China's New Focus on Africa

[Richard]

And so it goes...

Richard

China's New Focus on Africa
Time, 25 June 2010

If you want to see what's wrong with Africa, take a trip to the Democratic Republic of Congo. The size of Western Europe, with almost no paved roads, Congo is the sucking vortex where Africa's heart should be. Independent Congo gave the world Mobutu Sese Seko, who for 32 years impoverished his people while traveling the world in a chartered Concorde. His death in 1997 ushered in a civil war that killed 5.4 million people and unleashed a hurricane of rape on tens of thousands more. Today AIDS and malaria are epidemic. Congo, then, is not a place you'd normally associate with a yuppie.

Tell that to Mathis Xu, 26, a manager at a Chinese state construction company I met last year. As a languages student in Beijing, Xu took French to be different — and different is what he got. In April 2008, he was picked to translate for the Congolese government and the state-owned China Railway Engineering Corp. (CREC) in negotiations over a $9 billion deal. CREC and others would build thousands of kilometers of roads and railways, 32 hospitals, 145 health centers and two universities, an investment of $6 billion in the kind of infrastructure Congo desperately needs. As part payment, China would receive $3 billion in concessions to mine the copper and cobalt essential to its growing industries. When the deal was struck that month, Xu found himself posted to Kinshasa as CREC's liaison with the government. "We will transform this city," he exclaimed, watching CREC's giant road builders level a hillside in Kinshasa next to the Congo River. "It will be fantastic!"

As more than 300 political figures, business leaders and champions of civil society gather in Cape Town for a Global Forum sponsored by TIME and our corporate cousins at FORTUNE and CNN, China's role in Africa will be a key part of their discussions. Notwithstanding the Great Recession, many observers think the African economy is poised for great things. Fueled by a commodities boom, the continent's output grew by 5% to 7% in both 2007 and '08 and even managed 2% growth in 2009. China is not the only nation that has noticed the opportunities in Africa, but it is the one that has taken them most seriously, in ways that may change not just the region's economic landscape but its political one too.

The ambition, speed and scale of Chinese involvement in Africa is extraordinary. According to Chris Alden, author of China in Africa, two-way trade stood at $10 billion in 2000. By 2006, it was $55 billion, and in 2009 it hit $90 billion, making China Africa's single largest trading partner, supplanting the U.S., which did $86 billion in trade with Africa in 2009. Today the Chinese are pumping oil from Sudan to Angola, logging from Liberia to Gabon, mining from Zambia to Ghana and farming from Kenya to Zimbabwe. Chinese contractors are building roads from Equatorial Guinea to Ethiopia, dams from the Congo to the Nile, and hospitals and schools, sports stadiums and presidential palaces across the continent. They are buying too. Acquisitions range from a $5.5 billion stake in South Africa's Standard Bank to a $14 million investment in a mobile-phone company in Somalia.

Beijing insists it is a partner in Africa's development, delivering investment and gaining a new market for its products and new access to resources. Western businesses say China is on a resource grab. They worry that it is playing unfairly, undercutting them by paying low wages and skirting standards on safety, the environment and human rights, and coordinating commerce, assistance and diplomacy in ways impossible, not to say illegal, in the West. The truth is somewhere in between. To the extent that China is using Africa as an experiment — to try out ideas of how it might be in the world — its African adventure is worthy of close study. To do that, we must answer two questions: How is China changing Africa? And how is Africa changing China?

Let's go back to Kinshasa. Congo's got problems. The Western way of helping has been with aid — multilateral, bilateral or through self-funding religious groups and NGOs. To stem the fighting in the east, Congo has a 21,000-strong U.N. peacekeeping force — MONUC — the biggest in the world. These efforts have had mixed success. The war hasn't ended, and the world's loans to Congo have helped fuel corruption. Little has been done to address Congo's infrastructure deficit. Coordinating aid among so many groups and nations remains difficult.

Enter China. Beijing doesn't do gifts; it does deals. In Congo, China's infrastructure-for-mines deal irked the International Monetary Fund (IMF). The Fund argued that Congo's guarantee to China that it would recoup at least $3 billion in minerals was an IOU on Congo's national assets and therefore a new debt. That fell afoul of debt-write-off conditions, which require that the debtor take on no new loans. "If the Congolese take the Chinese deal," said a Western official familiar with the negotiations in mid-2009, "they will not get any more [Western] support." A standoff ensued. An earlier deal, in 2007 with Angola, also outraged the IMF. It had been negotiating a new loan with Angola for years, with carefully calibrated conditions to block corruption and alleviate poverty. By paying Luanda $5 billion in return for oil concessions and infrastructure contracts, China effectively made the IMF redundant. Diplomats across Africa like to say the continent offers space for everyone. But what's happening in Angola and Congo is a new scramble for Africa. Xu, the translator, has no doubt that he is engaged in an intense rivalry. "Not everybody is pleased to see us here, that's for sure. But we are not going to lose."

For all the heat, even IMF officials admit that the Chinese model for African development has some advantages. First, it's quick. Loan talks with multilateral agencies take years. The China-Angola discussions took weeks. "With the West, there are studies, analyses and bureaucracy," says the Western official. "The Chinese just ask what the government wants, and they don't question or comment or judge. They just do it." China also works as visibly as it does quickly. Drive across almost any African country today and you'll find Chinese engineers by the side of the road, sleeves rolled up, overseeing work crews. IMF officials in suits crunching numbers inside air-conditioned compounds just don't have the same kind of dash. "What we do is always in the shade," complains an IMF staffer in Africa. "Macroeconomic stability — what is that? You can't show it on camera."

http://www.time.com/time/magazine/ar...l?iid=tsmodule

[mark46th]

China will do well in Africa. They aren't saddled by goodwill for the people nor concerns for the environment. Money talks...

[The Reaper]

Originally Posted by mark46th

China will do well in Africa. They aren't saddled by goodwill for the people nor concerns for the environment. Money talks...

Exactly.

A couple of dozen Africans will get rich, the Chinese will harvest huge amounts of raw materials, and the rest of the Africans will get poorer, lose natural resources, and have the continent contaminated for decades.

TR