Iron clad: mining partnerships with Chinese firms in West Africa

Partnerships between Chinese and western firms in West Africa could prove beneficial for companies and host governments, but only if the partners are a good fit

In recent years there has been an increasing trend of western multinational companies turning to Chinese partners to seek investment. This is particularly evident in the capital constrained mining industry where partnerships have provided western firms with access to Chinese project finance.

However such partnerships have also led to lengthy delays and may present reputational risks. This article highlights why West Africa has been a particularly fertile home for these relationships and some of the key partnerships have fared. Based on the experiences of these firms their chief concern should be getting to know their partner before it is too late.

Falling commodity prices and a tough political environment in West Africa have soured investor perception of mining projects – despite a number of high quality reserves of iron ore – forcing Western firms to look elsewhere for investment. The major reserves in West Africa tend to be some distance from the coast meaning expensive infrastructure must be built to export the metal. Chinese firms have experience constructing railway and port infrastructure at low cost, and despite the recent slowdown in China’s manufacturing sector, China remains the world’s largest consumer of iron ore. Therefore securing supplies remains a strategic priority for Beijing.

Complementary characteristics

For a Western firm the key benefits of a partnership are access to Chinese state finance and cheaper procurement and construction costs. These benefits are more likely to be enjoyed where the Chinese partner is a major Chinese State Owned Enterprise (SOE), which have closer relations with government and often bring with them a wide array of subsidiaries and affiliates able to provide low cost equipment and supplies.

For a Chinese firm, the experience of the western partner operating in that country or region negates the need to build their own relationships and understanding. Chinese companies have struggled to win major mining concessions outright, demonstrated by the fact that there are no major wholly owned Chinese mining projects in the region. By strengthening their knowledge and credibility through partnerships, Chinese firms may also increase their future chances of winning concessions.

For a West African government under pressure from its electorate (or elites) to get projects off the ground a Chinese SOE may also be more likely to push development than a western firm. A Chinese partner under pressure from Beijing or a steel making partner is, like the government, under pressure to produce quickly. If Beijing sees a project as being particularly strategically significant it may also lobby a host government on the project’s behalf, possibly offering development finance or even debt cancellation. In general terms Chinese development finance closely follows its business relationships.

International as well as national stakeholders, such as shareholders and NGO groups, may also pressure a western firm not to accept a Chinese partner. Smaller privately owned Chinese firms have a poor reputation for their labour practices and quality of goods and services. In Ghana, recent controversy around small scale Chinese mining firms engaged in gold mining has prompted a national reaction against China and Chinese firms. International investors may also be put off. For example if a company was to partner with a Chinese SOE with a defence arm, this could prompt criticism from socially responsible investors and human rights NGOs.

Has it worked in practice?

Four recent partnerships in West Africa between western and Chinese firms have enjoyed varying degrees of success. The most high profile of these has been the Simandou project in the Forestiere region of Guinea which is jointly owned by Rio Tinto, Chinalco, the government of Guinea and the IFC. For Rio Tinto and Chinalco (a large SOE) the partnership was the result of long running discussions as to how the firms could best complement each other. The partnership at Simandou has secured significant investment for Rio Tinto, and has reportedly helped to cut procurement and construction costs.

African Minerals in Sierra Leone has three such partnerships at its Tonkolili project. The company received a first tranche of investment from China Railway Materials (CRM) to develop the first phase, and then brought on Shandong Iron and Steel Group (SISG) to provide a larger injection of capital to further expand the mine. While development has been slower than hoped the company recently brought in a third partner (in late September 2013), Tianjin Materials and Equipment Corporation (Tewoo). Rather than partnering with a fellow mining firms African Minerals partnered with: a potential customers in SISG (the state steel producer of Shandong province), and Tewoo (a metals trader); and a potential infrastructure service provider in CRM.

However not all experiences have been as positive. The slow Chinese approvals process has caused considerable impact on the fortunes of Sundance Resources. Hanlong Group, a politically connected but privately owned Chinese conglomerate seemed likely to conclude a takeover in early 2013, but after 21 months of negotiations and doubts over the extent of Chinese state support for the takeover, Sundance was forced to pull out of the deal.

Bellzone’s Kalia project partnership in Guinea with China International Fund (CIF) has also failed to perform as expected. Little progress has been made on the project since the deal was signed in 2011 and CIF has been criticised by the government for illegitimately acquiring concessions under the former military government. CIF has also been criticised by Global Witness for allegedly funding Zimbabwe’s secret police force in exchange for diamonds and access to business opportunities. CIF denies any impropriety in both cases.

