Wed, Feb 07, 2007 - Page 6 News List

Hu announces aid and loans, meets criticism

TRADE TANGLE With growing apprehension over rising Chinese influence in Africa, many are upset about Chinese imports and workers


Chinese President Hu Jintao (胡錦濤) headed yesterday for South Africa, Beijing's biggest trade partner on the continent, where South African President Thabo Mbeki warned last year that Africa needed to guard against allowing ties with China to develop into a "colonial relationship."

Hu, on an eight-country tour of Africa, traveled on Monday to Namibia, where he announced new development aid for the sparsely populated, mineral-rich desert country, which hopes to benefit from an influx of Chinese investment and tourists.

Hu announced a package of measures -- including an interest-free loan and grants to build schools -- as he paid tribute to the "brotherly friendship" shown by a "young country full of vitality and talent."

Namibian President Hifikepunye Pohamba, who took office in March 2005, has actively promoted cooperation with China.

Trade between the two states in the first 11 months of last year amounted to US$240 million, an increase of 103 percent from the previous year.

Namibia, which has a population of 2 million, is rich in diamonds and minerals such as uranium, zinc and cobalt. It is also becoming an increasingly popular destination for Chinese tourists.

Growing criticism

But Hu's 24-hour stopover came amid growing criticism over rising Chinese domination in Africa, its interest-free, "no strings attached" loans and support of regimes with poor human rights records, such as Sudan and Zimbabwe.

South African trade unions, meanwhile, have complained that Chinese textile imports were devastating domestic industries, forcing the two governments to sign a memorandum of understanding last year aimed at restricting imports.

Hu, who was scheduled to hold bilateral talks with Mbeki yesterday as well as address university students, is expected to sign a number of agreements, including on the export of South African fruit to China as well as in the energy and mining sectors.

Trade between both countries in the first 11 months of last year amounted to US$240 million, an increase of 34.5 percent from the previous year.

South Africa, the continent's economic powerhouse and a major gold producing country, has much to offer China with its mineral wealth and fertile lands.

China is involved in a number of operations mining platinum, nickel and chrome ore in South Africa.

Chinese companies are also heavily invested in light manufacturing, shipping, automobiles, telecommunications, construction and consumer electronics.

Lucrative market

South African companies also view China as a lucrative market for their goods as well as a source of cheap labor.

South African investments in China amount to US$400 million, including investments by Anglo American and SAB Miller.

Of Hu's tour of eight countries, half are in southern Africa and the trip is expected to counter some of the criticism by boosting already growing trade ties and to ensure that aid pledges made by the Chinese premier last year at the China-Africa summit, such as reducing debt, increasing aid and cutting import tariffs, are carried out.

Hu arrived in Namibia from Zambia, where he inaugurated an economic cooperation zone designed to draw US$800 million in mining investment and create 60,000 jobs in the Copperbelt Province.

also see story:

Heavy Chinese investment in Zambia revives old colonial fears

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