Chinese businesses are enjoying increased autonomy and economic freedom to invest in Africa, analysts say, challenging diplomatic perceptions that Beijing is playing puppet master on the continent.
With China’s role in Africa the subject of considerable tension with the US, the reality, according to financial experts, is that the sheer scale of Chinese interests makes overarching control impossible.
“To assume that everyone in Beijing is on the same page is incorrect,” said Martyn Davies, chief executive of Frontier Advisory in Johannesburg, an investment firm specializing in emerging markets.
“That somehow there’s this grand strategic plan and everyone is directed like pieces on a chessboard, as is often characterized, is not entirely the case,” he said.
Chinese capital has poured into countries including Nigeria, Angola, Zambia and South Africa at an intrepid pace over the past decade to capture the continent’s natural resources and fuel the booming economy back home.
Bilateral trade rose from US$10.6 billion in 2000 to US$106.8 billion in 2008, at an annual growth rate of more than 30 percent. Beijing claims trade will again top US$100 billion this year.
“Chinese oil companies have especially significant freedom to operate —- indeed they can sell to the spot market,” said Alex Vines, head of the Africa Programme for Chatham House. “Chinese construction companies are different, but there are so many of them, the government has difficulty keeping track of them outside China.”
China’s thirst for commodities is matched by Africa’s need for electricity, roads and clean water. The World Bank says Africa needs US$93 billion a year in infrastructure investment over the next decade to ensure its people have access to basic services, making Chinese efficiency attractive to governments.
The result has seen China dole out cheap money to state-owned companies to secure mining rights and infrastructure projects in Africa, outmaneuvering Western states and local competition.
A diplomatic cable published by the whistleblowing Web site WikiLeaks last week indicated that the US in particular is irked by China’s Africa policy.
The message quoted a senior US official in Nigeria describing China as “a very aggressive and pernicious economic competitor with no morals.”
However, many analysts believe Beijing is playing an enabling rather than controlling role, enticing Chinese businesses into Africa through financial perks, without the need to maintain direct links on the ground.
Chinese and African banks have formed joint ventures and other arrangements to stimulate trade.
The Industrial and Commercial Bank of China purchased a 20 percent stake in South Africa’s Standard Bank for US$5.6 billion in cash in 2007, at that time the largest foreign direct investment in Africa.
“Chinese firms are not relying solely on Chinese finance to do the kind of business that they’re involved in,” said Chris Alden, an expert on Africa at the London School of Economics. “They’re bidding for and increasingly getting tenders, World Bank tenders or other public tenders ... that are not linked with Chinese financial incentives or interests.”
Beijing also arranges contracts where commodities such as oil and minerals are exchanged for infrastructure, something the US and other Western states have not traditionally done. And as Chinese goods perforate African retail markets and trade becomes less commodity-driven, uncovering a Beijing master plan grows increasingly tricky.
Nearly half of China’s major cities are suffering “moderate to severe” levels of subsidence, putting millions of people at risk of flooding, especially as sea levels rise, according to a study of nationwide satellite data released yesterday. The authors of the paper, published by the journal Science, found that 45 percent of China’s urban land was sinking faster than 3mm per year, with 16 percent at more than 10mm per year, driven not only by declining water tables, but also the sheer weight of the built environment. With China’s urban population already in excess of 900 million people, “even a small portion
UNSETTLING IMAGES: The scene took place in front of TV crews covering the Trump trial, with a CNN anchor calling it an ‘emotional and unbelievably disturbing moment’ A man who doused himself in an accelerant and set himself on fire outside the courthouse where former US president Donald Trump is on trial has died, police said yesterday. The New York City Police Department (NYPD) said the man was declared dead by staff at an area hospital. The man was in Collect Pond Park at about 1:30pm on Friday when he took out pamphlets espousing conspiracy theories, tossed them around, then doused himself in an accelerant and set himself on fire, officials and witnesses said. A large number of police officers were nearby when it happened. Some officers and bystanders rushed
Beijing is continuing to commit genocide and crimes against humanity against Uyghurs and other Muslim minorities in its western Xinjiang province, U.S. Secretary of State Antony Blinken said in a report published on Monday, ahead of his planned visit to China this week. The State Department’s annual human rights report, which documents abuses recorded all over the world during the previous calendar year, repeated language from previous years on the treatment of Muslims in Xinjiang, but the publication raises the issue ahead of delicate talks, including on the war in Ukraine and global trade, between the top U.S. diplomat and Chinese
HYPOCRISY? The Chinese Ministry of Foreign Affairs yesterday asked whether Biden was talking about China or the US when he used the word ‘xenophobic’ US President Joe Biden on Wednesday called for a hike in steel tariffs on China, accusing Beijing of cheating as he spoke at a campaign event in Pennsylvania. Biden accused China of xenophobia, too, in a speech to union members in Pittsburgh. “They’re not competing, they’re cheating. They’re cheating and we’ve seen the damage here in America,” Biden said. Chinese steel companies “don’t need to worry about making a profit because the Chinese government is subsidizing them so heavily,” he said. Biden said he had called for the US Trade Representative to triple the tariff rates for Chinese steel and aluminum if Beijing was