From: Berhane Habtemariam (Berhane.Habtemariam@gmx.de)
Date: Mon Nov 02 2009 - 09:10:09 EST
China's Africa goals more than just natural resources
Mon Nov 2, 2009 5:02am GMT
By Ben Blanchard
BEIJING (Reuters) - Barely a month goes by without some new energy or
mineral deal being struck between China and an African nation. These deals
have transfixed the West, but China gets far more from the relationship than
raw resources.
Africa offers China two important things -- a chance to earn the global
respect it believes it deserves in recognition of its growing economic
clout, and friends who do not judge it, or who at least have little reason
to directly fear China's rise.
Communist China's friendly relations with Africa go back decades, to when
Beijing backed newly independent states as well as liberation movements. The
continent's backing was vital in getting China into the United Nations in
1971.
"You could argue that the contemporary driver is economic, but they've
always had a political interest in Africa, from the mid-1950s onward," said
Chris Alden, an Africa expert at the London School of Economics.
"As China becomes a more active player in multilateral affairs, it
recognises it needs partners, and Africa in many ways is a very suitable
partner."
In 2006, President Hu Jintao promised a leap in investment, trade and aid at
Beijing's first summit with African leaders. At the G20 summit of big
developed and developing economies last November, he raised Africa's needs
during the global economic turmoil.
When Chinese Premier Wen Jiabao visits Egypt for the second Africa-China
summit from November 8-9, analysts and diplomats expect him to match the $5
billion in loans and credit offered then by Hu, or even exceed it.
Africa's GDP is about $1.2 trillion, roughly one quarter the size of China's
$4.4 trillion economy.
"While savouring the fruits of its own growth, China has never forgotten its
obligations to the African brothers," the official Xinhua news agency said
in a recent commentary.
Hu's commitment to Africa appears to reflect his belief that the continent
offers a friendly stage to show the wider world that China's growth and
international policies are a global good.
"They would like to demonstrate that their benign intentions are best
represented in places like Africa," said Alden.
Africa also offers China important diplomatic support that it invariably
does not get from the United States, Europe or even other countries in Asia,
especially when it comes to contentious issues like United Nations' votes
over human rights.
"We need the vote from African countries whenever we are facing voting
events, like the Shanghai Expo, Olympic Games, Human Rights, et cetera,"
said He Wenping at China's Institute of West African and African Studies.
TEMPTING MARKETS
Of course, none of this is to say business deals and investments in mines
and oil fields are not important.
Trade between China and African countries has surged by an average annual 30
percent for much of the past decade, driven by China's appetite for oil and
minerals, and its sales of clothes, cars, telecommunications and other goods
to African markets.
Yet the investments go beyond simply buying up natural resources. China's
largest bank, ICBC, owns 20 percent of South Africa's Standard Bank.
Shenzhen-based Huawei Technologies , China's biggest telecoms equipment
maker, is pushing south from its established stamping ground in North
Africa. Peer ZTE Corp. is another Chinese player growing in importance in
Africa.
"Not everything is driven by politics -- it's driven by business," said
Martyn Davies, executive director of Stellenbosch University's Centre for
Chinese Studies in South Africa.
"All the companies that are investing in Africa are making a lot of money."
With developed markets either saturated or entry requirements too high,
Chinese firms see Africa as a great untapped market, added Duncan Innes-Ker,
Beijing-based China analyst at the Economist Intelligence Unit.
"When it comes to other parts of the world, it is true that the requirements
that come along with investment, like labour and environment standards,
essentially negate the main advantage China has, which is a lot of cheap
money and an ability to do things very well at the moderate cost end of the
scale," he said.
"A lot of it comes down to where Chinese firms have their comparative
advantage, and these are fast-growing markets," Innes-Ker added. "Chinese
companies are well placed to exploit that, as unlike a lot of Western
companies they're used to operating in a market where you have to be
flexible."
C Thomson Reuters 2009 All rights reserved
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