Re: So it's politics, pure and simple. Starve them to control them. It's being done all over Africa.
So true! Africa, the Universe's basket case... You know, sometimes I say to myself, what a pity there ain't more Searle Sennetts in Europe and the US! I guess it'd be just too good to be true... Instead, Europe is stuck with bleeding hearts and do-gooders who fancy they've got something useful to do in Africa! While all their African meddling amounts to nothing else than spoiling and hindering China's African schemes --they're a DRAG.
China scooping up deals in Africa as US firms hesitate
By John Donnelly, Globe Staff | December 24, 2005
LUANDA, Angola -- China's growing demand for energy sources and profitable construction deals is leading the world's most populous country increasingly to swoop into Africa, where it has found abundant raw materials, governments desperate for outside investments, and relatively little competition from American firms.
The Chinese, sensing Africa's tremendous potential upside, are making strategic economic inroads into a continent that, outside of oil investments, has long been written off by most Western companies as too risky because of poor governance or threat of conflict. US companies, in particular, have been caught flat-footed by the Chinese financial strikes, according to American and other experts on Africa's economic potential.
''China is competing for anything and everything at this stage," said Dianna Games, a South African political and economic analyst who studies business trends in sub-Saharan Africa. ''They know Africa is wide open to them."
In the last several years, China has either struck oil deals or built on existing ones in Angola, Algeria, Chad, Sudan, Equatorial Guinea, Gabon, and Nigeria. More than half of Sudan's oil exports go to China, accounting for roughly 5 percent of its imports.
But trade is not limited to just oil. Chinese stakes have also risen dramatically in infrastructure projects and the mining of precious minerals, including diamonds, gold, and platinum. Trade between Africa and China was at $18.5 billion in 2003, an increase of 50 percent over the previous year. Some analysts believe that could double by the end of next year.
The seriousness of the Chinese purpose can be especially seen in Angola, where a $2 billion line of credit from China's export bank has led to railroad repair, road building, office construction, a fiber-optic network stretching for more than 100 miles, and a stake in oil exploration in shallow waters off the coast.
It is also evident in private companies that have won dozens of contracts here.
On the first floor of an old colonial-era house tucked off the road in this capital, one room seemed like an Internet cafe -- in China.
Seven Chinese citizens typed on computers that flashed symbols in Mandarin. They belonged to the staff of Civil Construction, a Chinese-owned firm that has worked on construction projects for five years in Angola.
''Profit is what we want," said Liu ''Johnny" Jian Wei, 39, the company spokesman in Angola, sitting next to the bank of computers and like the others, dressed casually in jeans and a T-shirt. ''We can make a profit because we have an advantage over other foreign companies -- we work holidays, Saturdays, Sundays, most evenings, and we cost a lot less."
Liu laughed. For him, China's intense courtship with Africa was easy to understand. As China's financial stakes blossom in the world's poorest continent, many others increasingly see the motivations behind the relationship as simple, too: China wants to expand its business reach, especially if it can bring new energy contracts, and Africa dearly needs investment.
''American companies are really missing out in Angola at a time when things are getting better, and your investments are much safer than five years ago," said Filippo Nardin, chairman of the US-Angola Chamber of Commerce, and director of international programs at Citizens Energy in Boston.
''The Europeans are there, and the Chinese are there en masse -- everywhere. It's frustrating because it's very difficult to get American companies interested."
In Angola, the United States remains the country's biggest trading partner largely because of oil contracts, but China is a solid second with bilateral trade totaling $4.9 billion in 2004, a 113 percent increase from 2003.
Overall, roughly a quarter of China's oil imports come from Africa; the United States imports about 15 percent of its oil from Africa now, but that could grow to 25 percent as well in a decade, according to the US National Intelligence Council.
Games, the South African analyst, said that the Chinese interests sometimes conflict with American policy in Africa. One prominent example was an estimated $1 billion in Chinese arms sales to both Ethiopia and Eritrea from 1998 to 2000, which helped fuel deadly border fighting that killed tens of thousands of combatants.
More recent examples include arms sales to Sudan, which remains unable or unwilling, or a combination of both, to stop violence in the Darfur region; the funding of infrastructure projects in Zimbabwe at a time when Western governments heavily criticize the administration of President Robert Mugabe for widespread human rights abuses; and the $2 billion line of credit to Angola, which has made the government far less interested in reforms pushed by the International Monetary Fund to open up the country's books on oil deals.
