Sino-African relations encourage increased British involvement in Africa

 Posted by at 5:35 pm  China vs. the West, In the News  3 Responses »
Aug 252011
 

“Right now, Britain is in danger of missing out on one of the greatest economic opportunities on the planet.” These were the concerned words of British Prime Minister David Cameron whilst on his recent, but brief, visit to Lagos, Nigeria, where UK investment and influence has taken a backseat to Nigeria’s blossoming relationship with China.

It is not so much an increased lack of activity between Britain and Nigeria, but rather the extraordinary rise of Chinese business interest in the Nigerian economy that has left Cameron calling for immediate action. In fact, UK exports of goods to Nigeria were up 42% from 2007 to 2008, whilst the exports of services rose 46% over the same period. As Cameron emphasizes, though, there is still some way Britain has to go in order to catch up with China – “Today, Britain accounts for less than four percent of Africa’s exports… almost three times less than China.”

Sino-African trade went from $2 billion in 1999 to $55.5 billion in 2006, and increased further to $73 billion in 2007. Chinese trade with Africa is growing faster than with the rest of the world, as the perceived ‘raw diamond’ quality of African goods has been realised and used accordingly. The Nigerian Investment Promotion Commission (NIPC) reports that “the public investment and economic activities of Chinese in Nigeria have gained prominence in recent time… This type of investment spanned different areas of the Nigerian economy and prominent among them are those in oil and gas, construction especially building of infrastructure.”

Thus, the UK, with Cameron at the forefront, is seemingly determined to increase private enterprise and trade in Africa. UK Trade and Investment is an initiative which encourages UK-based businesses to look for investment opportunities overseas. Furthermore, influential overseas companies are encouraged to create links with companies within the UK. At present, these opportunities are presenting themselves consistently in Nigeria and its neighbours.

China, it seems, has been quick to discover the potential in Africa, as their continued investment and influence proves. The rest of the world, however, is slowly realising what could be achieved in the continent, and Britain, a state with strong links with Nigeria as well as Africa as a whole, is well-placed to build on their relations with Nigeria and thereafter increase their trade and investment. As Cameron states, “we see Africa in a new way, a different way… Yes, a place to invest our aid; but above all a place to trade.”

 Tagged with: , , , ,

Resource nationalism threatens China’s relationship with African countries

 Posted by at 11:58 am  In the News  No Responses »
Aug 232011
 

According toa recent report from Ernst & Young, the increasing global demand for commodities is encouraging resource nationalism, defined as national governments taking control of the country’s natural resources. Resource rich countries will benefit from the resulting increased price of exports, says the report, but countries that rely on imported resources could suffer badly.

China’s dependence on African resources is likely to grow, with ever more Chinese companies scouting the continent for the raw materials they need to maintain growth, but while Africa stands to benefit from the rise in demand for commodities, it also presents the continent with risks. The Ernst & Young report describes resource nationalism as the number one risk for the mining and metal sector in 2011, which “became an early target to help restore treasury conditions…because the mining and metals sector rebounded quickly from the global financial crisis.”

Namibia is one example of an African country that has made resource nationalism a part of its economic plan. The Namibian government has given the nationalised mining company, Epangelo mining, the exclusive rights to mining and mineral exploration. Epangelo, with its limited budget, will create partnerships with other companies, but will always hold the majority share, in order to have control over the mines. This has significant implications for China. The Namibian government have been rethinking their Sino-African ties, and now wants China to add value to Namibia’s raw materials domestically.

 Tagged with: , , , , , , ,

Chinese aid falls short in the Horn of Africa

 Posted by at 12:08 pm  In the News  No Responses »
Aug 062011
 

As millions in the Horn of Africa face starvation, Nanci Pelosi, a high-ranking US Democrat, has called on China to “step up their efforts” in sending aid. The UN estimates that $2.5 billion is needed to combat the effects of the famine. Some of the highest contributors so far have been the USA, which has given $122 million, Japan, which has given $28.2 million and Canada, which has given $15.1 million. Unfortunately, funding so far only comes to 58.3% of the UN’s target.

Earlier this week, the Chinese Ambassador for Ethiopia, Gu Xiaojie, announced that the Chinese government plans to give $14 million to aid the Horn of Africa, $7m of which will go directly to Ethiopia. “China is always on Africa’s side to support African governments and people during a crisis,” Gu stated.

The amounts is far less than other large donors have already committed, but it is clear that China, with its strong links to Africa, will be put under increasing international pressure to increase its aid to African countries.

 Tagged with: , , , , ,

Chinese ambassador to Ethiopia on Sino-African relations

 Posted by at 3:48 pm  China vs. the West, In the News, Interviews  No Responses »
Jul 292011
 

Zeray Hailemariam from the Walta Information Centre interviewed the Chinese ambassador to Ethiopia, Gu Xiaojie, this week, about the relationship between the two countries and China’s special relationship which Africa.

