African relations with China

[Oneword]

This forum has spoken out on China and its increasing influence on us in Africa. Facts are usually few and far between. The following, occasioned by the switch of allegiance by Malawi from Taiwan to China, provides some figures one can work with.

Malawi has cut diplomatic ties with Taiwan after 41 years and established links with China, which has become a major economic power in Africa.

China's government and its state-controlled companies have invested billions of dollars in Africa in a bid to tap natural resources for the Asian giant's growing economy and build Beijing's political influence in the developing world. Trade links between China and Africa took a leap forward after President Hu Jintao's 2004 visit when he announced a drive to strengthen relations with the continent.

China is now seriously challenging Europe's historical influence there and has become the continent's third biggest trading partner.

KEY DETAILS

• China's total trade with Africa hit $58.72 billion in the first 10 months of 2007, up 30.3 percent from a year earlier, of which
  • Exports are $30.05 billion, up 40.7 percent from a year earlier, but accounting for only 3 percent of China's total exports in the same period.
  • Imports are $28.66 billion, up 20.9 percent from a year earlier and accounting for 3.7 percent of China's total imports in the same period.
• The following are China's top 10 African traders in the first 10 months (in billion of dollars):
  • Country Trade Export Import
  • 1) South Africa 11.67 6.13 5.54
  • 2) Angola 10.34 0.98 9.36
  • 3) Sudan 4.70 1.26 3.44
  • 4) Egypt 3.76 3.55 0.21
  • 5) Nigeria 3.51 2.98 0.53
  • 6) Algeria 2.97 2.19 0.78
  • 7) Congo 2.63 0.34 2.29
  • 8) Morocco 2.18 1.83 0.35
  • 9) Libya 2.01 0.72 1.29
  • 10) Equatorial Guinea 1.70 0.08 1.62

TIMELINE OF RECENT TRADE DEALS:

• Jan 2006 - China's top offshore oil producer CNOOC agrees to pay $2.3 billion for a stake in a Nigerian oil and gas field, its largest ever overseas acquisition.
• April 2006 - Hu wraps up an Africa tour by concluding an offshore exploration deal with Kenya. The pact allows CNOOC to explore in six blocks covering 115,343 sq km (44,500 sq miles) in the north and south of Kenya. Two days earlier Beijing strikes a $4 billion deal for drilling licences in Nigeria, including grants for economic and technical cooperation, anti-malarial medicine and rice.
• Nov 2006 - China and Africa sign 16 agreements worth a total of $1.9 billion. The deals between 12 Chinese firms and 11 African governments and companies, followed Hu's pledge offering $5 billion in loans and credit, and doubling aid by 2009.
• Feb 2007 - Hu begins an eight-nation tour of Africa, signing multimillion-dollar accords with Cameroon, Liberia, Sudan, Zambia, Namibia, South Africa, Mozambique and the Seychelles, and cancelling debt in several countries.
• Sept 2007 - Shenzhen Energy Investment announces plans to team up with an Africa development fund set up by China to build a 200-megawatt gas-fired plant in Ghana costing 1.03 billion yuan ($137.2 million). China launched the fund in June with initial capital of $1 billion.
• Sept 2007 - China offers the Democratic Republic of Congo a $5 billion loan and infrastructure development package, which includes $3 billion for strategic highway and railroad projects linking DRC's mineral-rich interior to its southern neighbours and Atlantic shipping routes. The remaining $2 billion was to go to revive the country's mining sector.
• Oct 2007 - China's biggest lender, Industrial and Commercial Bank of China, agrees to pay $5.6 billion for 20 percent of South Africa's Standard Bank, the biggest foreign purchase by a Chinese commercial bank.
• Meanwhile, Taiwan on Monday strongly denounced its rival China for using money to lure away Malawi after the African country had earlier said it was setting up diplomatic ties with Beijing.
• The foreign ministry also blasted the Malawi government, saying it was trying to cooperate with China to humiliate Taipei, as the move coincides with an overseas visit by Taiwan's President Chen Shui-bian.
• "The government of the Republic of China (Taiwan's official name) severely condemns China for using a lot of money to lure away our ally, as part of its efforts to squeeze Taiwan's international space," Taiwan's Vice Foreign Minister Tzu-pao Yang told reporters.
• Taiwan's government also immediately terminated various cooperation programmes with its former African ally, he said.
• The remarks came shortly after Malawi's foreign minister said it had decided to switch its diplomatic recognition from Taiwan to the Chinese government in Beijing.
• Yang did not specify how much China may have handed over but said it had late last year offered up to 6 billion dollars for Malawi to switch allegiance.
• Chen, of the independence-leaning Democratic Progressive Party, lashed out at Beijing, accusing it of trying to undermine the island.
• "China shows no signs that it will ease its military threats, diplomatic suppression and two-handed economic strategy on Taiwan," he said before heading on a week-long mission to Guatemala and St Lucia.
• "China is intensifying its 'dollar diplomacy' attacks on Taiwan and using all means possible to take away our allies. We cannot sit back passively... we have to step out for the international community to see Taiwan."
• Latin America, the South Pacific and Africa have been the main diplomatic battlegrounds for the two nations, which have accused each other in the past of luring allies with "cheque book diplomacy".
• Yang was especially angry at the timing of the diplomatic setback, which leaves only 23 countries recognising Taipei. "It is a great humiliation to Taiwan's government and people when our head of state is visiting abroad," he said. But he pledged that the government would never buckle under Beijing's pressure and would continue to fight for its voice internationally.
• China on Monday chided Washington for allowing Chen to make a stopover in the United States en route to Central America, calling him a "destroyer of peace".
• Beijing opposes any foreign visits by top government officials of Taiwan, which it regards as part of its territory awaiting reunification, by force if necessary. Taiwan and China split in 1949 after a civil war.
• Source: Reuters/Taiwan News Agency

