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Wednesday, February 22, 2006

Into Africa

China is making both economic and political gains in Africa:

China winning resources and loyalties of Africa, by David White, with Andrew England, Tony Hawkins, Dino Mahtani, John Reed and Andrew Yeh, Financial Times: Some see it as a late blossoming relationship, others as a new kind of colonialism. Either way, China is resolutely and rapidly extending its presence and influence across the African continent as its companies move into terrain where western businesses hesitate to tread. The Chinese advance – government-backed, led by state-run corporations and propelled by the drive to secure oil supplies – has in the span of a few years changed the pattern of Africa’s investment and trade. ... China is establishing a position as Africa’s top commercial partner behind the US and France, overtaking Britain.

For China, Africa offers an extra dimension: a continent three times its own size, less populated than itself and stocked with many of the raw materials it needs. Crude oil from Angola, platinum from Zimbabwe, copper from Zambia, tropical timber from Congo-Brazzaville, iron ore from South Africa: all are on China’s shopping list. In return, the Chinese offer advantages to African governments. They bring first-hand experience of fast development, are attuned to conditions in poor countries and are unconcerned by scruples over governance standards or human rights.

In a different way to the ideological competition that took place in Africa during the cold war, China is emerging strongly as an alternative option for governments more used to dealing with former European colonial powers and the US. At one level China is involved in a straightforward resources grab... But it is also engaged in a mix of influence-building and opportunism. ... Trade between China and Africa has almost quadrupled since the start of this decade, jumping 36 per cent last year ... About half of China’s exports are machinery, electronic and high- technology products. Tens of thousands of Chinese have moved to Africa... Chinese tourism to Africa has boomed...  According to the Beijing government, more than 600 Chinese-funded companies have been set up in Africa in the last 10 years. ...

In war-ruined Angola, the Chinese have leapt into one of the world’s most inhospitable investment environments, offering a $2bn oil-backed credit at a time when ... [a]n agreement between Angola and the International Monetary Fund has been held up ... because of IMF concerns about how the government manages its oil money. ... “The Chinese are offering the loan as an alternative to working with the IMF,” says Princeton Lyman, director of Africa policy studies at the Council on Foreign Relations in Washington.

Up to now, the African view of China’s fast-growing involvement has been overwhelmingly positive. China is widely regarded as a model of modernisation, more responsive to African needs than western partners, able to build dams, roads and bridges more quickly and cheaply and providing consumer products better suited to African pockets. ...

But criticism is growing. Trades­people ... complain about a Chinese invasion. ... Companies from China are censured for preferring Chinese labour or, when they employ locals, providing poor conditions. China’s cheap consumer goods displace local production. Garment factories have been shutting across Africa... There is a clamour for protection. When South Africa’s Cosatu labour federation staged an anniversary celebration in December, participants peeled off their red union T-shirts in disgust when word went round that they were Chinese-made. ... Chris Alden, an expert at the London School of Economics, says of the relationship: “African actors are beginning to see this as a mixed blessing.”  ...

A senior Nigerian foreign affairs official says: “...China is catching up with the level of engagement that western governments have . . . Being [is] a developing country, they understand us better. They are also prepared to put more on the table. For instance, the western world is never prepared to transfer technology – but the Chinese do. It is our view that, while China’s technology may not be as sophisticated as some western governments, it is better to have Chinese technology than none at all.” ... Zimbabwe, according to president Robert Mugabe, is “returning to the days when our greatest friends were the Chinese”. On independence day last year he told supporters: “We look again to the East, where the sun rises, and no longer to the West, where it sets.” ...

    Posted by on Wednesday, February 22, 2006 at 07:28 PM in China, Economics, International Trade, Politics | Permalink  TrackBack (0)  Comments (4)

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