China, Africa Trade Soars

China's longtime investment in Africa is paying off in access to the continent's mineral wealth.

2009-11-06
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Hu-in-Nigeria-305.jpg China's President Hu Jintao is welcomed by his Nigerian counterpart Olusegun Obasanjo upon his arrival at Abuja airport, April 26, 2006.
AFP

HONG KONG—Two-way trade flows between China and African nations have skyrocketed by a factor of 10 since 2000 as Chinese companies scramble to secure much-needed energy and mineral resources, building roads and other infrastructure and selling cheap goods to Africans in the process.

Two-way trade reached U.S. $107 billion last year, as deals drew criticism from activists and politicians, often Western, who say China is stripping Africa of raw materials while shoring up corrupt and oppressive regimes.

But according to international corruption watchdog Transparency International, China may be lowering standards to increase its presence in oil- and resource-rich African countries amid skyrocketing energy demand.

Elizabeth Davis, a China specialist at the Colorado School of Mines, said China is chiefly interested in two things in Africa.

"One is its energy resources. China's rapid economic growth has meant that they need to focus on finding energy security," she said in an interview translated and broadcast in Mandarin.

"The other thing that China is interested in in Africa is her mining resources. So they have invested in a number of African countries' mining sector," she said.

"China's commercial activities in Africa have caused a lot of concern in the international community in recent years...Some people see Chinese businesses in Africa as plundering local resources."

Need for infrastructure

Chinese businesses with investments in African countries say Chinese investments on the continent are satisfying a need for basic investment in infrastructure, and that Chinese enterprises are breathing new life into a moribund economy.

But as roads, stadiums, and government buildings built with Chinese cash spring up around the continent, critics are concerned about what exactly Beijing's money is buying.

Beijing entwines business and assistance more closely than Western governments, using infrastructure to pay for resources and often disbursing donated funds through each country's Commerce Ministry.

This makes it hard to put a figure on handouts. The only official number for Africa covers all spending from 1949 to 2006.

"Some Africans would say that corruption is a small price to pay, and that corruption existed in African countries—it’s not a new phenomenon," June Dreyer, China specialist at the University of Miami, said in an interview broadcast with a Mandarin translation.

"One the other hand a lot of Africans are very unhappy with Chinese commercial activities in Africa and with the corruption they bring with them, because the Chinese government has given a lot of money to some African dictators, and they have supplied them with weapons and surveillance and monitoring equipment."

These "can be used on their political opposition and on people who don't agree with them," Dreyer said.

"As well as this, some Africans are very angry with what they see as the exploitation by Chinese companies of African labor, as well as the destruction of Africa's environment and the undercutting of local industry with very low prices," she added.

Defining aid

The official Chinese view is that economic cooperation is a very broad set of relationships.

"We put everything into a very big basket called economic cooperation: investment, humanitarian assistance, contracts," He Wenping, an Africa expert at an official Beijing think-tank, was quoted as saying by Reuters.

"So it is difficult to figure out what belongs purely to aid."

But Beijing is aware—in the wake of an embarrassing graft probe in Namibia involving Chinese interests—of the risk to its reputation and market access if projects are discredited by graft.

Two Namibians and a Chinese national were arrested in Namibia in July, as part of a probe into bribery allegations around an X-ray security scanner supply contract and loan deal inked during Hu Jintao's 2007 to Namibia.

Nuctech representative Yang Fan and two Namibians, Teckla Lameck and Jerobeam Mokaxwa, were arrested after Namibia's Anti-Corruption Commission said they had taken money from a U.S. $12.8 million down payment on security scanning equipment.

Namibian officials recently announced they were re-opening negotiations for a loan and technology import contract with Beijing-backed Nuctech.

Nuctech was run until last year by the son of China's president Hu Jintao, despite the corruption scandal surrounding the deal.

Chinese authorities censored online news reports linking Hu Haifeng, 38, to the corruption probe in July.

Hu Haifeng left Nuctech to take up a post as Communist Party secretary of Nuctech's state-owned parent company.

Original reporting in Mandarin by Xi Wang. Mandarin service director: Jennifer Chou. Translated and written for the Web in English by Luisetta Mudie. Edited by Sarah Jackson-Han.

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