[Tuhafeni]

The economic tie of China and African countries seems to be strong. However, the question is Does China import quality product to Africa? e.g. in Namibia.

I asked the above question because people mostly Namibian are complaining about poor quality products found in most Chanesse shops here in Namibia and Some are saying if you by product e.g. a shirt from non-Chanesse shop but it was made in China it could be of high quality and may be imported to Namibia through Europe or America.

What are u saying?

[Oneword]

Tuhafeni,

Thanks. Good question. I'll have to do some checking, though.

[Uncle Paul]

Many Chinese businesspeople and companies operating in southern Africa have a reputation for allegedly cutting corners and undercutting their local, established competition. Whether it is saving money by not registering workers with social security and not making payments, not putting retriement funds or social security schemes in place and contributing to them, not paying living wages, treating workers as second-class citizens, pulling strings to obtain work permits and identification documents, licenses and passports, et... the net effect is that Chinese businesspeople are not only making friends in the region, but also enemies, and are developing a reputation.

Now that may not bother the Chinese businesspeople and officials much as long as they receive the protection of their host Governments, and as long as they keep the wheels greased by keeping the local elites on their side, but it is certainly not in their long-term interest. China sees no reason yet to eat humble pie, but it may do so at is own peril in the long run. Remember the colonialists of yesteryear? How did that behavior become them?

There is no reason to be xenophobic either, and we must guard against that, too. Many other Chinese businesspeople are honest, hard-working, quiet and industrious people who get on with it. Many investments by Chinese companies in our part of the world contribute to economic and social development. No doubt about that, and they are very welcome.

[Oneword]

Three short points to remember:

1.) Most, if not all, Chinese companies working in Namibia are fully state-owned! They are not even para-statals as per our definition.

2.) Many Chinese businesspeople ARE, as Uncle Paul says, honest, etc. These, however, usually swim in the very big ponds; they don't paddle in baby ponds like Namibia.

3.) I have a faint suspicion that we may see even more penetration into local and regional markets by Chinese companies, especially in the building trade and related sectors, once the Olympic Games are over and all building and other activity in China has come to a virtual halt

[Dude]

I'm with President Mbeki on this one for a change, and this is what he said to students in the Cape last year: "Africa must guard against falling into a colonial relationship with China" he said. Mbeki said African nations must strive for their relationship with China to be based on equal trade. Mbeki said that if Africa just exported raw materials to China while importing Chinese manufactured goods, the African continent could be "condemned to underdevelopment". He said that this would simply mean "a replication" of Africa's historical relationship with its former colonial powers. China was also too happy to support repressive African regimes. Indeed, Mr Mbeki, indeed!

[Pietro]

My insignifant, humble, little contribution:
Yes, China does import items of good manufacture and quality into Namibia and other countries.

TRUE!!

Sewing machines, bicycles, generator sets, locom,otives, cars, etc.

Some of the products from the Yellow Peril are really not bad at all !!!! Why, because they are based on very solid engineering from Britain, Germany, Japan! and other nations of the industrialised world.

Even their computers (Lenovo, for instance) are first-class and can compare with any of the others in that price range!!! Always look at that!!! Of course, a cheap product in any range cannot compare with an expensive one of the same range.

Don't tell me you believe that a Fiat UNO has the same quality of build , etc as a Ferrari???

[Oneword]

Pietro ...

You make me feel like a grade 12 teacher who expected a (pupil) learner to fail and now this pupil surprises the teacher with a distinction!

Well said, old boy!

[Geek]

Lenovo is the re-branded division of IBM that was purchased by the company a few years ago. All American technology, and good.

[Oneword]

Still proves my point!


Thanks