Chinese businesses traditionally believe “guanxi” (关系)—building close ties with governments—is key to success, a mindset shaped by China’s own political system. But in Africa, this backfires.
In a rare move, an official Chinese government publication is advising Chinese companies operating in Africa to avoid cozying up to local politicians.
The article, titled “Risk Mitigation Strategies Amid Africa’s Unstable Election Landscape” (非洲国家“选情失控”的避险策略), was published by “Go Global Service Port” (走出去服务港), an official WeChat channel run by the Shanghai Municipal Commission of Commerce.
The piece provides a detailed analysis of Africa’s political risks, including tribal conflicts, economic disparities, and foreign power rivalries (e.g., U.S., France, Russia), and highlights how political instability could disrupt Chinese business operation, citing Niger’s military government scrapping oil agreements and demanding back taxes from a Chinese firm:
- POLITICAL NEUTRALITY: During politically sensitive election periods, companies should follow the principle of “non-intervention, non-statement, and non-alignment.” This means avoiding any actions or statements that could be perceived as showing political bias—such as publicly endorsing candidates, attending campaign events, or making donations that link the company to political groups.
- LOCAL KNOWLEDGE: In nations where tribal politics plays a significant role, it’s important to build long-term trust with tribal leaders through community investments, such as education and healthcare initiatives. Companies should also strive to fairly distribute resources and employment opportunities among different groups to avoid election-related tensions that could disrupt operations. In countries with stronger legal systems, the focus should be on recruiting local employees and providing robust compliance training to ensure all business activities during elections align with local laws and avoid political entanglements caused by procedural missteps.
- RISK INSURANCE: In high-risk countries, priority should be given to securing political risk insurance to protect against potential losses from contract breaches, government seizures, or abrupt policy changes. It’s also essential to reduce reliance on a single market by diversifying supply chains. In more politically stable countries, the focus should shift to ensuring policy continuity. This includes establishing regular communication channels with local governments and industry associations to anticipate how upcoming elections might affect the business environment.
- LEGAL COMPLIANCE: In countries with weak rule of law, companies should work closely with local legal teams to include force majeure clauses in contracts, clearly define compensation mechanisms for government breaches, and implement a rapid compliance review process. In countries with more established legal frameworks, companies should rely on formal legal procedures and judicial remedies to safeguard their operations during elections. Additionally, they should use contract terms to quantify and manage the risks of potential policy changes.
- CRISIS MANAGEMENT: In high-risk countries, companies should implement dedicated political risk early warning systems, establish direct communication channels with local security agencies, pre-plan evacuation routes and safe shelters, and—where legally permitted—deploy armed security personnel. In lower-risk environments, the focus should be on maintaining transparent communication with local governments and communities, and leveraging regional emergency response mechanisms to ensure swift and coordinated action if needed.
The article also suggests that companies should internally prohibit employees from discussing election topics on social media or in public.
However, it also notes that not all African countries present the same level of risk. “In countries like Tanzania and Kenya, government transitions have relatively limited impact on business contracts.”
