Chinese trade with Africa keeps growing; fears of neocolonialism are overdone – by The Economist (March 23, 2013)posted in Asia Mining, Canadian/International Media Resource Articles, Commodity Super-Cycle and Decline |
A GROUP of five tourists from Beijing passes low over Mount Kenya and into the Rift Valley in their private plane before landing on a dusty airstrip surrounded by the yellow trunks and mist-like branches of fever trees. They walk across a grassy opening where zebras and giraffes roam, snapping pictures while keeping an eye out for charging buffaloes. When they sit down at a table, they seem hungry but at ease. “Last year I went to the South Pole with some friends,” says one of two housewives, showing off iPhone pictures of a gaggle of penguins on permafrost.
Chinese are coming to Africa in ever greater numbers and finding it a comfortable place to visit, work in and trade. An estimated 1m are now resident in Africa, up from a few thousand a decade ago, and more keep arriving. Chinese are the fourth-most-numerous visitors to South Africa. Among them will be China’s new president, Xi Jinping, who is also going to Tanzania and the Democratic Republic of Congo on his first foreign outing as leader.
The origin of China’s fascination with Africa is easy to see. Between the Sahara and the Kalahari deserts lie many of the raw materials desired by its industries. China recently overtook America as the world’s largest net importer of oil. Almost 80% of Chinese imports from Africa are mineral products. China is Africa’s top business partner, with trade exceeding $166 billion. But it is not all minerals. Exports to Africa are a mixed bag (see chart). Machinery makes up 29%.
The size of China’s direct investment in Africa is harder to measure than trade. Last summer China’s commerce minister, Chen Deming, said the number “exceeded $14.7 billion, up 60% from 2009”. Around the same time the Chinese ambassador to South Africa, Tian Xuejun, said: “China’s investment in Africa of various kinds exceeds $40 billion.” Apparently, the first figure is for African investments reported to the government. The second includes estimates of Chinese funds flowing in from tax shelters around the world.
Sino-African links have broadened in the past few years. The relationship is now almost as diverse as Africa itself. But Mr Xi will search in vain for the e-mail address of a single African leader who can speak for the rest, rather as Henry Kissinger legendarily struggled to find a single phone number for Europe.
Until recently China concentrated on a few big resource-rich countries, including Algeria, Nigeria, South Africa, Sudan and Zambia. But places like Ethiopia and Congo, where minerals are scarce or hard to extract, are now getting more attention, not least as more Chinese businesses branch out into non-resource sectors. State-owned companies compete with private firms—both tempted by margins often far higher than at home. Young Chinese private-equity funds are also coming to Africa.
For the rest of this article, please go to The Economist website: http://www.economist.com/news/middle-east-and-africa/21574012-chinese-trade-africa-keeps-growing-fears-neocolonialism-are-overdone-more