China’s African Venture

Since the third China-Africa cooperation forum in Beijing in November 2006 (where 48 countries were represented) a genuine scare mongering campaign has been orchestrated through the European media, stimulated by their propensity to see the continent as a kind of private hunting ground for the Western world. This had led some of them to speak of "Chinafrica" and to fulminate against the principle of non-interference clearly stated in the final declaration of the meeting. The other articulated guidelines - political equality, "win-win" economic cooperation and cultural exchange - also break with the doctrines forged by the international financial institutions, thus explaining the patent interest of African leaders in the initiatives and discourse coming from Beijing.

Nevertheless, things have to be relativised. Sino-African trade accounts for only 2% of Chinese and 3.5% of African overseas trade. But, coming from a low base, it is burgeoning spectacularly. From 3 billion dollars in 1995, the value of this trade reached 40 billion in 2005 and, according to the Prime Minister Wen Jiabao, should reach the 100 billion mark in 2010. China has also committed itself to raising from 190 to 4,000 the number of products exempted from customs duties for the least developed countries, to grant 3 billion dollars in preferential loans and 2 billion in export credit for the next three years ; to which the 5 billion paid directly to Chinese companies investing in Africa must be added. In essence, "with an invoice which is half of that of the European companies and with low interest loans, which can be paid off with raw materials, the Africans have come across unexpected conditions" (1). One example : the Ivory Coast where, with zero rate loans, China is behind numerous large construction projects from road works, to the Palace of culture in Abidjan to the parliament in Yamoussoukro. This has enraged certain clients of the former colonial masters, well used to everything continuing to pass by them.

One of Beijing’s concerns relates obviously to the oil-producing countries, China having become in 2003 the second biggest consumer in the world. Being a producing country, China buys just 40% of its oil abroad, an amount roughly equal to South Korea, therefore very far behind Japan and the United States. First supplier : Angola, where Beijing has just won the competition for 50% of ’block 18’ of national offshore (of which Shell is the principal operator). To secure the deal, China opened a 2 billion dollar credit line to the Angolan state for its infrastructural projects.

A virtually identical strategy was taken towards Algeria, with which bilateral trade grew from 200 million dollars in 2000 to 660 million in 2003 (in a very unbalanced way, since Chinese exports were worth 565 million and its imports just 95 million). In addition to direct investments in the oil and mining sector and in public works, China won, at a cost of 11 billion dollars, the largest contract in Algerian history : the construction of two thirds of the east-west motorway which will cross the country. Bearing in mind that the deal foresees that the materials and a broad part of the personnel are Chinese, its implementation will inevitably raise acute problems in a country where unemployment hovers around 30 %.

The "partnership" proposed by China is not therefore limited to the oil sector, but concerns almost all activities and African countries. At the head, South Africa with 20% of Sino-African trade. Chinese imports are growing fast, from precious metals and ores to platinum, to steel and aluminium. As proof of its desire for reciprocity, Beijing permitted South-African investments in China itself (in mining and paper, in particular). The only such case for the whole of the continent, up to now.

1) "Afrique-Chine : un partenariat de type nouveau", by Bernard Bouché, in "Aujourd’hui l’Afrique" review, no. 103, March 2007.