China: Trade with Africa transforming the continent

China says its two-way trade with Africa has increased by nearly 45% in a year to hit a record $114,81-billion, highlighting a trend that is transforming the world’s poorest continent.

Beijing said economic ties with Africa recovered from a dip in 2009 due to the global financial crisis and would now grow even faster.

In 1992, two-way trade between China and Africa stood at just $1-billion. But Chinese demand for oil, gas, iron ore and other raw materials for its rapidly growing economy has spurred trade and investments in Africa in recent years.

Critics of the relationship accuse China of failing to create local jobs, flooding markets with poor quality goods and turning a blind eye to human rights abuses in countries such as oil-rich Sudan and diamond-rich Zimbabwe.

But defenders say China is helping create a new class of African consumers and building airports, hospitals, railways, roads, schools and stadiums on the continent – a more concrete return than from previous investors.

The Chinese government report said that in the first 11 months of this year, China-Africa trade volume reached $114,81-billion, a 43,5% year-on-year increase. That growth is likely to gain traction in the coming years as the “economic and trade cooperation is bright” between the two sides, the report predicts.

“As economic globalisation progresses, the economic and trade cooperation between China and Africa will definitely gain momentum to reach a larger scale, broader scope and higher level.”

Beijing is encouraging Chinese companies, flush with cash from the country’s economic boom, to invest in Africa in an effort to diversify an economy driven by exports and investment. China’s investment in Africa has largely targeted oil, gas and mining but is expanding to manufacturing, real estate, infrastructure and other sectors.

Tensions and criticism
But the influx of Chinese investors has brought about tensions and criticism over control of Africa’s resources, worries about unfair business tactics and complaints that local communities get too little of the economic rewards.

In October, two Chinese mine bosses in Zambia were charged with attempted murder after shooting miners during a pay dispute. Chinese companies have invested nearly $3-billion in Zambia, a major copper producer, according to the Zambian government.

While the report did not address local disputes, it defended China’s presence in Africa, saying China abides by equality, mutual benefit and balanced trade and economic cooperation with African countries.

Some experts said Africa’s openness to Chinese investment is partially because its trade does not come with criticism of human rights records and other political issues.

He Wenping, director of African studies at the Institute of West Asian and African Studies in Beijing, said: “African countries also like that Chinese are less critical of their internal political affairs and there’s less bureaucracy so projects and deals are executed a lot faster.”

In 2009, China’s direct investment in Africa reached $9,33-billion with the majority directed at mining followed by manufacturing, the report said, a jump from $490-million in 2003.

Western anxieties over the burgeoning relationship were highlighted by WikiLeaks’s recent release of a US embassy cable in which Johnnie Carson, the US assistant secretary of state for African affairs, said: “China is a very aggressive and pernicious economic competitor with no morals. China is not in Africa for altruistic reasons. China is in Africa for China primarily.”

The memo warned of “tripwires”, asking: “Is China developing a blue water navy? Have they signed military base agreements? Are they training armies? Have they developed intelligence operations? Once these areas start developing then the United States will start worrying.”

‘Good for poor’
Richard Dowden, director of the Royal African Society, described the Africa-China situation as “double-edged.” He said: “They’ve exceeded their prediction quantity of trade. If trade creates wealth, this is extremely good news for Africa. There are millions of Africans who can now afford a shirt or a watch or a radio that they couldn’t afford before. It has been good for poor African consumers but not so good for African manufacturers.

“Infrastructure is good for Africa as well. The problem with these deals is they are untransparent; we don’t know what the deal is. So politically they are not good because of the lack of transparency and the indifference to human rights and democracy.”

Asked if China was beginning to resemble an imperial power, Dowden replied: “There’s no sign yet they are twisting African arms to support them on international issues, but obviously they’re building a lot of goodwill with African governments which they can call on if they need to.

“But are they a colonial power? When you look at the numbers of Chinese people currently in Africa, you could say yes. They are colonising parts of Africa and colonising businesses.”

African governments have defended the ties. On a recent state visit to Beijing, Jacob Zuma, the South Africa president, said: “China is there discussing with the brothers and sisters in Africa to create a mutually beneficial kind of relationship — different from former Western colonialists [who simply took] things by force.” —

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