Friday, October 06, 2006

Chinafrica(5) - Watching for PRC Influence in Africa

China mixes rice and neo-colonialism
October 6, 2006 By ANDnetwork .com

When China, one of the world's most corrupt countries, starts dishing out tens of billions of US dollars in aid and business contracts in Africa, the world's most corrupt continent, alarm bells go off in Washington and other Western capitals. The fact that China turns a blind eye to widespread human-rights abuses on the continent further heightens concerns in the West.To secure oil supply is a major reason for China aggressively to expand its economic ties with Africa. To fuel its phenomenal economic growth, which has averaged more than 9% annually for the past 20 years, China needs oil as well as raw materials. Not rich in oil reserves, China is becoming increasingly dependent on imported oil. According the Ministry of Commerce, oil imports accounted for 47% of the country's total consumption in the first half of this year.

Last year, the US Congress successfully blocked the attempted takeover of the US oil company Unocal Corp by CNOOC Ltd, a subsidiary of China National Offshore Oil Corp, one of China's three largest energy firms. Energy security rose to the top of the national agenda and Chinese oil companies became even more aggressive in search of possible petroleum sources in other parts of the world.

Africa is home to 8% of the world's oil reserves, which has prompted Beijing to spend billions of dollars to secure drilling rights in Nigeria, Sudan and Angola and to negotiate exploration contracts with Chad, Gabon, Mauritania, Kenya, Equatorial Guinea, Ethiopia and the Republic of the Congo. The continent now accounts for 25% of China's oil imports.

In addition, the Chinese are also key investors in the copper industry in Zambia and the Democratic Republic of Congo. And they are buying timber in Mozambique, Liberia, Gabon, Cameroon and Equatorial Guinea.

In exchange for securing energy, mineral resources and other raw materials, China has been doling out aid and providing technical assistance and interest-free loans to business-friendly African governments. At the same time, Chinese companies are winning contracts to build highways, pipelines, hydroelectric dams, hospitals and sports stadiums and to upgrade railways, ports and airports.

In recent years, China has been increasingly aggressive in diverting and expanding its trade with other parts of the world as its trade frictions with the United States and the European Union intensify. Hence China's trade with Africa continues to soar and, not coincidentally, the long-suffering economies of sub-Saharan Africa are enjoying their fastest growth in 30 years.

According to the Chinese government, China's trade with Africa has increased from US$10.6 billion in 2000 to $39.7 billion last year. During that same period, the International Monetary Fund reports, the economic growth rate in sub-Saharan Africa has nearly doubled. This year's 5.8% rise, the IMF says,is the best Africa has seen since 1974.

Where Western companies fear to tread because of small profit margins or environmental or political concerns, the Chinese have plunged in. China's state-owned companies have the ability to put short-term profit aside and focus on the government's long-term economic plans.

As for environmental and political qualms, Chinese leaders have made it clear that they don't have many. In that way, China's no-strings-attached approach to doing business in Africa flies in the face of Western concerns about democratic development and respect for human rights.

So despite the largely negative reaction in the West to China's push into Africa, Chinese investment is clearly paying off. But how and for whom? Those are the sticky questions.

For China, the benefits have been substantial, and Chinese leaders hope to build on their success at the third Ministerial Meeting of the Forum on China-Africa Cooperation, to be held in Beijing next month.

Premier Wen Jiabao summed up the Chinese strategy at a stopover in Brazzaville during his Africa tour in June: "China has been developing relations with Africa under principles of mutual benefit and non-interference in Africa's internal affairs."

Wen was only reinforcing the see-no-evil, hear-no-evil policy that President Hu Jintao had articulated during his earlier visit to the continent in April.

The offer is clear: in return for securing the raw materials necessary to feed its voracious economy, China will not meddle in the internal affairs of African governments, even if those governments are known for rampant corruption and human-rights abuses.

From Beijing's perspective, the partnership is working brilliantly.

Africa's ruling elite are also happy as the Chinese pump money and cheap manufactured goods into their economies without the ritual hectoring about democracy and human rights that they have grown accustomed to hearing from Western partners.

Thanks to China, demand for African oil, copper and platinum is surging, and everything from Chinese-made T-shirts to kitchen utensils to motorcycles is widely available across the continent at prices lower than those for comparable goods imported from elsewhere. Two companies in South Africa have announced plans to sell cheap Chinese automobiles.

And certainly African leaders such as Zimbabwe's Robert Mugabe and Sudan's Omar Hasan Ahmad al-Bashir are grateful for China's promise of an "equal partnership" with their nations.

President Mugabe, 82, who has ruled Zimbabwe since 1980, has the Chinese to thank for the blue-glazed tiles on the roof of his new $13 million, 25-bedroom presidential palace. The tiles came gratis, but the Chinese have also won contracts totaling hundreds of millions of dollars to provide hydroelectric generators for Zimbabwe's power authority, which happens to be run by the president's brother-in-law.

In addition, China is supplying jets to the perennially mismanaged Air Zimbabwe and buses -1,000 of them - to the country's municipalities. Zimbabwe's air force has also been strengthened by China, to the tune of $200 million. The Chinese are even farming about 1,000 square kilometers of the land that has been seized from white farmers since 2000.

In Sudan, Beijing is one of Bashir's leading arms supplier and has supported the president's resistance to the stationing of United Nations peacekeeping troops in the Darfur region, where the United States alleges government-sanction ed genocide has killed hundreds of thousands. Chinese support should come as no surprise, since more than half of Sudan's oil exports go to China. Overall, Sudan accounts for 5% of China's oil.

China National Petroleum Corp owns 40% of the Greater Nile Petroleum Operating Co. Sinopec (China Petrochemical Corp) is building a 1,500-kilometer pipeline to Port Sudan on the Red Sea, where the China Petroleum Engineering and Construction Group is constructing a tanker terminal.

It's safe to say that the Sudanese president won't be hearing many complaints from Beijing - unless, of course, the oil stops flowing.

In Washington, China's relationship with such nations as Sudan has officials worrying that Chinese investment could, either directly or indirectly, be used to support terrorists. To Beijing, this is just another example of alarmist thinking from a White House that seems determined to contain China's rise as a world power.

While Chinese and African leaders are celebrating what Beijing describes as their current "win-win" relationship, the average African may not be so thrilled. On a continent where nearly half the people live on less than $1 a day, a cheap car or air-conditioner- or even a new T-shirt - is still out of reach of ordinary people.

Africans need jobs. And while there is no question that Chinese projects have created jobs in some places, they have also clearly taken them away in others. In South Africa and Lesotho, for example, cheap Chinese imports are blamed for the loss of tens of thousands of local jobs in the textile industry, while in Angola, China has insisted on using Chinese laborers as it upgrades the country's railways.

In Zambia, opposition party leader Michael Sata has tapped into resentment of the Chinese with his suggestion that they be expelled from the country along with other foreign workers who he claims have taken jobs away from locals. Sata was defeated last week by incumbent Levy Mwanawasa in a presidential election that his supporters claim was rigged.

In Zimbabwe, Mugabe may be admiring the blue tiles on the roof of his palace, but ordinary citizens have coined a new phrase to describe Chinese goods - from buses that break down to clothing that falls apart - as substandard in quality: "zhing-zhong" . Some Zimbabweans have even started using this epithet to describe Chinese people.

Although China's Africa policy has won the hearts and minds of the continent's rulers, the people themselves appear to lag behind. They are waiting to see whether the Chinese model of engagement with the continent is going to be any different than those of the exploitative colonial powers of the past.

So far - with China using the continent as a source of raw materials and a dumping ground for its own manufactured goods - the formula seems much the same.


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