11/23/2010, 00.00
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China’s road to Africa through financial aid, economic control and political support

Chinese companies are a law onto themselves in poverty-stricken Zambia. In South Africa, Chinese banks are investing in local financial institutions as Beijing provides Pretoria with capital and political support.

Beijing (AsiaNews/Agencies) – “We’re an economy in transition, and we can’t afford to lose the cow that gives us milk today,” said Zambia’s Labour Minister Austin Liato as he described his country’s dependency on China whose presence in Africa is growing by leaps and bounds.

For years, Beijing has invested heavily in Africa, buying minerals, oil, gas and lumber, but also building roads and other infrastructures. It also runs mines and other facilities according to Chinese standards and is now going after local banks and manufacturing.

Chinese investment in Zambia, a nation of 12 million people, reached US$ 1.2 billion over the past year. Nearly two-thirds of it was in new construction involving Chinese-run companies.

Locals, both workers and ordinary Zambians, complain that these “powerful foreigners” are permitted to play by their own rules.

Many remember the 2005 tragedy when 46 Zambians died in an accident at a Chinese-owned explosives factory, which led to a wave of anti-Chinese feelings across the country. Yet, nothing much has changed since then.

The Collum coalmine employs 855 workers, including 62 Chinese supervisors. Native miners work deep underground, hundreds of metres below the surface, in unsafe tunnels without masks to protect them against the coal dust. Some have complained that if they are slow at their work, the Chinese beat them.

Some weeks ago, a group of them protested because of low wages and tried to seize the company’s offices. Two Chinese supervisors shot at them, seriously wounding four. The two men were arrested but later released on bail.

In South Africa, the situation is different. However, even in Africa’s powerhouse, Beijing is trying to expand its economic control.

Last year, China replaced the United States as South Africa’s main trading partner with trade topping US$ 16 billion with China earning a US$ 2.7 billion surplus.

South Africa is Africa’s main economy and exports about US$ 5.5 billion a year in minerals, minerals that China wants.

In mid-November, Chinese Vice President Xi Jinping completed a triumphant three-day visit to the country. Touted as Hu Jintao’s successor, he stressed the growing bilateral relationship between China and South Africa and the “confluence of our interests”.

The Chinese tend to stress that, unlike former Western colonial powers; bilateral cooperation with China is always a win-win situation for African states.

Yet, Beijing has come under attack for its own “economic colonialism”. It is seen as taking oil, gas and raw materials in exchange for money to unrepresentative and oppressive regimes, or engaging in infrastructural development as long as Chinese firms are used, whereas Western governments put conditions on their aid so that it can meet the needs of the population.

South Africa’s Standard Bank, the largest on the continent, is 20 per cent owned by the Industrial and Commercial Bank of China.

For Standard Bank’s Asia chief executive Andrew King, Africa constitutes a huge market to build transportation links (road, railways, and ports) and electrical power plants.

The big advantage Chinese firms have over their counterparts in Brazil and Europe is their “access to financing from policy banks;” companies like the China Railway Construction Corp, which signed a memorandum of understanding earlier this year with Standard Bank to cooperate on funding rail and infrastructure projects in Africa.

Standard Bank also reached an agreement with the China Guangdong Nuclear Power Corp to cooperate on nuclear projects in South Africa.

The World Bank said in a report earlier this year that Africa had to fill an investment gap of US$ 31 billion per year if it was to build the infrastructure it required.

South Africa also wants Chinese political support to join the club of emerging economies, which currently includes Brazil, Russia, India and China (BRIC). However, objections have been voiced to the idea because South Africa’s growth is projected at only 3 per cent this year, hardly the blistering pace of other members.

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