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Friday, December 10, 2004

China's growing ties with Africa

Published December 9, 2004

 

China's growing ties with Africa

Beijing's thirst for commodities like oil is fuelling its links with a continent that has long been neglected by the West

Business Times

 

By JOHN MURPHY

 

 

CHINESE businessman Hansen Luo came to Africa eight years ago to seek his fortune and found it under a mountainside in South Africa's Limpopo province.

 

 

 

Chinese takeaway: From oil fields to roads and eateries, China's emerging influence is visible nearly everywhere on the African continent

It's where his mining company each year claws out 400,000 tons of chrome ore to feed the Chinese economy's insatiable appetite for natural resources, in this case for making stainless steel.

 

Nearby, at this rural mining town's only shopping mall, fortune has also smiled on the Ling brothers. Seven years ago, the brothers came here from China to open the Chinese Clothing Shop, where bins of underwear, racks of colourful dresses and shelves lined with discount stereos, all made in China, help satisfy South Africans' demand for cut-rate clothing and electronics.

 

Mr Luo and the Ling brothers are two parts of an economic equation that is driving China's economic push into Africa, shaking up the continent's historical partnerships with Europe and the United States, as African leaders look increasingly East for trade, aid and political alliances.

 

'China needs the raw materials from Africa,' Mr Luo says. 'Africa needs cheap products from China.'

 

 

"China needs the raw materials from Africa. Africa needs cheap products from China. It's a perfect partnership, one with a huge potential for growth.'

 

- Hansen Luo, 

Chinese businessman 

 

 

It's a perfect partnership, he says, one with a 'huge potential for growth.'

 

From oil fields and refineries in the malarial heat of Sudan to hydropower stations and roads in Ethiopia to hotels, office buildings and dozens of Chinese-owned mom and pop shops in southern Africa, China's emerging influence is visible nearly everywhere on the continent.

 

The latest trade figures show how China's efforts to strike profitable deals in mining, oil production, textiles and other industries are paying off. In 2003, China-Africa trade rose to US$18.5 billion, a nearly 50 per cent increase in a year. This year's trade is on track to be significantly higher.

 

Oil is fueling China's push into Africa. Now the world's second largest consumer of oil after the United States, China, an exporter of oil as recently as the 1990s, is scouring the globe in search of untapped reserves. With oil partnerships in Sudan, Nigeria and Gabon among other countries, China now depends on Africa for about 25 per cent of its oil imports.

 

In South Africa, China's largest trading partner in Africa, Mr Luo's chrome mine is regularly mentioned by Chinese officials as example of the type of China-Africa partnerships that should be replicated across Africa.

 

Luo's ASA Metals, a joint venture between a subsidiary of one of China's state-controlled trading companies and the South African Limpopo Development Agency, bought the Dilokong Chrome Mine in 1997. ASA Metals invested US$90 million in improvements. Today, the mine produces some of the highest quality chrome in South Africa. Demand is high enough in China that Mr Luo is considering expansion.

 

Despite China's controlling stake in the mine, on site it's difficult to know China has anything to do with the business. On a recent afternoon, dozens of black and white South African workers in hard hats and blue work suits moved about the grounds, but just two Chinese employees could be seen. Of the mine's 750 employees, three are Chinese, including Mr Luo, a financial manager and a temporary consultant.

 

The cultural differences between China and Africa might be vast, but China is doing its part to bridge the gap, working to forge deeper political ties and friendship with African leaders.

 

In the past year, China has sent high-ranking officials, including President Hu Jintao, on official state visits to Africa, spreading a message that Africa and China share a common history of colonial exploitation and should work together as members of the developing world.

 

Likewise, African officials, from mayors to presidents, are boarding flights to Beijing for state visits, trade fairs and cultural exchange programmes. Mauritius, home to many Chinese-owned textile factories, this year added Chinese to its primary school curriculum.

 

'Strengthened consultation and even closer cooperation between China and Africa are conducive to augment the voices of developing countries in international affairs and safeguard their rights and interests,' said Liu Guijin, China's Ambassador to South Africa during a speech on China-Africa relations this month in Pretoria.

 

Although China's overriding interest in Africa is economic, it is doing its part to offer the world's poorest continent development assistance, deploying hundreds of doctors to clinics and hospitals, offering low-interest loans and debt forgiveness, as well as donating bridges, railways and roadways.

 

Unlike assistance from the Western nations that often links aid to a country's record of human rights, good governance and transparency, China's assistance comes with no strings attached. China's only requirement is that its African partners do not recognise Taiwan.

 

Understandably, many African leaders are eager to foster friendship with a nation that doesn't meddle in their internal affairs.

 

'They (African leaders) see it as a welcome, alternative opportunity,' says Jakkie Cilliers, executive director of the Institute for Security Studies in Pretoria. 'China comes and says we will help and help unquestioningly.'

 

There is the example of Zimbabwe, shunned by its former supporters in Europe and the United States because of the government's self-destructive land reform programme, its efforts to undermine democracy and its poor human rights record.

 

Into the void stepped China, which embraced the resource-rich state as one of its closest African friends.

 

China's top legislator, Wu Bangguo, spent four days in Zimbabwe during a recent tour of Africa.

 

Arriving with gifts of 45 laptop computers and other office equipment for Zimbabwe's parliament, Mr Wu and his delegation set to work signing joint business ventures in mining, transportation, communications and power generation.

 

The countries agreed to set up a direct flight between Beijing and Harare to help attract Chinese tourists to Zimbabwe's largely empty hotels and game parks. 'With all-weather friends like the People's Republic of China, Zimbabwe will never walk alone,' said Zimbabwe's Speaker of Parliament Emmerson Mnangagwa during the Chinese delegation's visit.

 

Likewise Sudan, with which the United States cut off trade in 1997 for Khartoum's sponsorship of terrorism, found Chinese entrepreneurs eager to develop oil fields, refineries and pipelines where Western oil companies could not operate. Sudan is one of China's major sources of imported oil.

 

In return, China has showered Sudan with assistance, building Khartoum's Friendship Hall, the Friendship Hospital, a bridge over the Nile, a rice farm and a textile mill. More importantly, China was instrumental this year in thwarting a US-backed United Nations Security Council resolution to impose sanctions on Sudan for its support of marauding Arab militias, blamed for the deaths of tens of thousands of Sudanese in Darfur.

 

'This is the best kind of partner you can ask for,' says Mutrif Sideeq, undersecretary in the Ministry of Foreign Affairs, speaking several days after the Security Council passed a watered-down resolution against Sudan.

 

African analysts say China's growing influence in Africa comes with some risks. China's unconditional aid to select African nations threatens to undermine long-standing Western efforts to strengthen democracy on the continent.

 

China risks sullying its image as it cozies up to African regimes like Sudan that have been widely condemned for human rights abuses. In a recent report on Sudan's oil industry, Human Rights Watch charges that China's oil imports from Sudan have given the Sudanese government the financial resources to buy weapons from Beijing and other nations to further violence against rebels in the South. - LAT-WP

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