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How China and Africa Together can (and will) Leapfrog the Rest of the World

· China-based,Events
What is China Africa Stories?

On 19 May, policy makers, business people, academics and entrepreneurs from China, Africa and working between came together for the first ever China-Africa Stories as part of Beijing's “Kente & Silk Africa Week”, co-hosted by the Global Shapers Community SH II Hub, PUASA PKU, CAT-I, and PKU Youth Think Tank.

The conference aimed to break away from away from traditional gatherings on the topic and more deeply explore the changing nature of China and Africa's relationship from a human-based perspective. At the conference, CAT-I hosted a panel on China Africa's leapfrogging | COLLABORATIVE TECH OPPORTUNITIES.

The day's keynotes from Tian Wei (World Insight at CGTV), Leslie Maasdorp (VP New Development Bank) and Hannah Ryder (CEO and Founder, Development Reimagined) set the context for an exciting discussion exploring stories of China and Africa's tech relations.

Tian opened the day on a positive note, reflecting on the first international state visit of Zimbabwe's new president, Emmerson Mnangagwa. "He came as a listener", to bring back lessons to Zimbabwe. This is especially prevalent as Cloudwalk, a Chinese facial recognition startup, has just signed a strategic cooperation framework with the Zimbabwean government to roll out mass facial recognition across the country.

Hannah Ryder, centred her keynote speech around FOCAC (Forum on China Africa Collaboration). FOCAC, in it’s 18th year, is entering adulthood as it convenes later this year in Fall. “As an adult, you should be able to understand issues, and you have to get your own path. There are lots of responsibilities and the expectation is that you can cope with that,” the relationship will become more complex, transparent, regional and specific, with technology taking the forefront. Leslie, who also joined the CAT-I panel shared this sentiment.

The Panel

Chinese and African companies have already made significant investments within the technology space collaboratively, such as the Alibaba’s eFounders Program, and Naspers’ 33% ownership of Tencent. However, there has been little exchange at the peer-to-peer level and time will prove the success of these collaborations. On one hand, Africa continues to face significant digital infrastructure challenges. On the other hand, as demonstrated by the success of the Kenyan mobile money giant: M-Pesa, technology provides an opportunity for Africa to innovate and efficiently circumvent these challenges.

The panel aimed to explore:

  • What role is tech playing in Africa’s development story?

  • How is China shaping Africa’s digital revolution and use of technology?

  • What can African tech teach China?

Bringing together experts across finance, media, technology and academics:

  • Eric Olander, Founder, China Africa Podcast

  • Leslie Maasdorp, VP & CFO, New Development Bank

  • Patricia Dalle, PhD candidate in Artificial Intelligence, Beihang University & Co-Founder, eva-corporate

  • David Gao, CEO, One Belt Technology

  • Moderated by CAT-I's own James da Costa, Head of Partnerships

The panel opened as each speaker cast back on their own China Africa technology story. Leslie, coming from South Africa is building the "BRICS" New Development Bank from its new HQ in Shanghai, Eric who currently works in media, but has built companies across US, Africa, and China, Patricia who has travelled from Cameroon to Beijing for her PhD in Artificial intelligence, and David who travels the other way along One Belt One Road to support Chinese technology SMEs out of China.

"Using a Huawei 3G dongle, that connected to a Huawei network, that connected to Huawei routers, that no doubt connected to Huawei data lines, that connected out to the internet."

From a personal perspective, Eric has seen huge changes over the past 20 years in China’s involvement in Africa, from the increase in number of Chinese restaurants in the Congo or Chinese technology providing the base infrastructure for connectivity across the continent. Olander joked that perhaps Huawei should win the Nobel Peace Prize for its work in this field. When Olander lived in DRC, he reminisces on "Using a Huawei 3G dongle, that connected to a Huawei network, that connected to Huawei routers, that no doubt connected to Huawei data lines, that connected out to the internet." This combined with Chinese mobile penetration means both frontend and backend digital infrastructure. What are the implications of Chinese tech enabling (and therefore controlling) connectivity across Africa?

What are the main tech verticals that you see the most promise of China-Africa relations?

On this, the panel focused on a few things: mobile technology, energy smart infrastructure, innovative distribution technologies and exponential future technologies. Because of barriers to traditional modes of distribution whether physical or virtual, from pothole ridden roads to constant power-blackouts, Africans have found innovative distribution.

