Africa turns to the East

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[align=left]ISN Security Watch (10/05/07)
http://www.isn.ethz.ch/news/sw/details.cfm?ID=17597

Africa turns to the East

Africa, a continent largely written off by many Western governments and
companies as hopelessly corrupt and socially dysfunctional has seen a
dramatic increase in Chinese investment.

By John C K Daly

A recent visit by Chinese President Hu Jintao to Africa stands in stark
contrast to President George W Bush's recent global peregrinations.
Bush has visited Africa only once, in 2003. During the past year,
China's leaders have visited 48 African nations.

Beginning in late January, Hu undertook a 12-day massive round of state
visits to Cameroon, Liberia, Sudan, Zambia, Namibia, South Africa,
Mozambique and the Seychelles, signing bilateral investments and
strengthening ties.

Hu's visit to Africa is significant because it follows closely on the
heels of the Forum on China-Africa Cooperation (FOCAC) meeting held in
Beijing in November 2006, at which Chinese Premier Wen Jiabao proposed
that China and Africa should increase their cooperation and lift
bilateral trade to US$100 billion by 2010. During the period 2000-2005,
Chinese-African bilateral trade quadrupled to US$39.7 billion per year,
while in 2006, Chinese-African trade soared 40 percent from the
previous year, reaching US$55.5 billion. Taking Africa by storm

If Jiabao's projections of bilateral trade by the end of the decade are
realized, Chinese-African trade would be on a par with US-African
trade, which in 2006 was valued at US$91 billion.

In Cameroon, Hu signed grants and loans worth around US$100 million.
According to China's ambassador to Yaounde, trade between the two
countries doubled in 2006 from the previous year to US$338 million.

In Liberia, Hu, accompanied by a 120-strong delegation, signed a number
of agreements, including an agreement to waive 10 percent of Liberia's
over US$50 million foreign debt to China and increase access to Chinese
markets for Liberian products as well as technical and economic
assistance agreements.

In Zambia, Hu focused on the country's mineral resources, signing a
Memorandum of Understanding with President Levy Mwanawasa covering a
wide range of sectors, including increased Chinese investment in the
country's Copperbelt region. Zambia's copper industry, which was
privatized in the 1990s, still accounts for most of the country's
foreign earnings. Zambia is the first African country to have a Chinese
multi-facility economic zone, located in Chambishi, whose projected
US$800 million cost is underwritten by the Chinese business community
and government.

In Mozambique, Hu along with President Armando Guebuza laid the
cornerstone for a center for agricultural research and the transfer of
Chinese technology to be built in Nampula province.

Hu's visit was not limited to agreements on raw materials, however; in
Namibia the Chinese leader's delegation signed a contract between
Namibia's Contract Haulage and China's state-owned First Automotive
Works to produce automobiles for the domestic market. Namibian
President Sam Nujoma said of the agreement, "The initiative complements
our government's efforts to fast-track the industrialization of our
national economy and enhance the living standards of all Namibians."

Since establishing diplomatic relations in 1998, by 2005 China has
become South Africa's second-largest trading partner. The trade is
lopsided, however; South African officials note that currently South
Africa's investment in China of about US$400 million far exceeds
current Chinese investment in South Africa.

Oil topped Hu's agenda in Sudan, the most controversial stop for the
Chinese leader. Hu sidestepped the issue of Darfur in his talks with
Sudanese President Omar al-Bashir, and instead promised to cancel US$80
million in Sudanese debt to China, construct a new US$1.15 billion,
758-kilometer-long railway line linking Khartoum with Port Sudan and
provide a US$13 million interest-free loan to construct a new
presidential palace.

Al-Bashir and Hu signed seven agreements in all, including a US$4.48
million humanitarian aid assistance grant for Darfur.

