[FairfieldLife] China's New Drive on the African Continent

Wed, 03 May 2006 10:10:34 -0700

 
 
Online edition of India's National Newspaper
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  China's new push on the African continent
 
Pallavi Aiyar
Beijing is making a concerted effort to expand its economic and diplomatic clout.
CHINESE PRESIDENT Hu Jintao's three-nation Africa tour to Morocco, Nigeria, and Kenya might have received only a sliver of the international limelight his much-heralded visit to the United States generated a week earlier, but in China itself the trip is seen as having considerable strategic weight.
 
Since the turn of the century when Beijing established the Sino-African Cooperation Forum, China has been making a concerted effort to expand its economic and diplomatic clout with the raw material rich continent. By combining handouts of billions of dollars in aid and investment with judicious rhetoric that alludes to the spirit of Bandung, Beijing is clearly looking to challenge U.S. leadership in the region. It is within this context that Mr. Hu's recent travels should be viewed.
 
As he stopped off across Africa last week, Mr. Hu stressed that Beijing wants a "strategic partnership" with Africa, seeking to add a new political dimension to the already blossoming bilateral economic romance. Speaking to Nigeria's Parliament, the Chinese President put forward a five-point proposal for developing ties in the areas of politics, the economy, culture, security, and international affairs.
 
According to reports in the African media, local analysts say Mr. Hu's stress on the "independence and sovereignty" of Africa is seen to offer an attractive alternative to the U.S.' interventionist and prescriptive foreign policy with its one-dimensional focus on the "war against terror."
 
Signalling the importance it gives to evolving a coherent Africa policy, Beijing brought out its first ever White Paper on Africa in January this year. It states that if African countries choose to accept the "one China principle as the political foundation for the establishment and development of China's relations with African countries," China will "co-ordinate positions on major international and regional issues and stand for mutual support on major issues concerning state sovereignty, territorial integrity, national dignity and human rights."
 
Given the economic benefits that trade and investment with China spell combined with the diplomatic weight of Beijing's permanent seat on the U.N. Security Council, it is small wonder that more and more African countries are in fact choosing to ditch ties with Taiwan and recognise Beijing's claim to sovereignty over the island. Thus while in the early 1990s there were still more than 20 African countries that recognised Taiwan, now there are only six.
 
In October last year, Chinese Foreign Minister Li Zhaoxing attended the official opening of the Chinese embassy in Senegal, which had been closed after it recognised Taiwan in 1996. Following Senegal breaking off relations with Taiwan, Mr. Li announced debt cancellation worth $18.5 million, with $3.7 million for the construction of hospitals, roads, and other infrastructure. Liberia, another country to ditch Taiwan in 2003, received $25 million for reconstruction and the offer of a $5 million interest-free loan.
 
Bilateral trade between Africa and China surged to almost $40 billion in 2005 from $10 billion at the turn of the century, according to official Chinese statistics. Africa enjoyed a trade surplus of $2.38 billion. By the end of last year, some 750 Chinese enterprises had invested a total of $1.25 billion in the continent.
 
From Senegal to Ethiopia, China's "good-will" gifts and cheap products are proving a hit with both the people and their politicians. According to reports in African media, even in the fabled trading town of Timbuktu, the moped of choice for young men is the Chinese "Jin-Cheng."
 
Mr. Hu has been stressing the "complementarities" of the Chinese and African economies that promise much scope for the "win-win" situations so often touted by Chinese leaders.
 
In this case, however, there appears to be much truth underlying the diplomatic-speak. Africa provides rich pickings — particularly oil — for raw material hungry China while the Chinese can offer the expertise and investments much needed by African nations to develop infrastructure and kick-start industry.
 
Africa's Gulf of Guinea coastline has in particular attracted China's attention given that it is one of the world's oil exploration hotspots. With an economy that has been growing at around 10 per cent for years on the trot, China has emerged as the second largest oil importer after the U.S. Wooing Africa, even those countries shunned by the West such as Sudan, is thus a priority.
 