Securing investment from a Chinese firm may speed development of a project and reduce costs, but only if the right partner can be found. In order to protect against negative impacts it is vital to gain a strong understanding of the partner organisation. The due diligence process is likely to be challenging as Chinese firms often have a limited public profile. In general terms the larger state owned companies are more likely to be able to access state funds and support. However this is no guarantee of success and therefore it is important to take adequate time to examine whether strategies are aligned, who a company’s affiliates are, what level of support they have from the state, and whether they have any skeletons in their closet which might be criticised by investors or NGOs.

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News round-up: 07 September 2013 to 13 September 2013

CAN comment: This article quotes journalists who previously worked for Chinese state owned CCTV news in Africa who claim that they were encouraged to: report positively on China; to ignore countries such as Swaziland that have diplomatic relations with Taiwan;  to ignore Chinese demand for ivory could not be mentioned in stories about Africa’s poaching crisis; and to avoid human-rights questions in an interview with an authoritarian African leader. While this may be predictable, if this is true African governments need to be very careful about how much of their domestic media falls into the pay of China.

CAN comment: Western companies have often complained that Chinese firms in Africa do not compete on a level playing field due to corrupt practices and support from the Chinese state. Bilateral trade and investment has steadily risen between China and Nigeria in recent years but not without controversy. Chinese telecoms provider ZTE comes under particular criticism in this article for its failure to adequately deliver adequately on a contract (apparently including surveillance equipment) for the police force, the investment for which was provided by Chinese state loans. Chinese firms standard do seem to be on an upward trajectory in Africa overall, but occurrences such as this one will see China struggle to shake off an association with poor quality goods, both in Africa and abroad.

CAN comment: ZTE has aslo faced government criticism in Zambia under almost identical circumstances. Again the controversy regards a contract for the installation of a surveillance system for a government department, this time the home office. In this case the Zambian government have cancelled the contract with ZTE after suspicion of corruption. The contract was never put out to tender and critics have alleged that costs were vastly inflated.

CAN comment: Chinese state owned resource firms continue to make high profile investments into western run projects in Africa. Sinopec’s decision to invest in US based Apache energy’s Egyptian assets may also have interesting implications for China’s role in international dialogue on Egypt. While Apache’s operations lie in “remote, unpopulated areas that are unaffected by political events in the region”, China has proved far more active politically in countries in which it has significant resource interests.

CAN comment: Adding to last week’s comments on the increasing trend of partnerships between western miners and their Chinese customers in Africa, this story shows the difficulties of developing mining projects in Africa, even with Chinese financing. African Minerals secured investment from it’s partner Shandong Iron and Steel (SISG) on the condition that it met tough production targets. Missing its target has resulted in a charge for African Minerals, and despite a sympathetic approach from SISG, African Minerals’ share price has fallen.

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News round-up: 30 August 2013 to 06 September 2013

CAN comment: Increasingly its not state-owned but private Chinese companies which are investing in Africa. For the moment many of these companies are motivated by opening new markets above all else. However as one entrepreneur points out lower labour costs are also attractive meaning importing Chinese labour now makes little sense. “We have to pay Africa workers just 330 yuan a month, around a tenth of the 3,000 yuan we would have to pay a Chinese worker. The fact is that if we buy just one plane ticket for a Chinese worker to Africa and back, it would pay for about five local workers for the year.”

CAN comment: Great interview with China’s special representative on African affairs speaking about a wide range of China-Africa topics and providing fascinating answers. It’s very much worth a read and unusually candid for  Chinese official. One highlight for me on the myth of China Inc., “It is impossible to co-ordinate all these things, even if we wanted to. China is a developing country. The government in Beijing sometimes appears very capable, but in fact when we have tried to control foreign investment and trade we have found that it is impossible.”

CAN comment: This type of partnerships is becoming popular in Africa as western mining companies partner with Chinese customers for their product (e.g. an iron ore miner with a steel producer) to secure investment for fledgling projects in exchange for discounted off-take from the mine once operational, and often a stake in the mine. Western banks and funds have proved unwilling to invest in African mining in recent years, especially in an environment of falling commodity prices. Therefore these partnerships provide a neat solution for western firms seeking finance to get their projects off the ground.