While in Khartoum, Hu visited the 100,000-barrel-a-day Khartoum oil
refinery near the village of Aljaili, just north of the capital, in
which the China National Petroleum Corp has a 50 percent stake. Since
2000, Chinese investment in Sudanese oil production and pipelines has
allowed the country's crude output to rise more than 500,000 barrels a
day, with Sudan now supplying China with about 8 percent of its oil. In
relentless pursuit of hydrocarbons

China's interest in Africa is overwhelmingly driven by its interest in
exports, particularly of hydrocarbons. According to the International
Monetary Fund, oil accounts for 99 percent of Sudanese exports, with
China accounting for 65 percent of total Sudanese exports. Energy is
Angola's sole export hard currency earner, with China now accounting
for 35 percent of Angolan exports. In 2006, Chinese-Angolan trade
reached an annual turnover of US$11 million.

In its relentless pursuit of African hydrocarbons, China is also
receiving oil from Angola, Chad, Gabon and Nigeria. Africa now supplies
one-third of China's oil imports. According to Chinese government
statistics, in November 2006, Sudan was China's fourth-largest source
of crude imports, while bilateral trade for January-November 2006 stood
at US$2.9 billion, behind only South Africa and Angola. China has been
involved in the Sudanese petrochemical industry since November 1996 and
the China National Petroleum Corporation now has 20 projects in nine
African countries.

CNPC's most recent African energy venture dates from last November,
when it began drilling the Saha-1 wildcat well at its Tenere block in
Niger, where previous operators have come up dry. In September 2006,
CNPC also started exploration and development projects in Algeria and
Mauritania.

CNPC is also expanding its presence beyond sub-Saharan Africa to the
Magreb. Four months ago, Sonatrach's Abdelhafidh Feghouli and CNPC vice
president Zhou Jiping signed a cooperation agreement during a state
visit by Algerian President Abdelaziz Bouteflika to China. CNPC is
interested in building a 15-million-tonne per year greenfield refinery
at Tiaret in western Algeria. In May 2005, the company won a US$385
million contract to build Sonatrach's 5-million-tonne per year
condensate oil refinery in Skikda province. On a cultural level, China
and Egypt have agreed to establish the Confucius Institute in Egypt's
Cairo University.

Hu's recent visit was his second to the continent in just nine months
and the third since he assumed office in 2003.

Another policy divergence has been noted on the African continent. US
Secretary of Defense Robert Gates announced during congressional
testimony on 6 February that the US military would establish a separate
US Africa Command to oversee military operations on the African
continent, and now more than 3,000 Chinese forces are involved in UN
peacekeeping operations in Africa, in Liberia and Sudan. In January,
Beijing announced that it was sending 435 troops to Sudan to replace
its peacekeepers first deployed there in May 2006.

Since 1956, China has provided educational assistance to 50 African
nations, bringing 18,000 Africans to study in China on scholarships
while building laboratory facilities at 21 African universities. China
now has diplomatic relations with 48 out of the 53 countries on the
African continent, with approximately 800 Chinese firms operating
there. Since 2002, Chinese-African trade has tripled, while Beijing has
cultivated extensive personal ties by training over 6,000 African civil
servants and are sending more than 15,000 Chinese doctors to 34 African
countries.

Another broad area due for improvement following FOCAC initiatives is
tourism.

After the Second Ministerial FOCAC Conference in 2003, Uganda,
Madagascar, Botswana, the Kingdom of Lesotho, Namibia and Ghana
acquired the Chinese government's approved destination status (ADS) for
Chinese tourists, which after the November 2006 FOCAC meeting was
extended to Algeria, Cape Verde, Cameroon, Gabon, Rwanda, Mali,
Mozambique, Benin and Nigeria, for a total of 26 ADS countries in
Africa. Human rights vs business

China has received harsh international criticism for its pragmatic
approach to Sudan because its energy interests negate international
efforts to mitigate the massive human rights crisis in Darfur.

In February 2003, marginalized ethnic African tribes in Darfur took up
arms against the Arab-dominated government in Khartoum in a quest for
greater rights and at least some share of the region's oil wealth. The
government responded by unleashing an Arab militia, the janjaweed,
which embarked on a merciless "counterinsurgency" campaign, burning
villages to the ground, slaughtering ethnic African farmers, including
women and children, raping women and stealing livestock, though
Khartoum denies any connection with the janjaweed.

