How Should Chinese Enterprises Cope With The Risks Of African Market Development Under The Epidemic Situation?

The outbreak of new crown pneumonia has spread rapidly all over the world, and has become a "public health emergencies of international concern", and the African continent is no exception. As the number of infected persons continues to increase, African countries have adopted measures such as sealing up cities, breaking up flights and cancelling assemblies. The epidemic poses a series of challenges to emergency management, international operation and territorial management of Chinese contractors heading for international and deep ploughing African markets. This paper analyzes the impact of the new crown epidemic on the development of the "going out" Chinese enterprises in the African market, and puts forward some suggestions for the related problems.

Impact on African market development

No.1

Difficulties in personnel flow and data delivery

On the one hand, affected by the epidemic, most African countries take more stringent control measures for entry personnel, such as suspension of visas, suspension of flights and even the closure of the country and the closure of the city, which directly affect the Chinese contractors' on-site inspection of overseas projects or participate in bidding, negotiations, and so on, and affect the smooth development of the project. On the other hand, the difficulty in the flow of personnel and the decline in the speed of international express delivery also affect the delivery of the original information of the certificate, the notarial certificate and the letter of guarantee. Many contractors encounter domestic documents can not be delivered to overseas destinations in time, resulting in the submission of tender documents can not be completed on schedule, or even if timely submission, but also because of the lack of completeness resulting in the issue of scrap.

No.2

The number of tender for spot fund projects is reduced or postponed.

According to the announcement of some international government departments, a number of recent bidding projects have been cancelled due to the outbreak of the epidemic, and some of the project owners have postponed tendering.

No.3

African countries' indebtedness continues to climb, and debt pressure on maturity continues to increase.

Under the impact of the epidemic, the financial funds of African countries, which are struggling to meet their needs, are heavily used to fight against the epidemic, making it more and more difficult for African countries with low income developing countries to become more common. Some countries have made requests for debt extension to creditors or international multilateral financial institutions, although some members of the group of 20 agreed to stop lending interest before the end of April 15th, and some countries also openly proposed the idea of exemption from debt.

The issue of debt renewal or exemption will make it difficult for many countries to continue lending to China, including China. The IMF has recently raised the debt risk level of some African countries, taking into account the risk of lending to these countries will be more prudent, and the promotion of EPCF mode projects will be slower and more difficult.

No.4

Investment project risk increased

The new crown has changed the budgets of African governments, as well as changing the way of consumption of local people, which will affect the economic structure of all countries. The projects that are dominated by Chinese contractors will change the original project conditions, and the planned income and cash flow will be affected to varying degrees. It is expected that some of the proceeds will be difficult to achieve, so that Chinese enterprises will further invest. Zi's attitude is more cautious.

No.5

Security risks will be more prominent

Affected by the epidemic, a large number of enterprises in African countries shut down and shut down their production. The unemployment rate continued to rise, exacerbating the survival problems of low-income people in various African countries, the spread of various insecurity factors, and the gradual deterioration of social security environment, which directly led to the threat of personal safety and property safety in the market development or the resident personnel. Party personnel went to the scene to investigate the accident of personal injury.

No.6

Continued reduction of projects directly leads to more fierce competition among contractors.

Affected by the epidemic, the investment and financing projects in the African market are more difficult to push forward, and the cash fund projects are also gradually reduced by the budget constraints of the host countries. At the same time, the layout of the Chinese funded enterprises has already been formed, and the business tasks and pressures exist objectively. Judging from the opening results of some recent spot projects, the competition among contractors is even more tragic.

No.7

The host country's political risks will continue to emerge.

At present, many African countries have declared a state of emergency. Measures such as sealing the city, sealing up the country and shutting down work will inevitably lead to the overall economic recession of the African continent, which will make the fragile economic system of African countries worse. This will inevitably lead to the continued high unemployment rate and the difficulty of social governance in some countries. The political risks of some African countries are expected to emerge one after another.

Relevant suggestions

In the face of the more complex external market environment, it is suggested that Chinese enterprises should take the following measures in the process of market development in the special period of the new crown pneumonia epidemic.

No.1

Establish and improve management plan for environment, health, safety management and crisis response of overseas business team.

At present, all Chinese funded enterprises should set up a comprehensive new emergency plan for new epidemic situations according to their own reality. We should take the health of the permanent resident as the most important task at present, improve the awareness of prevention and control of market developers through various effective ways, strengthen publicity and education on prevention and control of knowledge, improve the ability of epidemic prevention and control of employees, strengthen the care and care for developers in overseas markets, and ensure the physical and mental health of the permanent residents in front.

No.2

Plan ahead and make early progress.

The team involved in the market development should list the original requirements of the tender documents ahead of time, if it is necessary to send them from the country, it should be personally deployed and personally questioned by the relevant responsible persons, so as to avoid the serious consequences of delay resulting in failure to complete the bidding documents.

No.3

Strengthen localization management and make full use of localized resources

Under the current epidemic situation, the flow of transnational personnel is almost interrupted. Making full use of territorial resources is an important means of developing market operation and development, and is also the most effective way to solve human resources. Localization management is not only the need of overseas market development, but also the only way for our contracting enterprises to survive and develop overseas. Chinese enterprises should fully recognize the importance of cultivating qualified personnel for the management of the enterprise culture and attach importance to them from the strategic level.

No.4

Give full play to the role of insurance

In view of the potential risks arising from the development of the international project contracting business, we should carefully study the bidding documents in the bidding stage, give full play to the role of credit insurance, advance the docking with insurance companies, and put forward relevant professional risk control suggestions to be applied.

No.5

Set up bottom line thinking, persist in doing something for nothing.

For some projects that cannot be guaranteed by funds, especially those that require large amounts of capital, they should be avoided as far as possible. For EPCF projects, the investment should be controlled before the project advance payment is in place, so as to avoid the eventual loss of the project.