Several analysts, though, say the benefits of Chinese interests in Africa also have a great potential upside -- it accounts for a major new infusion of foreign direct investment that, outside of oil contracts, remains paltry in the continent. A parade of African leaders has traveled to Beijing this year -- they include heads of state of Zimbabwe, Kenya, and Equatorial Guinea -- and several call the trip to China one of the more important ones in their tenure.
''The Africans are very welcoming of the Chinese," Games said. ''They feel it's easy money. In Angola, in particular, the Chinese don't ask many questions."
Therein, too, say analysts, lies a major potential fault: considering Africa's history of corruption, the access to Chinese money could also easily enrich leaders and buy Chinese influence and access to resources.
In Angola, though, the Chinese export bank did attach some conditions to its $2 billion credit line to Angola, including that Chinese companies receive 70 percent of the contracts.
Angolan officials haven't complained. Finance Minister Jose Pedro de Morais said in an interview last month that his country had earmarked the first $1 billion of the Chinese line of credit in only 19 months, ''and I'm sending a team to Beijing to negotiate the terms of the second billion."
''Through the Chinese, we found a way to rebuild our infrastructure quickly," de Morais said. ''And you know what? The success of these projects has helped normalize our credit relations with other banks. They are ready to expand their lines of credit with us because they can increasingly see a country that has infrastructure that works."
In Angola, Chinese workers are constructing office buildings; housing developments of up to 5,000 units; a new international airport; several sections of railway that fell apart during the country's quarter-century civil war, which ended in 2002; hundreds of miles of roads; hospitals; and schools.
While the country overall may benefit, so does the ruling party, the Popular Movement for the Liberation of Angola, and President Jose Eduardo dos Santos, who next year is expected to call the country's first elections since 1992.
''It's amazing what the Chinese can do," said Issac F. Maria dos Anjos, a member of parliament and the ruling party's election committee. He said Angolan-made cement in 50 kilogram bags costs $10, while China's imported cement costs $4. And the Chinese companies' cost per square meter of construction is a fourth of that of European companies, he said.
''Why would you stop these guys from coming?" dos Anjos said, laughing. ''It absolutely will help the ruling party. We have to build hospitals. We have to build bridges. And we will do a lot of it in just one year" before elections.
But not everyone here welcomes the Chinese. Rumors run rampant. Two widely circulated rumors around the capital were that several hundred thousand Chinese workers were now working around the country, and that many of them were prisoners. Angolan officials and foreign diplomats said the rumors were false; an official at the Chinese Embassy in Luanda declined to comment.
Still, many Angolans are upset that Chinese workers are getting many of the jobs.
''The majority of Angolans don't have work, and we see the Chinese everywhere doing jobs that we should have," said Joao Manuel Osvaldo Pinto, 33, a popular broadcaster at Radio Inglesia, Angola's leading private radio station.
Liu said his company would like to hire more Angolans, but it was difficult to find those with the appropriate skills. The company has 200 Chinese citizens and more than 500 Angolan employees.
''It's not easy to find good carpenters, bricklayers, plumbers, or electricians in Angola," Liu said. ''So we bring over a lot of Chinese skilled workers."
He said the Chinese workers receive about $500 a month, plus free housing. ''To cut costs more, we live together, two or three to a room," said Liu, who has a roommate. ''Europeans here will rent a house by themselves. Not us. And we don't eat out -- we cook food ourselves."
At a housing development about 30 miles south of the capital, in Panguila, Civil Construction has built more than 3,000 small houses in about a year and will build another 2,000 in the coming year. The three-room houses cost $3,000 each; the occupants are those moved by the government out of shanty towns in the capital.
One day recently, teams of unsmiling Chinese workers trudged off the work site in the intense heat, wearing either baseball caps or wide-brimmed conical hats. They was little interaction with the Angolans around them -- except one who nodded to some boys who played and laughed in a large rectangular pool of water, which was used to make cement.
''It's a hard place for us to live," Liu said later. ''We miss our families back home. But it's good business here. It would be even better, but it's difficult for the Chinese to get work visas. If the Angolans really opened the doors to Chinese, you would see many, many more of us."
John Donnelly can be reached at donnelly@globe.com.
boston.com |