CAN comment: This article is partly included for the amazing audacity of naming a coal mining and power generation firm China Africa Sunlight Energy. Comical name aside, this is a very large investment and while coal is not an ideal fuel for African countries to establish their power networks on (from a global perspective), like most of Africa Zimbabwe has a crippling deficit in electricity production and very low CO2 emissions per capita. Therefore it is difficult to argue that coal power electricity generation is not a sensible course for the country.

CAN comment: While the total sum of this donation from China to Kenya to fight poaching is small, it represents an important trend of Beijing directly addressing international criticism of its conduct. While China is unlikely to take responsibility for poaching issues in Kenya and East Africa more generally, this donation demonstrates that Chinese politicians and officials are at least sensitive to international complaints about its market for rare animal parts.

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News round-up: 20 August 2013 to 29 August 2013

CAN comment: Possibly the most significant development in the Sino-Africa relationship in recent years is the news that the USA is now exporting oil to China, and therefore will no longer be competing as a customer for Africa’s oil, but as a competitor to African oil exporters for China’s market. The US’s new found energy self-sufficiency resulting from its increased exploitation of shale oil and gas in the US may result in significant policy changes in Africa as its energy security concerns diminish.

CAN comment: East Africa has a long relationship with China (Admiral Zheng He in the early 15th century and the Tazara railway in the 1970s are particularly noteworthy) and the relationship has in recent years grown stronger. The large oil and gas finds in the region and access to Asia across the Indian Ocean makes China a natural trading partner. While resources are important to this partnership, China has also been able to provide significant infrastructure support, particularly in road building and telecoms. More recently there has been considerable activity in the railway construction as Chinese companies are financing and building railways in Uganda, Rwanda, Kenya, Ethiopia and Djibouti, helping to connect the countries as well as to provide a export route to the coast.

CAN comment: Kenya’s President Uhuru Kenyatta visited China in August cementing relationships with senior leaders in Beijing and seeking further investment. As well as speaking about the traditional areas of cooperation such as infrastructure, resources and manufacturing Kenyatta placed considerable emphasis on the tourism sector. China’s tourists present a significant opportunity for African countries to establish a more diversified economy. According to Kenyan Ministry of Tourism, over 40,000 Chinese tourists visited Kenya last year, an increase of 10.4 percent compared with 2011.

CAN comment: While the world’s major mining firms seek to curtail their expenditure and sell off under-performing assets, Chinese gold mining companies have been steadily increasing their market share. Firms such as Zijin Mining Group, the world’s seventh-largest gold company by market value, and Zhaojin Mining Industry are monitoring various companies and assets and considering their options. Under these monopsony conditions there may well be bargains available for savvy Chinese buyers looking to grow their portfolios in Africa and elsewhere.

CAN comment: This article provides an interesting case study into the difficult relationships that exist between immigrant Chinese communities and local inhabitants in many countries in East Asia and increasingly Africa. This is an issue of increasing importance, especially where immigrant Chinese are running businesses that local populations feel should be reserved for their own. African governments should seek a stronger understanding of how these relationships affected countries like Indonesia, Thailand and Malaysia as they seek to maximize the positive impacts of Chinese immigration.

CAN comment: Cheap labour, access to manufacturing inputs and preferential tariff relationships have made African countries attractive places for Chinese companies to move manufacturing businesses. Furthermore Chinese firms and government have helped to break down other barriers to African manufacturing, such as helping to build improved power and transport infrastructure. While local populations are often angered by Chinese encroachment in industries such as petty trading or artisanal mining, it is important to note that entrepreneurial Chinese migrants have also brought with them precious potential for economic growth.

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News round-up: 27 July 2013 to 03 August 2013

CAN comment: This article highlights the apparent risk that African countries have taken by allowing Chinese telecoms provider Huawei to build their communications infrastructure. The article posits that the Chinese government will be able to use in built ‘back doors’ to snoop on Africans. Considering recent revelations in the US about relationships between major US companies and the NSA it seems Africans will have a tough choice to make in deciding who they would prefer spying on them.

CAN comment: Liberian peace keeping and state building has long been a key concern of Western governments in Africa, and President Johnson-Sirleaf of Liberia has been held up as an example to other African leaders, by the West. Therefore it is interesting to read here about the role the Chinese have played and continue to play in the UN’s peace keeping mission to the country. While China has its own bilateral relationships it has been taking an increasingly prominent position in multinational bodies.