So far Beijing's Africa strategy has met with considerable success. During Mr. Hu's Nigeria's visit for example, China was awarded preferential rights in bidding for four oil-drilling licences in exchange for $4 billion in infrastructure investments, anti-malaria drugs, and training for health officials. A few days before the President's trip, China National Offshore Oil Corporation (CNOOC) finalised a payment for $2.7 billion for a 45 per cent stake in an oil block in Nigeria that is due to start producing in 2008.
 
This is not the first time China has sought oil in exchange for investment or aid as India has learnt by experience. In 2004, the Oil and Natural Gas Corporation's bid to purchase a block auctioned by Shell in Angola was topped by the Chinese, who used a $2 billion aid package to convince the Angolan Government at the last moment, to go with China instead. China also struck a deal with Gabon to buy oil in 2004 and in 2005 Nigeria agreed to provide 30,000 barrels of oil a day to PetroChina in an $800 million deal.
 
The China National Petroleum Corporation (CNPC) is the largest investor in the Sudanese oil industry. The decision of the U.S. Government to cut ties with Sudan in the mid-1990s pressured Western oil companies to withdraw and opened new opportunities for Chinese investment.
 
CNPC, in a joint venture with the Greater Nile Petroleum Operating Company has invested over $8 billion in Sudan, including the 1,500 km pipeline to transport oil to the Marsa al-Bashair harbour terminal near the Port of Sudan. By 2005, China was purchasing between 50 per cent and 60 per cent of Sudan's crude production. In total, Africa accounts for about 28 per cent of China's total oil imports.
 
But beyond petroleum Chinese state companies have invested in African mines, fishing, and telecommunications. Over 60 per cent of Gabon's and a large part of Equatorial Guinea's timber production is purchased by China. China, the world's largest consumer of copper, has invested $170 million in the Zambian copper mining sector. The Chambezi copper mine, which was purchased in 1999, is now its largest mining operation in Africa. China is increasingly involved in the Democratic Republic of Congo, investing in cobalt and copper mines as well.
 
Although resource extraction is the centrepiece of China's new Africa push, non-resource based investments have not been ignored. In Ethiopia, China is involved in telecommunications, in Ghana in dam construction, and in Kenya in road building. It is even helping Nigeria to launch its first space satellite. China has also constructed a new Foreign Affairs Ministry building in Uganda and Djibouti and built a sports stadium in Mali that enabled the country to host the African Nation's Cup football tournament.
 
In the cultural sphere, China recently started up a Confucius Institute to promote the study of Chinese language and culture in Nairobi and designated eight African countries as official tourist destinations to encourage Chinese tourism in the region. The Chinese government's African Human Resources Development Fund pays for 10,000 Africans to be trained in Beijing.
 
Finally, China is also increasingly getting involved in peacekeeping operations across the continent. In 2004 the mainland contributed more than 1,500 troops to the U.N. presence in Africa.
 
All across Africa Chinese state-owned companies are outbidding Western contractors on infrastructure projects while Beijing provides soft loans and aid as a means to increase its competitive advantage in acquiring natural resource assets. Moreover, its policy of non-involvement in the domestic politics of African countries makes China an attractive partner for those nations marginalised by the Western powers.
 
Beijing's commitment to Africa has been backed up by a succession of high-level visits to the continent. Chinese Foreign Minister Li Zhaoxing kicked off 2006 by a tour of African countries including Cape Verde, Liberia, Mali, Senegal, Nigeria, and Libya. In 2004, Mr. Hu visited Egypt, Gabon, and Algeria.
 
China's aggressive African safari certainly has traditional Western powers with stakes in Africa such as the U.K., France, and the U.S. sitting up and taking notice. But India too, would do well to pay some attention. Mr. Hu is the second Chinese President to visit Nigeria in about four years. The last Indian Prime Minister to have paid an official visit to Nigeria, the most populous African country, was Jawaharlal Nehru in 1962.
                
                                
 

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