07/22/2009, 00.00
CHINA – AFRICA
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China’s economic colonisation of Africa

Beijing offers African nations a lot of money on easy terms but in exchange wants raw materials and mining concessions, including exclusive contracts for Chinese companies.
 

Beijing (AsiaNews/Agencies) – China's financing investments in Africa rose from less than US$ 1 billion a year before 2004 to about US$ 7 billion in 2006 and US$ 4.5 billion in 2007, according to the World Bank. Trade between the People’s Republic and Africa surged from US$ 10.6 billion in 2000 to US7 billion last year. China now ranks as Africa's second-largest trading partner behind the United States.

China likes to portray itself as an equal partner (using the 50-50 formula), with a desire to help developing countries. But increasingly voices are being raised in poor countries that all Beijing wants is their natural resources, indifferent of whether benefits are broadly distributed to the population or end up in the pockets of small elites.

Beijing is offering easy loans in exchange of raw materials and natural resources, but this practice is coming under fire for loading down already debt-laden countries with even more debt.

Last year China extended the Congo a US$ 9 billion loan to build railways and dams. Loans will come from China's export credit agency, Export-Import Bank of China, but the work will be done by state-controlled China Railway Group and Sinohydro Corp.

For the International Monetary Fund the deal is bad because it is driving the Congo's debts to dangerous levels.

Chinese investments and loans are certainly fuelling Africa’s economies which jumped by 5.8 per cent in 2007. However, not many local manufacturing and service businesses are emerging, which are crucial for medium and long term development.

At the same time there have been widespread reports about workers in mines, smelters and other operations run by the Chinese being poorly treated, underpaid and forced to accept unhealthy and dangerous working conditions.

In many cases in addition to managers and technicians Chinese companies often bring in their own workers. When this happens local economies benefit even less little from the Chinese presence.

To counter such view China has pointed to the advantages of its offers to African nations.

In fact Western governments and companies have been reluctant to invest in politically unstable African countries.

Angola is one example. In 2004 bilateral trade stood at US$ 4.9 billion. That same year Beijing and Luanda agreed to a loan by China’s Exim Bank. Under its terms Angolan government would get Chinese loans on condition that 70 per cent of public tenders for the construction and civil engineering contracts be awarded to Chinese companies. In return, China gained a regular supply of oil from Angola.

Other countries and international agencies have refused to extend credit to Angola without guarantees that the broader population would also benefit from loans and investments rather than have the money remain among its elites.

As of last year Angola is Africa's biggest trading partner with China at US$ 25 billion; it is also the mainland’s third-largest supplier of crude oil behind Iran and Saudi Arabia.

“Those who oppose Chinese investment . . . . All they need to do is to equal the help we are getting from China,” the late Zambian president Levy Mwanawasa told a business forum in 2007. “We only turned to the East when you people in the West let us down.”

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