A US$7 billion mining deal between Guinea’s repressive military regime and a little-known Chinese company underscores China’s full-throttle rush into Africa and its willingness to deal with brutal and corrupt governments.
The deal announced last week by the West African country’s military junta offers the company, China International Fund Ltd (中國國際基金公司), access to Guinea’s bauxite and other minerals and could provide major revenues to a government facing international isolation. Guinea’s soldiers opened fire on demonstrators late last month, killing up to 157, and raped women in public.
Human rights groups decried the pact. China’s government has declined to confirm it or answer related questions, and the company also refused to comment.
In many ways, the Guinea deal reflects established Chinese business practices in Africa, characterized by huge investments in a still-poor continent, but also secrecy and often scant regard for labor and human rights.
China’s defenders point out that other investors from the West, Japan, India and elsewhere are also major economic partners with less-than-democratic African governments. In Guinea, Alcoa of the US and Anglo-Australian Rio Tinto PLC are already major players in the bauxite business. Also, China has given aid, loans or investment to more than 17 African countries, some of which do have democratic governments.
China’s practices, however, have raised questions about whether the huge sums will hamper the progress of human rights and good governance in Africa, even as they raise the standards of living and line the pockets of some. China has given large chunks of money to corrupt and abusive regimes such as those in oil-rich Nigeria and Sudan, much criticized over abuses in the Darfur region. For example, China has a controversial US$9 billion agreement with violence-plagued Congo.
“There’s obviously mixed emotions with regard to China-Africa relations,” said Kellie Jane Whitlock, of the South African magazine Corporate Africa.
Unlike companies from the recession-struck West, there are “Chinese companies that are still growing and looking into investing further into Africa,” Whitlock said.
The Chinese are “quite inclined to look after their investment and build their investment. They are serious about investing in Africa,” he said.
Scrutiny and mixed emotions are rising in Africa as the volume of China’s dealings soar. Trade has soared 10 times since 2001, passing the US$100 billion mark last year. Estimates of Chinese investment in Africa range upward from US$6 billion as China tries to lock up oil, gas and other key resources for its resource-hungry economy.
Estimates for total loans, investment and aid donations — often difficult to distinguish from each other — run closer to US$50 billion.
Hong Kong-registered China International Fund (CIF) has done big deals with another undemocratic African government: Angola. The company is building housing, highways and the capital’s airport in Angola, which is one of China’s leading suppliers of oil.
CIF is a private company, though its ultimate ownership is unclear.
In embarking on these deals, however, it can count on high-level access to leading Angolan officials and a web of contacts to China’s state-backed industries and companies, especially the Export-Import Bank of China, which funds many of the country’s major overseas investments. CIF’s directors are also believed to have ties to China’s military and security forces, boosting their relationships with the country’s communist leadership.
In the case of China International Fund and Guinea, it isn’t known whether the company was working on the deal before December’s coup that brought Captain Moussa “Dadis” Camara to power. The British think-tank Chatham House recently reported that CIF had been working on a US$1.6 billion investment plan for the country spanning infrastructure, housing, mining, transport, tourism, and food production.
In exchange, the company would theoretically gain access to Guinea’s plentiful deposits of bauxite, the raw material used to make aluminum, along with diamonds and gold.
Mines Minister Mahmoud Thiam said the Chinese company “will be a strategic partner in all mining projects.”
Thiam also said that new power-generating plants, railway links and planes for both international and local air transportation are part of the deal.
Founded in 2003, CIF appears to be among the boldest — and best connected — of the Chinese investors in Africa. The company’s Hong Kong business registration lists it as 99 percent owned by Dayuan International Development Ltd (大遠國際發展公司), identified by Chatham House analysts as the parent company of China Angola Oil Stock Holding Ltd (安中石油控股公司), which exports Angolan oil to China.
The remaining 1 percent is owned by CIF’s chairwoman, Lo Fong Hung (羅方紅), who is also one of Dayuan’s four directors and whose husband, Chatham House says, has been a director of the Chinese government’s two biggest investment arms.
CIF has become a broker for huge infrastructure projects in Angola, tapping financing from China’s Exim Bank and secured by the African nation’s oil revenues. Among the company’s projects: 215,500 housing units totaling more than 31 million square meters; the restoration of 1,600km of highway and 2,680km of railway; and the construction of the capital’s new airport.
Many of those remain in the planning stages, however, and some have run aground. Chinese media reports say other Chinese subcontractors have complained that CIF was failing to pay for work and materials supplied for some other African construction projects.
“Some projects have been slow to get off the ground and there are bottlenecks,” Chatham House’s Weimer said. “They are not delivering on their time lines.”
Despite CIF’s deep connections to the government, Africa expert Stephen Morrisson said the company likely hatched the deal on its own, without excessive Chinese government involvement.
“Often these decisions are taken quite independently and often there is little internal policy coordination or deliberation,” said Morrisson, of the Center for Strategic and International Studies in Washington.
He also questioned reports characterizing the deal as a “lifeline” to the Guinean regime, saying the leadership likely lacked the wherewithal to fully see it through.
“Overall, I don’t think this will rescue the current miserable crowd attempting to rule Guinea,” Morrisson said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained