China is a serious new player on the African block

May 10, 2005 02:00 AM

Like it or not, there’s a serious new player on the African block -- and while analysts quibble the pros and cons, China is making a bold push into Africa as it looks to secure access to the continent’s vast natural resources and untapped markets.
There is no doubt that China’s rekindled interest in Africa is spurred to a large degree by its mounting appetite for raw materials, especially oil. As China's economy surges ahead and its energy requirements rise exponentially, areas like West Africa, Sudan and even Libya have become key focus areas for Beijing.

China’s oil operations in Africa put it in direct competition with western oil giants, whose high-handed methods have at times irritated their African hosts in the past. This could make for some interesting exchanges as the US starts feeling a threat to its economic and security interests in the region.
Energy analysts warn of growing conflict between Western and Asian countries as they seek to outbid each other for key hydrocarbon assets in Africa. Already, China is locking in long-term contracts with Nigeria and Angola -- which already supply it with as much oil as Saudi Arabia -- while China’s state oil group, CNPC, owns 40 % of Sudan’s Greater Nile crude project and is looking at projects in possible new oil sources such as Niger.

There is far more at stake for China than just fuel, though. The country is rapidly forging economic, political and military alliances across the continent as it looks to chart its rise as a global superpower - and by courting developing countries, it is cleverly ensuring markets for its products in the years to come.
In Nigeria, China is rebuilding the rail network. In Rwanda, Chinese companies have paved most of the country’s main roads. In Gabon, it is refurbishing ageing oil fields in return for a steady flow of Gabonese oil. Across the continent, Chinese companies are prospecting for oil and gas, rebuilding infrastructure and running businesses.
China is also keen to tap into the continent’s best brains. South African refiner Sasol's strong refining and gasification infrastructure will be vital to China's future development, particularly Sasol’s coal liquefaction methods, which seek to form oil from coal. China has about 1 tn tons of coal reserves, and is already collaborating with Sasol to transfer some of its technology to the Far East.

On the face of it, this is good news for Africa. The potential for increased foreign direct investment from China is welcome, as is the reduced reliance on the West. But the continent’s leaders will have to tread very carefully to ensure that they don’t sell their peoples’ birthrights for a jumble of soft loans and political promises.
What’s more, China has shown a disturbing appetite for doing business with some of Africa’s most brutal and crazed regimes -- Sudan and Zimbabwe, to name but two -- with little thought given to establishing cultures of human rights and good governance. China's deputy foreign minister, Zhou Wenzhong, is on record as saying that China will pursue its oil interests in Africa without political restrictions or concerns... "the country tries to separate business from politics."

That’s all very well, but the fear is that the "Chinese way" of doing business, especially in the oil industry, will do little to boost NEPAD’s aims of fighting corruption on the continent and delivering benefits to ordinary Africans.
Some analysts go so far as to suggest that the Chinese are much more prone to doing business in a way that the West does not accept, paying bribes and "bonuses" under the table. This is simply disingenuous. As anyone involved in the oil industry will know, this kind of behaviour unfortunately comes with the territory, and is certainly not restricted to Chinese businesses.

Ultimately, China’s involvement in Africa is no better or worse for the continent than that of the West. Indeed, for the time being, Africa is probably doing better from its Asian alliances than from its former colonial masters.
Either way, it’s up to our leaders to get with the spirit of NEPAD, and sign deals which make a difference for all Africans, and not just a select few.

Source: Business in Africa
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