Maasdoorp believes we are now beginning to see a new wave of innovation and entrepreneurship, building on a relationship that has been traditionally between governments and around infrastructure. One such example Zipline in Rwanda, which uses drones to deliver vaccines and medical devices to remote locations, as Rwanda now seeks to become a hub for international drone innovation. Much of the innovation around drones was pioneered by DJI and other drone companies in China. Compared to the rest of East Africa, Rwanda’s national government is well known for being extremely progressive in supporting innovation.

Exploring financial inclusion and access to bank accounts, comparing China's mobile payments ecosystem and the origins of mobile money with M-Pesa in Kenya. Olander, sees an opportunity for African companies to learn from China and the barriers that prevented the likes of M-Pesa from becoming the global mobile money giant it should have become. M-Pesa had the perfect storm of forward-thinking regulators and a telecom willing to sacrifice (immediate) profit for progress.

Dalle believes the biggest opportunities in the short term will remain in mobile tech, and and bringing people online through affordable smartphones. At the same time, there also needs to be an increased number of local startups by re-using open-source codes and making apps for the local contexts in Africa.

Many Chinese investors are reluctant to invest in Africa

Olander believes neither that Chinese investors will begin to invest in African start-ups in the short term, nor will they be successful. He cites Silicon Valley as a reference and how even Silicon Valley venture firms have not seen the same success outside of Silicon Valley or US, because they do not understand the local market conditions in the same way vs. where they are based. Until Chinese investors base themselves in Africa, investment will not flow freely to SMEs and Olander does not see this happening soon. In fact, it should and will be local continental capital funding that feeds African start-ups.

At the same time, at an institutional level - Leslie believes Africa will need to begin competing for Chinese capital along the One Belt One Road in a way it never had to before as other countries open up to China.

Recently the Rwandan government announced a fund of 100 million USD for local tech startups. According to Dalle, these are good opportunities for Chinese VC's are hesitant to put their own money to step in. Government funds may be willing to match funds, and Chinese VC's can bring their expertise. As Didi Kuaidi has beaten Uber in China, on the same way it is only through collaboration with local African Techpreneurs that chinese business can really penetrate in Africa

Who is really penetrating the market, who do you think has made the most impact on the continent? Why?

In short, there haven’t been many winning plans from Chinese tech giants yet on the continent, outside of mobile technology. This is often at fault of the tech giant themselves according to Olander, he even wonders if the giants have become "arrogant" in their approach. One such example is the case of the Tencent and MTN partnership to distribute Wechat, where Tencent refused to create a light version of Wechat for several years in Africa. As a result Wechat simply was not an accessible product to users due to a) huge amount of data required to download and b) vast amount of data it consumes. Tencent insisted it was their way or nothing. Another similar example is "Baidu and Orange" who collaborated to launch a low data based web browser across Africa but ultimately failed to gain significant traction, after ineffectively marketing to local populations and not creating a product local users wanted. Additionally Chinese tech giants have never had to compete with the likes of Facebook and Google before; on the continent is where we will likely see this playing out.

Chinese tech companies must adapt to local conditions to be successful on the continent. For this reason, David Gao believes "it is Chinese SMEs who will be successful as they expand internationally". Dalle believes the biggest opportunities in the short term will remain in mobile tech and bringing people online.

Despite the lack of success stories to date, all of the panelists agree this is simply the beginning of a new wave of tech collaboration.

What can China learn from African and vice versa?

Patricia noted that actually many African cultures are similar to Chinese. Both cultures, for example place, high value on family and community. This provides a base for shared learnings and as Olander notes, Africa has been teaching China new ways of doing things for many years, such as mobile money. Additionally, Africa's relatively recent economic development means it can find new ways of doing things because it does not have existing legacy infrastructure in place.

Thinking on 50-year Timelines

On the other side, Leslie believes African governments and companies, can take a leaf out of China's far-sighted policy making and business decisions--not thinking on 5 year timelines but instead “thinking on 50 year timelines”. Simultaneously, Olander issued a brief note of caution surrounding mass implementation of Chinese technology including Chinese style monitoring methodologies in facial recognition and mobile technologies, which can be used for both positive and negative outcomes.

The panel ended on positive tones looking forward to the future as the audience engaged on specific topics such as business building and technology capital flows.

Missed China Africa Stories? Sign up for the next one in September here!

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