Human rights groups are seeking to pressure Beijing over its hosting of
the 2008 summer "genocide" Olympics. On 7 May, Amnesty International
released a report charging that both China and Russia have supplied
aircraft and weaponry that Khartoum has used in its assaults in Darfur,
including 12 MiG-24 helicopter gun-ships and six K-8 attack aircraft,
violating a 2005 UN resolution banning such transfers. That year, AI
charges, Russia supplied Khartoum with nearly US$35 million in air
assets, while China provided US$57 million in aerial equipment and
US$24 million in other arms. Both Moscow and Beijing have replied to
the charges using the specious argument that they have not supplied
armaments to any "regions" under UN embargoes.

Additional foreign concern is expressed over Beijing's relations with
Zimbabwe's dictator Robert Mugabe, whose increasingly repressive
policies toward the country's democratic opposition is generating
rising international alarm.

Despite such unease, China's new ambassador to Zimbabwe, Yuan Nansheng,
predicted after taking up his post that trade between Zimbabwe and
China, currently estimated at US$258 million a year, would rise to
US$500 million by 2008, saying, "The steady growth in the economic
field between our two countries aims for a win-win result to everyone's
benefit."

China has reacted defensively to such concerns, stating that it has
supported African liberation movements since 1956 and has no colonial
or military designs on the continent and was interested only in trade.

Last year, Chinese ambassador to South Africa Liu Guijin told an
African business leaders forum in Johannesburg that Beijing was
emulating the policy of Zheng He, the famous 15th century Chinese
navigator, who traveled to more than 30 countries in Asia and Africa,
saying, pointedly: "Zheng He took to the places he visited tea,
chinaware, silk and technology. He did not occupy an inch of foreign
land, nor did he take a single slave. What he brought to the outside
world was peace and civilization […] this peace-loving culture has
taken deep root in the minds and hearts of Chinese people of all
generations." Not everyone has open arms

But not all welcome the Chinese with open arms. Rebel movements across
the continent are targeting foreign oil workers, including Chinese,
charging that they are exploiting their natural resources.

In January, militants abducted nine Chinese oil workers and five
telecommunications workers in Nigeria. All were later released
unharmed. On 20 March, gunmen kidnapped two Chinese workers in the
southern Nigerian state of Anambra; they also were later released
unharmed. In all, since the beginning of the year, 16 Chinese workers
have been kidnapped in Nigeria. In February, a Chinese engineer was
killed in an attack on a Chinese stone materials plant in Kenya.

In the most recent incident, on 24 April, Ogaden National Liberation
Front guerrillas attacked a Sinopec oil facility in Abole, about 120
kilometers from the regional capital, Jijiga in eastern Ethiopia,
killing 68 Ethiopian workers and nine Chinese and kidnapping seven
Chinese technicians, who were released five days later.

While a China Daily editorial urged that the government should give
Chinese citizens who go overseas as workers, investors or tourists
"appropriate protection," in reality there is little in the short-term
that the Chinese government can do, especially if its subjects go to
politically volatile areas.

Global oil production currently stands at about 84 million barrels per
day (bpd); the US imports about 20.7 million bpd. But China, with more
than 6.5 million bpd of imports has surged past Japan since 2003 with
its 4.19 million bpd to become the world's second largest importer of
petroleum. During 2001-2004 one in four barrels of new oil discovered
outside of the US and Canada came from Africa, with some projections
stating that Africa will supply 30 percent of the global growth in
hydrocarbon production within the next three years.

In the absence of viable alternatives, Beijing would seem to have
little choice but to attempt to cope with Africa's volatility in the
short term. As long as Beijing studiously ignores the rising unrest
resulting from the rampant graft and corruption generated by oil
revenues, it seems likely to continue to make its citizens and
investments increasing targets for those seeking social justice.

[Dr John C K Daly is a Washington DC-based consultant and an adjunct
scholar at the Middle East Institute.][/align]