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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (4439)	2/21/2005 2:33:44 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

[The US and Europe are playing new economic imperialists in China, maybe be cultural imperialists too<g>]--"Chinese the New Economic Imperialists in Africa" Business Day (Johannesburg) ANALYSIS February 21, 2005 Posted to the web February 21, 2005 Dianna Games Johannesburg ANYONE travelling around Africa cannot have failed to notice the growing presence of Chinese business and companies. This invasion from the east represents something of a double-edged sword for Africans. Concerns have been raised that African governments are so busy looking over their shoulders for signs of renewed "colonial peril" from the likes of the US and UK that they have missed the onrushing Sino train and its economic imperialist momentum. Indeed, many African countries have welcomed the Chinese, seeing them as a means of lessening dependence on the hoary old enemies in the west. All over Africa, Chinese companies are doing lucrative deals with governments, many of them with major "sweeteners" thrown in - designed to clinch not just the contract being negotiated, but others down the line. For example, in Kenya last month, China's largest listed telecoms manufacturer, ZTE Communications, made a "gift" of equipment worth 144-million Kenyan shillings to Telkom Kenya. ZTE said the company would "continue to play a positive role in Kenya's telecommunications industry". After a gesture like that, it's certain to get a role. Investment company China Export and Credit Insurance Corporation plans to invest $7bn in Nigeria, China's third-largest African trading partner after SA and Egypt, to fund projects in a range of sectors, including oil. China is slowly widening its African oil footprint, with big contracts in Sudan and Angola. But it has sold itself to the Nigerian government by agreeing to invest large sums in nonoil sectors in what analysts see as leverage to secure the oil stake. Zimbabwe is all but owned by China, say many Africa watchers. When President Robert Mugabe saw his biggest critics were also his biggest trading partners and tourism markets, he defensively turned to the east, lauding countries such as China as the true partners of Zimbabwe. In return for a rare hand of friendship in an increasingly hostile world, Mugabe has offered Chinese companies almost anything they want, regardless of the payback. And payback there will be. Chinese telecoms supplier Huawei Investments last year demanded it be guaranteed a portion of Zimbabwe's profits from minerals and tobacco - in addition to a hard cash payment - before it would supply $160m worth of telecommunications equipment for the second fixed-line telephone network. The streets of Harare are awash with cheap Chinese goods, and Mozambique and Tanzania are increasingly in the grip of the Chinese economic expansion. For Africa, it is not only the Chinese ability to undermine local economies through cheap goods - produced mostly without regard to international standards on labour - that presents an insidious problem, but the fact that most of the labour-intensive contracts Chinese companies sign include stipulations that Chinese labour be used. There is nothing essentially wrong with China making inroads into global markets. Everybody tries to do it. What is different here is that some African governments seem to believe it's not strictly a hard-nosed relationship, but one that is altruistically motivated. This is partly the result of China's support for Africa's independence struggles. The Chinese practice of offering "gifts" to smooth the way for later ventures often serves to bolster this perception of magnanimous comradeship. Trade volumes between China and Africa rose 53,9% year on year to $20,5bn in the first nine months of last year, according to the Chinese government. This includes a 33,2% increase in exports to Africa and a 78% increase in exports from Africa to China. While a proportion of this is made up of manufactured goods from SA, it includes crude oil and unprocessed agricultural goods from other African countries - which simply replicates the traditional trading relationships with western countries that are so often criticised by Africa. While some Africans point fingers at SA's "recolonisation" of Africa and attack Europeans and Americans for dominating their economies, quite another dependency relationship is developing under their noses, with the possible exception of SA. There are many benefits to the relationship - China is funding peacekeeping and other such efforts and could be an important champion for Africa in important forums. But the economic and trade relationship needs to be managed properly now to ensure that China's economic strength does not end up ruining the potential for a true partnership in global affairs down the line. - Games is director of Africa @ Work, a company focusing on research, publishing and events in Africa. allafrica.com