China has had a relationship with Ethiopia for over 40 years. Gu Xiaojie said that the countries share mutual trust that there has been an increase in relations between the two countries.

Trade

According to Gu Xiaojie there are “healthy trade ties” between the two countries. China has invested heavily in Ethiopia’s National Network of Telecommunications. Its has also seen a 30% increase in imports from Ethiopia, while China’s exports to Ethiopia have also increased. Gu also said that China provides as much economic assistance to Ethiopia as it can, but that China’s ability to extend aid is limited because it is still a developing country. He emphasised that the relationship between the two countries is more than purely economical, saying there is also a relationship between the peoples of the two countries.

“The people to people relationship is the important one which laid foundation to the over all relations, we see more people coming from China to Ethiopia to do business, studying, working groups and other to get know each other.”

Investment

The Chinese ambassador believes that there are currently over 130 Chinese investors in Ethiopia. While in the past investment was more clear cut, it now appears that investors are diversifying their investments in the country.

“The unique characteristics of the Chinese investment are the ever growing interest of Chinese investors to invest in Ethiopia in diversification. Leather processing and building materials were the first investment sectors by Chinese in Ethiopia. But they are expanding and diversifying to other areas.”

Indirect Colonialism

Zeray Hailemariam asked the Chinese ambassador to Ethiopia about his views on China’s activities in Africa being labelled indirect colonialism. Gu Xiaojie argued that Africa has chosen Chinese involvement.

“From some media, I have read some irresponsible accusations made in this regards. What convincing them to do this unwarranted accusation against China could be the fact that African Governments and the people are in the best position to make a judgement on China’s involvement.”

Gu accused the Western media of portraying the Chinese government as only taking natural resources from Africa. He emphasized that the relationship between Africa and China is not colonial, but brotherly.

“China and Africa know how to treat each other on equal basis and of course the African people have acknowledged and developed sincerity to the Chinese helps.”

Climate Change

Gu Xiaojie also said that China wants to reduce carbon emissions as it recognises that the country has a fifth of the world’s population, but blamed developed nations, which have, he said, been polluting for decades. He said China is working with African countries to reduce emissions. For example, in the Africa China Cooperation Forum, it aims to develop new sources of clean energy with African countries.

 Tagged with: , , , , , , , , ,

China’s effect on the Zimbabwean economy

 Posted by at 1:12 pm  In the News  No Responses »
Jul 252011
 

Zimbabwe adopted a Look East policy seven years ago, when Western aid and investment dried up because of the Zimbabwean government’s widespread human rights abuses. In reality, Look East was a way of saying look to China, and the two countries have cultivated a close relationship, but it is now showing increasing signs of strain. Last week, the role of Chinese businesses in Zimbabwe was called into question by the president of the Confederation of Zimbabwe Industries (CZI), Joseph Kanyekanye.

Kanyekanye called for the Zimbabwean government to protect local industry and pay more attention to the country’s balance of payments. Its struggling manufacturers can’t compete with the low prices of goods from imported from China and South Africa, he said, and as these manufacturers fail, Zimbabwe’s reliance on imported goods will only increase, further depressing its beleaguered economy.

Kanyekanye did not call for an end to the Look East policy. He is still enthusiastic about Chinese investment and has tried to reassure Chinese investors who pulled out of a pulp and paper project in Manicaland, when the Zimbabwean government was unable to confirm that the land would not be invaded. The deal is particularly important in Zimbabwe because it currently has to import newsprint.

 Tagged with: ,

The importance of stability in China’s oil supply

 Posted by at 4:40 pm  In the News  No Responses »
Jul 172011
 

Many of China’s investments in Africa stem from the need for energy resources. However, a new report from Brookings Institution suggests that China’s energy supplies are unstable compared to the stability that countries such as America enjoy. For example, the recent turmoil seen in Libya (which supplied 3% of China’s crude oil in 2010) and the political unrest seen in the Middle East (which supplied 46% of China’s crude oil in 2010), have both highlighted the possible volatility of supply that China could face.

As consumption of oil continues to increase within China, the greater demand puts pressure on Chinese authorities to invest in stable oil supplies. Chinese researchers have pinpointed the Arctic, which contains an estimated 13% of the world’s undiscovered oil, as a possible option for investment.

As a result, China’s investment in Africa’s energy resources could continue to decrease, as they have done over the past four years. In 2006, 32% of China’s supply of oil was exported from Africa, and in 2010 this amount decreased to 22%. With the recent political upheaval within Africa, it seems inevitable that this percentage will continue to fall, and China’s dependence on African oil will decrease.

