completion. It covers a 10-year period after completion of the project.

This concept has been adopted in most francophone African countries for buildings, bridges and dams. The Chinese construction companies wishing to develop their activities in countries such as Cameroon, Togo, Senegal and Algeria should therefore meet specifications taking into account the specificities of French know-how.

According to Eric Ciron, Director of the Sub-Saharan Africa Region in SOCOTEC International, however, few Chinese companies seem informed of the requirement to obtain a decennial insurance in some African countries. "The purpose of my participation [in this three-day event] was particularly to get the message across to Chinese companies that we've met," he told ChinAfrica.

Partners rather than opponents

Among its references, SOCOTEC International has worked with the China State Construction Engineering Corp. (CSCEC) on the project to build the Great Mosque of Algiers, precisely to help the Chinese company obtain a decennial insurance. Thus, the work started in August 2012.

This initiative demonstrates the benefits of tripartite cooperation. While France won a contract from the CSCEC to help the Chinese company fulfill its contractual obligations, the CSCEC can work toward the realization of this colossal project of 109 billion dinars ($1.4 billion) by sending nearly 10,000 Chinese workers to Algiers. Several thousand of Algerians are also working on the site, and Algeria will host the third largest mosque in the Muslim world by 2015.

Telecommunications and transport sectors also give rise to fruitful Sino-French partnerships in Africa. For example, Huawei has become the equipment supplier of the French telecommunications company Orange in several African countries, and the outsourcing contract between the French group Bolloré and the Chinese company CSR Nanjing Puzhen under the project to modernize Cameroonian railway is a success. Hence the Intercity fast train was launched by the Cameroon Railways (a Bolloré Africa Logistics company) on May 5, 2014, in Yaoundé, following the receipt of 40 passenger cars built by CSR Nanjing Puzhen.

All these concrete examples show that Chinese and French companies do not necessarily have to be competitors in Africa. The key is to find a way to protect their own interests while taking advantage of the complementary aspect of a relevant collaboration.