CAN comment: Unlike in Liberia, China’s close relationship with Zimbabwe is not shared by the West. China’s attitude to the recent elections in the country are instructive in explaining why Africans sometimes prefer China’s ‘non-interference’ to the West’s hectoring. China presents itself as a willing partner happy to work with whoever the people select, while Western countries have made it clear that they do not accept the legitimacy of an election which Mugabe wins. This rankles many Africans who lionize Mugabe for his role in the African independence movement, and resent US and Europeans attempting to influence the result.

CAN comment: This article from China Daily’s new African service interestingly advertises/comments on Foton motors efforts to crack the tractor market in Africa. This is the first example I have seen of China’s increasing media presence directly supporting Chinese firms. Foton has been selling tractors in Sudan and Angola but also providing after-sales services sending technicians out to farms to do training and repairs. One such technician Fan Ziqing said, “The days were scorching hot, and often we didn’t have enough food or water. It was common to work through the night. But the smiles on the farmers’ faces when problems with their equipment were solved drove all the exhaustion away.”

CAN comment: As well as its media presence China  has been devoting effort to cultural and scientific exchanges with Africa. This project supports developing countries in areas of key relevance such as climate, water, biotechnology, green technology and space technology for disaster mitigation. Yongqiang Liu, a meteorologist said of the program, “it is critical to prepare future leaders to lead climate change research for developing countries”.

CAN comment: This story from Uganda involves a Chinese loans company offering to re-finance the debts of a large proportion of Uganda’s MPs, who are on the verge of bankruptcy after taking out loans with local moneylenders.  The money lenders interest rates are at 30% while the Chinese company is offering 6%. However the Ugandan intermediary organizing the deal wants guarantees from government in order to agree the deal, and before revealing the name of the company.

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News round-up: 13 July 2013 to 19 July 2013

CAN Comment: East Africa’s regional integration project includes rail and pipeline projects, identity cards and customs union, but the rail project being managed from Uganda has run into confusion. Four Chinese construction firms are in competition for the lucrative construction contracts and have signed agreements with different branches of the government, creating a risk of delays and litigation. This is a good example to debunk the myth of a China Inc. controlling all Chinese actors on the continent.

CAN Comment: At the crux of the questioning of China’s role in Africa is whether it is a positive relationship for the continent. Generally a lot is made of the differences between Chinese and Western investment and engagement, but generally they are driven by the same goals and they invest in similar industries. The really significant and yet under-realised difference is the one pointed out in this article, that China has the potential to help Africa industrialise in a way that the West does not. If the potential of the relationship outlined in this article can be realised, then the question of whether China was good for Africa might be given a definitive answer.

CAN Comment: This story provides hope that both the Nigerian government led by well-respected Minister of Finance, Dr. Ngozi Okonjo-Iweala, and the Chinese government in the form of  the China Development Bank  (CDB) and the China Africa Development Fund (CAD Fund), understand the potential for China to catalyse industrialisation. As China seeks to re-balance it economy over the coming years it might present opportunities for manufacturers in Africa, if supported by their governments.

CAN Comment: There has been a lot of Chinese attention on Sierra Leone in recent weeks as President Koroma has visited China. Among the projects announced are  a $1.5 billion rubber plantation project, an energy and mining project worth $6.5 billion, and the much-talked about new airport deal said to cost $300 million (which for anyone who has visited Freetown’s current airport will be welcome news). There are also plans to build an industrial city near the site of the current airport in Lungi. As part of the typical Chinese charm offensive Sierra Leonean ministers have been on a tour of Chinese cities to build their capacity in urban planning.

CAN Comment: Interesting article from a government banned website in Zambia highlighting the increasing Chinese media presence in the country, and also Zambian President Micheal Sata’s increasing borrowing of oppressive techniques from China. Sata swept to power on an anti-China mandate, but quickly warmed to Beijing after his election, and has recently been forging closer relations.

CAN Comment: Interesting article from a Chinese news source on the need for greater international cooperation to end ivory smuggling. There has been a lot of work done in East Africa to educate local populations on the negative impacts of poaching, but there now needs to be an increasing focus on buyers in China. Schemes underway are focusing on Chinese tourists, but also using the media to build awareness.

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News round-up: 22 June 2013 to 28 June 2013

CAN comment: The big story last week was certainly President Obama’s visit to Africa, and unsurprisingly much of the coverage focused on competition with China. As this article rightly points out, Obama came to Africa with a legion of US businessmen, and while his rhetoric was on good governance there was also an unmistakable commercial lilt to his messaging. I for one feel there is little reason for competition between China and the USA in Africa, as the two powers want and provide different things. Energy has traditionally been the US’s main strategic interest in Africa, but unconventional oil and gas reserves at home have made Africa’s reserves much less important. However at times the western media seem unable to escape the rhetoric of the Cold War.

