Subscribe free to our newsletters via your
. Earth Science News .

Subscribe free to our newsletters via your

Chinese business in Africa breaking free of Beijing

by Staff Writers
Johannesburg (AFP) Dec 12, 2010
Chinese businesses are enjoying increased autonomy and economic freedom to invest in Africa, analysts say, challenging diplomatic perceptions that Beijing is playing puppet master on the continent.

With China's role in Africa the subject of considerable tension with the United States, the reality, according to financial experts, is that the sheer scale of Chinese interests makes overarching control impossible.

"To assume that everyone in Beijing is on the same page is incorrect," said Martyn Davies, chief executive of Frontier Advisory in Johannesburg, an investment firm specialising in emerging markets.

"That somehow there's this grand strategic plan and everyone is directed like pieces on a chessboard, as is often characterised, is not entirely the case."

Chinese capital has poured into countries including Nigeria, Angola, Zambia and South Africa at an intrepid pace over the past decade to capture the continent's natural resources and fuel its booming economy back home.

Bilateral trade rose to 106.8 billion dollars (80 billion euros) in 2008 from 10.6 billion dollars in 2000, at an annual growth rate of more than 30 percent. Beijing claims trade will again top 100 billion dollars in 2010.

"Chinese oil companies have especially significant freedom to operate -- indeed they can sell to the spot market," said Alex Vines, head of the Africa Programme for Chatham House.

"Chinese construction companies are different, but there are so many of them, the government has difficulty keeping track of them outside China."

China's thirst for commodities is matched by Africa's need for electricity, roads and clean water.

According to the World Bank, Africa requires 93 billion dollars a year in infrastructure investment over the next 10 years to ensure its people have access to basic services, making Chinese efficiency attractive to governments.

The result has seen China dole out cheap money to state-owned companies to secure mining rights and infrastructure projects in Africa, outmanoeuvering Western states and local competition.

A diplomatic cable published by the whistleblowing website Wikileaks this week indicated that the United States in particular is irked by China's Africa policy.

The message quoted a senior US official in Nigeria describing China as "a very aggressive and pernicious economic competitor with no morals."

However, many analysts believe Beijing is playing an enabling rather than controlling role, enticing Chinese businesses into Africa through financial perks, without the need to maintain direct links on the ground.

Chinese and African banks have formed joint ventures and other arrangements to stimulate trade.

In 2007, the Industrial and Commercial Bank of China purchased a 20-percent stake in South Africa's Standard Bank for 5.6 billion dollars in cash, at that time the largest foreign direct investment in Africa.

"Chinese firms are not relying solely on Chinese finance to do the kind of business that they're involved in," said Chris Alden, an Africa expert at the London School of Economics.

"They're bidding for and increasingly getting tenders, World Bank tenders or other public tenders ... that are not linked with Chinese financial incentives or interests."

Beijing also arranges contracts where commodities such as oil and minerals are exchanged for infrastructure, something the United States and other Western states have not traditionally done.

Chinese Vice-President Xi Jinping, tipped as the next leader of the communist state, last month spent a week in South Africa, Angola and Botswana lining up such deals.

And as Chinese goods, such as textiles and electricals, perforate African retail markets and trade becomes less commodity-driven, uncovering a Beijing master plan grows increasingly tricky.

"I've got 15 people in the room there who are on the sharp end of Chinese sovereign wealth investment in Africa," said Davies, who broke from a recent bilateral business seminar to speak with AFP.

"They're not these sinister, human rights disregarding, environmentally destructive sort of investors like people make them out to be -- just quite the opposite."

Share This Article With Planet Earth DiggDigg RedditReddit
YahooMyWebYahooMyWeb GoogleGoogle FacebookFacebook

Related Links
Africa News - Resources, Health, Food

Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News

WHO warns of worsening humanitarian situation in Somalia
Geneva (AFP) Dec 10, 2010
The humanitarian situation in central Somalia is expected to deteriorate in 2011 due to poor weather conditions, the World Health Organisation warned Friday. "The La Nina dry weather phenomenon is particularly worrying. La Nina conditions predicted for 2011 practically guarantees a hard season accompanied by flooding which will increase the overall population in crisis," said the WHO. WH ... read more

Clinton Haiti meeting moved due to unrest

Flood-swept Czech town turns disaster into development

A third of displaced Haitians leave temporary camps: IOM

Britain to outsource search-and-rescue ops

Capasso Lab Demonstrates Highly Unidirectional Whispering Gallery Microlasers

Taiwan to approve three billion dollar China plant: report

Tablet computers come of age in 2010 with iPad mania

World's First Microlaser Emitting In 3-D

Search called off for missing crew from SKorean trawler

Freshwater Sustainability Challenges Shared By Southwest And Southeast

More cold-stunned sea turtles rescued

Decline Of West Coast Fog Brought Higher Coastal Temperatures Last 60 Years

Russia plans annual arctic conferences

Greenland Ice Sheet Flow Driven By Short-Term Weather Extremes Not Gradual Warming

It's Time For Europe To Step Up Research In The Polar Regions

Glaciers melting fastest in South America, Alaska: UN

Satellite Data Provide A New Way To Monitor Groundwater In Agricultural Regions

No rice please, we're Indonesians

Forgotten vines help wine makers fight climate change

Wild seeds seen as world crop 'insurance'

New Way Found Of Monitoring Volcanic Ash Cloud

Chavez trades office for tent to aid flood victims

Latin America counts the cost after deadly rains

More than 11,000 people evacuated in Albania floods

EU eyes sanctions against 11 Gbagbo cronies

U.S. mulls north Africa air base

Chinese business in Africa breaking free of Beijing

UN confirms Sudan air raid on border with south

Early Settlers Rapidly Transformed New Zealand Forests With Fire

Lost Civilization Under Persian Gulf

Babies' Biological Clocks Dramatically Affected By Birth Light Cycle

Seeing The World All Depends On Differen Visual Minds

The content herein, unless otherwise known to be public domain, are Copyright 1995-2010 - SpaceDaily. AFP and UPI Wire Stories are copyright Agence France-Presse and United Press International. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by SpaceDaily on any Web page published or hosted by SpaceDaily. Privacy Statement