 Tagged with: , , , , , ,

China faces new scrutiny in Africa (but this time it’s different)

 Posted by at 10:32 pm  Chinese in Africa, In the News  No Responses »
Dec 302010
 

A small, yet energetic group of demonstrators marched through the streets of South Africa’s Umlazi Township earlier this month to protest against what they claim is Beijing’s inadequate support for the United Nations’ anti-AIDS/malaria/tuberculosis initiative known as the “Global Fund.” Organized by the internationally recognized HIV/AIDS organization AHF Ithembalabantu Clinic located along the Eastern Cape in KwaZulu-Natal, the demonstrators rallied against Beijing for not living up to its financial responsibilities in the battle against HIV/AIDS transmission in Africa.

The clinic’s central charge is that China itself has benefitted enormously from the assistance provided by the Global Fund with $941 million in grants since 2002 yet Beijing has only contributed a paltry $16 million to the fund during that same period. Moreover, they add, now that China is the world’s second largest economy and Africa’s dominant trading partner, it now has the resources to not only consume less of the Global Fund’s resources but also contribute more of its own financial assets to help the fund’s activities in Africa.

This rally went entirely unnoticed by the international media and no doubt didn’t even register among Chinese officials in Pretoria. However, everyone should take notice.  There is a growing popular perception, particularly among many in the developing world, that China is no longer a victim of the industrialized world as it now itself is among the ranks of the major powers. The AHF demonstrators clearly suggest that China is facing an entirely different set of expectations among Africans than it did in the 20th century and that Beijing now has a different level of responsibility that  it must live up to if wants to be taken seriously as a global leader (an assumption, by the way, that still remains to be seen in Africa).

The accusations of Global Fund greed are now just the latest on a expanding list of criticisms of China’s engagement in Africa.  Allegations of widespread environmental destruction, labor rights violations and a general lack of transparency in its dealings with African governments are all contributing to a growing sense of unease among a number of prominent African observers.

China would be well-advised to take heed from the message conveyed by the women outside of the AHF clinic. If Beijing wants to continue to deepen its influence in the region, the government needs to proactively engage its critics.  Engagement does not necessarily imply that the activists’ allegations are just or even accurate, but they must be acknowledged.  If Chinese officials fall back on their natural instincts to hide behind the walls and resist dialogue with their various African constituencies, then the frustrations expressed in KwaZulu-Natal will no doubt spread.

 Tagged with: , , , ,

Abyei the focal point for north-south Sudan tension

 Posted by at 9:30 am  In the News  No Responses »
Dec 172010
 

Much of the tension regarding the upcoming Sudan referendum centers on a small, critical border area called Abyei.  
 
There are, in fact, two referenda planned for January 9th, 2011, one on whether southern Sudan will secede from the north, and one which will determine whether Abyei, a strategically important oil-producing region, will become part of the north or the south. The 2005 Comprehensive Peace Agreement granted Abyei residents the right to self-determination, however, there is still confusion regarding the residence status of the tribes that use the land. 
 
The nomadic Misseriya Arab ethnic group travels to Abyei during the dry season for grazing purposes, while the Ngok Dinka tribe lives there year round, subsisting on livestock and agriculture.  In the past there was conflict between the two groups as the Misseriya sided with the north’s ruling National Congress Party (NCP) and the Ngok Dinka allied with the southern rebels.  Since the Misseriya do not live in Abyei on a permanent basis, it has been a matter of contention whether they should be allowed to vote in the upcoming Abyei referendum.  However, concerned that Abyei will become part of the north in the absence of Misseriya votes, jeopardizing their grazing rights and access to land and water, the Misseriya group has threatened to resort to violence if its people are not allowed to participate in the referendum.  (For more detailed explanation of the conflict, see the Christian Science Monitor.)
 
At a press conference in October, Sudanese Vice President Ali Osman Mohamed Taha said

The Abyei referendum cannot be conducted unless an agreement is reached on the outstanding issues in a way that satisfies the two tribes of Misseriya and Ngok Dinka, and we hope that the talks between the two sides would come out with a satisfactory agreement.

 
However, according to Reuters, the United States is claiming that the time has run out for there to be a separate referendum on Abyei, and that the issue must be resolved by international arbitration.  According to Scott Gration, U.S. Envoy to Sudan, “”I think we’ve passed the opportunity for there to be a poll.  It will take a political solution to resolve this issue.”
 
Already, the Abyei Arbitration Tribunal in the Hague has restructured the boundaries of Abyei, putting two major oil fields and a pipeline into the control of Khartoum, while leaving behind an oil field named Diffra, which is owned by the Greater Nile Petroleum Operation Company, a consortium led by one of China’s state-owned oil companies, the Chinese National Petroleum Corporation (CNPC). 
 