CAN comment:  Very significant move by China to send combat troops to Mali. The non-interference policy has proved more and more difficult to justify in recent years as China’s strategic interests have widened. While China provides more troops to peacekeeping missions than any of the other security council members, and combat troops had been deployed previously to protect engineers and medical forces, as this article points out the public announcement  is significant.

CAN comment: The Chinese government has come down very firmly on the side of the Ghanaian government in the on-running issues with Chinese illegal miners in the West African country. Chinese Ambassador to Ghana Gong Jianzhong said “Chinese in Ghana should always abide by the laws of the country, operate their businesses within the boundary of the law and stop illegal mining activities.”

CAN comment: Counterfeit drugs pose a terrible danger to the health of their consumers, but they also cause serious reputational damage to China. Like illegal mining, the existence of dangerous counterfeit medicines exported from China to Africa has been known about for some time. One hopes that it will not take a ‘tainted-milk’ type disaster in order for China to take the issue seriously, because Beijing should recognize that the cost of regulating the industry is less than the potential damage to its reputation.

CAN comment: The drawback of the negative perceptions created by substandard and counterfeit drugs (or electronics) is that legitimate Chinese industries are tainted by association. Foton are seeking to assemble their cars in Uganda for the African market, creating employment and offering a significantly lower cost than imported alternatives. However poor perceptions of Chinese products mean consumers will have to be won over. If Beijing feels that the success of its industries in Africa is at risk as a result of poor reputation created by petty traders it may make more effort to clamp down on the poor practice that concerns Africans.

CAN comment: Angola and Mozambique are strategically important for China due to their large reserves of oil, gas and coal. In order to spur investment the Chinese government has set up  fund with with the China Development Bank and the Macau Industrial Development and Commercialisation Fund (FDIC). This is primarily a commercial venture with the stated aim to encourage bilateral investment between Chinese and Lusophone countries. One suspects that the vast majority of the investment flowing from this fund may be used by Chinese resource firms looking to invest in the two countries mentioned above.

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News round-up: 8 June 2013 to 21 June 2013


CAN comment: The controversy over the Chinese small scale miners detained in Ghana has continued over the last few weeks as Chinese web users have reacted angrily calling for reprisals from the government. This nationalistic response sees a reasoned critique in the article above. Speaking about the poor environmental and labour practices involved the author writes, “Chinese companies and individuals, legal or illegal, are not intentionally doing this to African countries. They have been doing things this way in China for several decades. They actually don’t know any other way.” This is the product of China’s strange juxtaposition between developing country and superpower, where it has power to project its influence all over the world, but not necessarily the power to contain it.

CAN comment:  A welcome antidote to frequent articles berating China for its role in Africa, this article highlights a wonderful innovation from The Low Cost Health Programme Centre at the Shenzhen Institutes of Advanced Technology.  This is the truest ideal of south-south cooperation, that China’s developing world status helps it to understand how to develop appropriate technologies for the developed world. This project will deliver transport container based hospitals staffed by Chinese trained African doctors, delivered to remote areas of Africa in need of health services.

CAN comment: This blog is one of a number of recent articles claiming that the reaction to poor small scale mining practices in Zambia and Ghana, and comments from African leaders (particularly Nigeria Central Banker Lamido Sanusi) about the risk of Chinese colonialism amount to a backlash against China. However these incidents are not new. It remains the case that Chinese firms employ lower standards than their western equivalents and that they offer vastly cheaper products and financing. These examples of African backlash do not appear to be significant. Chinese companies will continue to win business where they offer the best deal.

CAN comment: A great piece on the China Africa relationship. The article points out that Chinese activity is motivated by need for resources and markets to sustain the country’s growing economy. It also contends that grassroots resentment is a common by-product of foreign investment in developing countries. In Africa specifically, resentment very much depends on the social and economic status of the people involved.

CAN comment: Another interesting Chinese defense of its role in Africa, this time by Yi Gang, deputy governor at the People’s Bank of China. He claims that 2000 Chinese companies have invested in building factories in Africa and also points out that while multinational corporations were pulling out of Africa around 2009 Chinese companies increased their investments, helping the region ride out the economic crisis. Interestingly, the focus of this article is very much on the potential of the relationship to create jobs, something that western firms have always struggled to achieve in any great numbers in Africa.

