BBC NEWS
China defends its African relations
By Gavin Stamp
Business reporter, BBC News



WANTED: Fast-growing Asian economy would like to meet African nations for mutually beneficial "strategic partnership". Must have large supply of oil or other natural resources.

In the diplomatic equivalent of speed-dating, Chinese Premier Wen Jiabao has just concluded a seven-nation tour of Africa.

He has been sweet-talking his hosts with pledges that China wants to promote development in Africa as well as boost two-way trade.

But there has been criticism of China's sincerity - that its growing economic interest in Africa is based on a search for raw materials to power its economy.

At first glance it is clear that many African countries have benefited from China's frenetic economic growth.

'Common goals'

African-Chinese trade has burgeoned since 2000 and was worth $40bn in 2005 - 35% more than the year before.

African exports to China are rising by more than 50% a year, as its commodity-rich nations have helped satisfy China's demand for oil and raw materials.

China's policy is driven by the search for energy security and secure energy assets
Dr Martyn Davies, Stellenbosch University

But sceptics fear that Beijing's interest in Africa is driven by self-interest and that it is prepared to ignore political, environmental and humanitarian considerations in its search for new markets.

Speaking in Uganda, Mr Wen - the third senior Chinese official to visit Africa in the last six months - said concerns about a so-called "Chinese threat" in Africa were inaccurate and irresponsible.

"The Chinese government, guided by the principle of sincerity, friendship, equality, mutual benefit and common development, is committed to building a new type of strategic partnership with Africa," the Xinhua news agency quoted him as saying.

Economic influence

As well as seeking co-operation in sectors such as textiles, oil exploration and mining, Mr Wen said China was committed to promoting sustainable development and helping countries tackle urgent social problems.

To that end, Beijing is to supply anti-malaria drugs and build new schools in Tanzania, finance a cross-country railway in Angola and help Uganda develop its tourist industry.

China's growing presence in Africa has attracted suspicion from those who believe that it is now pursuing economic gains in the same way that it sought ideological influence thirty years ago.

Beijing points to a pro-active record on aid and debt relief, having given more than $5.5bn in assistance and cancelled the debt of 31 countries.

But its efforts to convince doubters that its vision for Africa amounts to more than simple economic pragmatism has not borne fruit.

Critics say there is a direct correlation between China's relentless economic growth, particularly its huge consumption of energy, and its deeper involvement with Africa.

In the past fifteen years, China's foreign investment in Africa has risen to $850m, while since 1995 China's share of total African exports has risen from just 1% to nearly 10%.

"China's policy is driven by the search for energy security and secure energy assets," Dr Martyn Davies, head of the School of Chinese Studies at South Africa's Stellenbosch University, told the Mail & Guardian newspaper.

"The concentration is on Nigeria, Angola and Sudan. Most of Angola's exports, particularly oil, go to China and Sudan is also moving in this direction."

Commodity windfall

The statistics certainly seem to back up this claim

According to the International Monetary Fund, oil is Angola's sole export while oil accounts for 99% of Sudanese exports.

China now accounts for 65% of total Sudanese exports and 35% of Angolan products sold abroad.

But this increasing reliance on one market is not necessarily a bad thing.

China's growth into an economic powerhouse has pushed global commodity prices to unprecedented highs, significantly boosting the economies of many sub-Saharan countries.

Cheap Chinese imports are a blessing for many African countries while the gradual opening-up of the Chinese economy is providing opportunities for African companies, particularly those from South Africa.

Brewer SAB Miller has invested $400m in China, while paper company Sappi, Absa bank and mining firms Anglo-American and Kumba Resources also have interests there.

But some economists are concerned that the economic dividend provided by China's oil quest will not really alleviate poverty or help tackle countries' most serious problems.

Oil dependence

The OECD argues that some countries could be harmed by their reliance on oil exports since this may prevent diversification into more labour intensive sectors like manufacturing and agro-business.

There is also a real risk, it says, that oil wealth could entrench corruption in countries while natural resources are controlled by a small elite.

"Resource-rich Africa will have to balance the need to match the promotion of job-creating sectors with the desire to capitalise on a windfall gain generated by higher commodity prices," the OECD's Development Centre argues in a new book.

China's continued willingness to do business with Zimbabwe and its opposition to UN sanctions against Sudan for its role in the mass killings in Darfur dismay those who want a balanced approach.

However, the reality is that China's influence in Africa looks set to grow further and some feel it is now seen as a role model by African nations.

"In the past China was poor, but now it is developing fast," says Zhang Xiang, vice president of the China Society of African Studies.

"The African countries are increasingly willing to co-operate with China because they want to find out how China developed so fast."

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/5114980.stm

Published: 2006/06/26 09:59:12 GMT

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