Beijing supported the international arbitration on Abyei, and despite its longterm friendship and business relationship with Khartoum (China imports 71% of Sudan’s oil output) has recently been focusing its efforts on cultivating ties with the south. China has been investing billions of dollars in south Sudan’s oil sector, as well as in construction and engineering.  “China stands ready to provide help to the south within its capacity, no matter what the changes will be in the situation here,” said Du Yanling, director-general of the International Department of the Communist Party of China Central Committee.
 
Considering the extent of China’s investment, in both north and south Sudan, Chinese officials are primarily concerned that warfare will disrupt their business activities.  Given that both sides have been purchasing arms, and the fact that 43% of Sudanese people believe that armed conflict is imminent, Beijing is hoping that an ethnic dispute in Abyei doesn’t escalate into something that will hurt its bottom line.

 Tagged with: , , , , , , , , ,

Bad solutions to a nasty problem

 Posted by at 10:18 am  In the News  No Responses »
Dec 142010
 

Below are links to some recent discussions about mining in the Eastern Congo, profits of which are said to go towards funding some very violent and very nasty rebel groups. After each link I have included some of my thoughts.

The true cost of your new Christmas laptop? Ask the eastern Congolese – The Guardian

This story is highly hyperbolic, which makes me disinclined to accept any of it, but its fairly clear cut that some fairly nasty rebel groups are involved in mining in the Eastern part of the country, and increased oversight doesn’t sound like that irrational of an idea.

The DRC mining ban: the view from Kamituga – Texas in Africa

Everyone I have spoken to about the DRC generally agrees that mining is one of the better opportunities for poverty alleviation available over there and some academic studies argue that DRC could recover from its civil war as fast as Angola did primarily because of the presence of a large quantity of mineral wealth. Still, despite this and the previous article completely disagreeing about the effectiveness of the Kivu mining ban, I’m inclined to believe that they are talking about the same thing, corrupt practices and violence related to control of the mineral sector.

Exclusive: Interview with UN group of experts – Congo Siasa

The main problem is the assumption that the Congolese government is acting as a unified actor, which this article makes abundantly clear is not the case. Some factions in the FARDC (the DRC military) are likely to be just as criminal as the people they are fighting.

Like all problems in failed states there’s no easy answer here, but I’m pretty sure the answer is not robbing one of the poorest countries in the world of one of its few tools of poverty alleviation. The problem is made far more complicated though by the fact that its not even clear that Kabila (the DRC’s president) has control over the army (people I have spoken to who have done business there indicate that he doesn’t), so its unclear whether he can actually extract the army from “guarding” mines.

China has been doing a lot that is rather helpful in this regard, in that they are creating a mining zone that is subject to the demands of external investors. China’s mines of course have their own safety problems, and there are always appropriate questions about worker treatment, but in general they have managed to create a stable, developing area in the South of the country, despite often being put in deliberately bad situations. (Someone at the China-Africa Development Fund told me that the mines they were given in return for an infrastructure loan were essentially worthless).

Though the absolute decimation of the local wildlife has a lot to do with demand from China, so we shouldn’t give them too much credit.

 Tagged with: , , , ,

Ways to anger China: redistribute their investment to locals

 Posted by at 5:43 pm  In the News, The Beijing Consensus  No Responses »
Dec 102010
 

More on China-Zimbabwe (which I’m writing about at the moment for a publication). I was just looking over two articles, and noticed a strange coincidence:

From February 21, 2010:

Deputy Prime Minister Arthur Mutambara says the Chinese want all loans to be repaid before loosening its purse. According to the Mutambara the Chinese President Hu Jintao revealed to him during a brief meeting at the World Economic Forum in Switzerland that he considers Beijing relationship with Harare as ’business partners’ and not ’friends’.

The Chinese are quoted telling the Mr. Mutambara that: “We’ll not condemn you publicly but we’ll not give you cash”. And according to the Deputy Prime Minister, “unless we do the right thing the Chinese will not work with us.”

From February 9, 2010:

Zimbabwe passed a law that compels all businesses with assets worth more than $500,000 to be 51 percent black-owned within five years, according to a copy of the law distributed by Harare-based Veritas Trust.

The law was published in the Government Gazette, a public document. It comes into effect March 1 and stipulates prison sentences of up to five years for non-compliance. Veritas is a Harare-based non-governmental organization that monitors the passage of laws through parliament and their publication.

Oh wait, that’s probably not a coincidence at all.

As I mentioned in a previous post, I have recently spoken to people from Huadian Power who said that after the passage of the February law they lost interest in investing in the country. That doesn’t really explain why the agricultural investments seem to still be going on, but China was obviously not pleased about having their investments redistributed.

 Tagged with: , , , ,
 Older Entries  Newer Entries
Suffusion theme by Sayontan Sinha