CAN comment: This great post provides fascinating detail on how Chinese small scale miners came to be in Ghana, and why their practices have brought such a negative reaction. The miners are predominantly from Shanglin county of Guangxi province, but have led a nomadic lifestyle since the gold reserves of the county were exhausted. The mining firms work in a highly organised manner generating significant funds for Ghanaian landowners, but employing mainly Chinese workers smuggled through Liberia, and paying Ghanaian workers poorly. Much of the wealth is taken back to China meaning Ghanaians see very little benefit.

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News round-up: 30 May 2013 to 7 June 2013

CAN comment: The detainment of over 100 illegal Chinese gold miners in Ghana this week has caused controversy. Chinese immigrants taking on low-skilled work such as artisanal mining or market trading are very unpopular in Ghana, due to the perception they are taking jobs that should be reserved for Africans. This has put the Chinese government in a difficult position between its own citizens who feel the government should hold Ghana to account for violence committed against Chinese citizens, and the Ghanaian government who want Chinese support to help deport low skilled Chinese immigrants.

CAN comment:  This interesting new study helps to reveal what African civil society think about ‘South-South developent’. The consensus seems to be that China, Brazil, India and South Africa’s cost-effective contributions to basic infrastructure, technology transfer, telecommunication and access to scholarships have been beneficial and that improved access to affordable consumer products was also a plus. The primary concern was the toll on local economies. They felt that lower prices and widespread corruption enable Chinese, Indian and South African companies to undercut local producers and suppliers, forcing them out of the market.

CAN comment: China’s cheap labour and ample labour pool has been its advantage and its undoing in Africa. As the previous article points out the main benefit of China in Africa has been exported consumer goods (cheap labour within China) the construction of infrastructure (and within Africa). However enterprising Chinese traders and migrants have caused tensions in Africa, especially resulting from counterfeit medical goods sold in Africa. For the Chinese government, these counterfeit goods risk undermining the goodwill garnered through aid programs building hospitals and treating people across the continent.

CAN comment: China’s soft power campaign in Africa takes a two pronged approach: education opportunities in Africa and China; and increased access to Chinese media. This article provides some great detail on the positives and negatives of these approaches for Africa, and points out that while Chinese education and media may sometimes come with a rose tinted view of the role of China, it’s no more biased than the Western tinted education and media that scholars may have received otherwise.

CAN comment: Chinese shoe maker Huajian shoes has moved part of its production to Ethiopia in order to benefit from cheaper labour costs, and avoid the difficulties created by the strengthening Chinese renminbi. This is a trend that African leaders should be doing everything they can to encourage. Ethiopia has proved very succesful in building up a thriving shoe manufacture industry. Also in the news this week, another Chinese firm Hisense has opened its plant for the manufacture of electrical goods in South Africa.

CAN comment: Another interesting trend in Africa is the use of Chinese media to launch well reasoned defences of its activities. Once upon a time Chinese media offered bland reporting of government visits and funding promises, but more recent articles provide more nuanced critique of accusations around China’s role. This article queries why so much is made of China’s resource imports from Africa, when developed countries such as the US have just as strong a bias towards importing primary resources from the continent.

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Weekly news update: 11/04/2013 to 17/05/2013

Top Stories:


CAN comment: Mozambique is one of the fastest growing economies in Africa and has huge potential to grow further due to significant gas and coal reserves in the country. While major Chinese and multinational companies are competing for a share of the reserves it is no surprise to see President Xi meeting with President Guebuza of Mozambique and talking about strengthening the relationship.

CAN comment: Direct evidence of China’s ever growing campaign to influence Africans through the media. This article provides effusive praise of China’s role in Africa and was published in a major Kenyan daily. The writer is the spokesperson for the Chinese embassy in Kenya.

CAN comment: Great article by Mthuli Ncube and Michael Fairbanks calling for African countries (particularly Nigeria, Angola and South Africa) to club together to negotiate tougher terms with China. A particular goal they set out is to persuade China to build greater linking infrastructure between countries to help build regional trade.

CAN comment: Interesting article in the Japanese press commenting on the benefits and pitfalls of Chinese aid, and the struggle of other nations to compete with the generous terms offered under Chinese deals. The article quotes the OECD’s estimate that Chinese aid was worth $2.47 billion in 2011 and that in 2009, 46 percent of China’s aid went to Africa.

CAN comment: There is a great deal of coverage of the Chinese in Africa, but much less of the growing diaspora of Africans in China, particularly in manufacturing export hubs like Guangzhou. These traders play a vital role in bringing Chinese goods into Africa and have settled into life in China.

CAN comment: Chinese car companies are increasingly looking to Africa as a growth market, but African countries need to do more to persuade them to move value added production to Africa. One car maker Foton is increasingly assembling vehicles locally in Africa using kits imported from China. For Chinese companies this provides a way to avoid the high tariffs on imported cars in nations such as South Africa, Algeria and Egypt.


Ghana China Friendship Union Appeal – Ghana Web (GHN)
The Ghana China Friendship Union (GCFU) has applauded the move by government to clamp down on illegal mining and its resultant negative impacts in the country. In a statement issued in Accra yesterday, GCFU noted that the Ministerial Taskforce set up by President Mahama to deal with illegal mining must however recognise the presence of legal Chinese firms providing supportive services in the mining sector.

20th Anniversary of Establishment of Eritrean-Chinese Diplomatic Relations Commemorated –
The 20th anniversary of the establishment of diplomatic relations between Eritrea and the People’s Republic of China (PRC) was commemorated yesterday at the Chinese Embassy in the presence of President Isaias Afwerki, senior Eritrean government and PFDJ officials, as well as invited guests.

Xi touts opportunity for co-op with Africa – China Daily (CHN)
China and Mozambique vowed to deepen economic cooperation, top leaders of both countries said on Monday. President Xi Jinping said in a meeting with visiting Mozambican President Armando Guebuza that there is “an important opportunity” for tangible cooperation between the two nations.

China-based Nigerians seek consular office in Guangzhou – The Guardian (NGA)
TO enhance easy access to travel protocols as required by the host country, Nigerians resident in Guangzhou, China, Tuesday called on President Goodluck Jonathan to see to the creation of a consular office in that province.

Africa is not the new China, it’s the new Africa – WEF Africa
While preparing for the World Economic Forum on Africa, which took place last week in Cape Town, I read about Africa being “the next China”. I wondered about that comparison before, but can today say from a business perspective that it is inaccurate.

How Third World benefits from China – Daily Nation (KEN)
China’s engagement with Africa is the most momentous phenomenon over the last decade. Two-way economic relations have improved exponentially. This has not only been attributed to China’s remarkable development but also to Africa’s fast economic growth.

Africa’s strategy must be to gain from China – City Press (ZAF)
Angola, SA and Nigeria are the fulcrum of the relationship, write Mthuli Ncube and Michael Fairbanks. China has fine-tuned its statecraft in ­Africa and morphed into the world’s most radical pragmatist. What can Africans do to gain from China’s new strategy?

Africans seek win-win ties with Chinese – Business Day (ZAF)
CHINA’s growth model is shifting, but Africa’s response has been unclear and inadequate. Over the past couple of years, China has become less resource intensive as the economy moves into middle-income status. As prosperity spreads, it has become more consumer and services driven.

Calls for deeper China-Africa ties at World Economic Forum – CCTV
China’s role in Africa’s development has been one of the key themes at the World Economic Forum held in Cape Town, South Africa. Before the three-day forum concluded Friday, African leaders hailed Chinese investments in the continent. Meanwhile, they called for a greater exchange of ideas moving forward.

Finance and Banking

Despite its extravagance, Chinese aid not always welcomed in Africa – Asahi Shimbum
There’s a towering presence in the foreign aid landscape in Africa, once the domain of Western donor nations and Japan: It is China.


African traders flocked to Guangzhou for the cheap goods but are staying to run manufacturing operations – Quartz Trading
Guangzhou is a store front for manufacturers in the Guangdong province, China’s biggest exporter, and is crammed full of wholesale malls offering everything imaginable in bulk: kitchen cabinets, furs, car parts. It is also home to the biggest African community in the country, an estimated 20,000 people.

Mining and Metals

Chinese strike about $500m worth of Gold in Ghana with secret method – Ghana Web (GHN)
Scores of villagers from a small town in China’s southern Guangxi province have struck gold worth more than 1 billion yuan in Ghana – but they’re keeping their method a secret, reported the 21st Century Business Herald.

Oil and Energy

Angola Looks to China as Oil Sales to U.S. Decline – Wall Street Journal
Angola is depending increasingly on oil sales to China as its exports to the U.S. decline, according to the country’s oil minister, reflecting a shift in the global oil market as North America produces more of its own energy.


Pentagon Continues Use of China Satellite in New Lease – Bloomberg
The Pentagon will continue for another year the lease of a Chinese commercial satellite to provide communications for its Africa Command.

Lenovo Plans to Debut Africa Smartphone in Nigeria This Year – Bloomberg
Lenovo Group Ltd. (992) will introduce its first smartphones in Africa, with a release planned for Nigeria before the end of the year, as the Chinese company looks for markets where it can sell directly to customers.


Is Western Criticism of China-Africa Trade Fair? – VoA Zimbabwe
China first visited Africa in the eighth century, but it was only about 30 years ago that the country began engaging the continent economically and politically in any significant way. Since then, many Western critics have labeled Chinese commercial efforts in Africa “exploitative” and harmful to democracy and human rights.

South Africa Wine Exports Setting Records on China Demand – Bloomberg
South African wine exports are poised to beat their 2012 record this year following high yields and on demand for premium vintages from North America and Asia, industry executives and growers said.

China and Portugal’s trade relation with Angola increasingly important – Macauhub (MOZ)

China and Portugal are becoming increasingly important for trade relations with Angola, whilst the United States and France are losing ground in the country’s balance of trade, according to Angolan figures cited by Portuguese bank BPI.

Transport and Infrastructure

Automakers map out sales plans in Africa – China Daily (CHN)
Companies hope to offset tough conditions elsewhere bymaking inroads in the growing market, reports Wang Chao. Like most people in Africa, Cisse Ouattara, an automobiledealer, had never heard of Beiqi Foton Motor Co, or seenthe trucks that the Chinese company is best known for, untila few years ago.

Egyptian National Railways seeks China cooperation to purchase 700 train cars for $570m – Egypt Daily News (EGT)
A source from within ENR stated that Zakaria received a surprise invitation from the Chinese company to discuss further cooperation between the two sides, adding that the meeting began last Sunday


China urges efforts for Africa’s capacity-building in fight against terrorism – Global Times (CHN)
China said on Monday that efforts should be made to help African countries build their capacity in the fight against terrorism, calling for support and assistance to Africa “without any attached political conditions.” Li Baodong, China’s permanent representative to the UN, made the remarks at an open debate of the UN Security Council on peace and security in Africa, which is themed on the challenges of the fight against terrorism in Africa.


Stronger environmental regulations can help China’s future in Africa – Global Times (CHN)
China has received a bad rap recently for its environmental exploitation in developing countries. The media asserts that three decades after the intensification of its international forays, China is still struggling to strike a balance between the protection of the environment and its rapid investments, particularly in Africa.


How China is educating Africa – and what it means for the west – The Guardian (GBR)
The da xue (Mandarin: the big study, or the big reading) or dai ho(k) (Cantonese: the big learning) are Chinese terms for a university. In the romance of the “old days”, learning was the only way to bypass the class system. China‘s annual imperial exams allowed even the poorest subject to step outside his poverty and feudal status to become an official. When, later, learning became concentrated in universities, the institutions became prestigious and symbolic. They were the portals of escape.

Knowing China in Uganda – China Daily (CHN)
It’s a typical downtown Kampala scene with crowds shifting between businesses – a clothing store, a furniture shop and a hair salon with loud music blasting through its doors onto the street. But above the bustle, on the second floor of a building, is a very un-Kampala picture that might seem more at home in the center of Beijing – a quiet corner of a community library stacked with Chinese literature, where green tea is served from a teapot emblazoned with a dragon.


Africa, China rub minds on AIDS, malaria, others – Vanguard (NGA)
Chinese and African leaders have met in Gaborone, Botswana, to discuss ways of jointly tackling critical issues such as AIDS, malaria,schistosomiasis, reproductive health, access to life-saving vaccines and non-communicable diseases among others, as the 4th International Roundtable on China-Africa Health Cooperation held to explore new partnerships to address pressing health challenges facing Africa and to strengthen an innovative health collaborative partnership.

Chinese volunteers on the rise overseas – China Daily (CHN)
Wu Xiangde is super busy these days. As a veteran volunteer from China, the 65-year-old is ona nonprofit program to treat a highly polluted river in Nairobi, Kenya, updating each day’sprogress on his blogs.

China-Africa joint medical research to deepen – University World News
China is to deepen joint medical research with Africa, particularly in training African medical scientists. Ren Minghui, director general of the Department for International Cooperation in the National Health and Family Planning Commission of China, said research and development was one priority area of collaboration being explored.

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