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China's Africa Ride

Published by Guardian on Sun, 13 Nov 2011


THE Chinese focus on Africa has been carefully orchestrated to be as acceptable as possible. This is understandable because the continent is growing weary of being the raw materials extraction backyard of the world. While much emphasis is on Chinese infrastructural investments in Africa, one area in which the Sino-muscle flexing may not be so apparent is in the financial sector. Take the example of Nigeria, where financial managers led by the country's Central Bank have decided to convert up to 10% of its foreign exchange reserves into the Chinese Yuan assets ostensibly to diversify her reserve basket.In fact, by 2006 China had become the leading new financier in Africa. According to the World Bank, Chinese funds for roads, railways and power projects stood at $7 billion in 2006. Compare that to the figure of just $1 billion that they were investing per year between 2001-2003. Current estimates show that Chinese companies are signing infrastructure deals worth over $50 billion a year. Trade with the continent exceeded $120 billion in 2010.China's biggest footprint in Africa has been its strategic grasp of natural resources ranging from oil to solid minerals and timber. The country's alleged position not to be concerned with local politics has allowed her to invest in contexts that other nations would consider inappropriate. Some observers merely see China's posturing as sheer opportunism or at best a cover to help it keep a blind eye to conflicts and misery while obtaining the resources it so desperately needs to feed its growing industrial complex.Examples of where Chinese investments in Africa have risen on the sidelines of mayhem can be found in Sudan and Libya. While conflicts raged in Sudan, China quietly established itself as the key player in that country's oil sector. In the heat of the Libyan revolution, the Chinese had to step back from their heavy investments in the country. With the death of Ghaddafi, the high-stake alignments for oil deals have turned feverish and China must now be calculating how to step into the competition from the sidelines into which it had been thrust by the unflinching support of the revolution by NATO nations.The Chinese set up the China-Africa Development Fund (CADFund) in 2007 following the China-Africa Cooperation forum of 2006. Since then investments have been made in more than 40 projects in over 20 African countries. These are expected to facilitate over $5 billion of further investments from Chinese companies in the continent. One of the success stories is the investment in a glass plant in Ethiopia, with the CADFund holding shares initially standing at 40 percent.In May 2010, CADFund teamed with Jidong Development Group to invest about $220 million in building a cement plant in South Africa. In Ethiopia, the CADFund teamed up with a Chinese leather company to build a leather-processing factory at a cost of about $26 million. This factory began operations in November 2010.In Zambia, work has already started on the construction of the Lower Kafue Gorge Hydropower Station, with investments from Sinohydro and Zambia's national electricity company. Sinohydro is also engaged in building a dam in Ghana that will flood and have a serious impact on a national park. Interestingly this project is being executed with the support of the Import-Export Bank of the United States.The challenge of Chinese investment in Africa must be seen behind the glossy, benign and beneficial front that is being presented. In the area of job creation, tensions have already mounted in situations where Chinese companies building infrastructure resort to importing labour from home. The resentment builds on the fact that they import workers even for tasks that do not require specialist skills. Some observers believe that this trend is encouraged by the fact that the companies may not be willing to observe local labour laws and that they feel comfortable following their own rules by using work-gangs imported from home. Complaints by Africa workers getting raw deals at the hands of Chinese companies have been recorded in countries including Namibia and Zambia. In some cases, workers in Chinese companies are obliged to work 12 hours shifts without breaks.The footprint is human and ecological. There are complaints that Chinese operations pay scant attention to environmental standards. In fact, complaints go as far as saying that these operations sometimes do not adhere to standards even in the construction sector. Failed projects are cited in Angola and Zambia. In Luanda, Angola, a hospital building began to crack up within months of its completion. In Zambia, the rains quickly washed a 130 km Chinese-built road connecting the Lusaka to Chirundu away. Angola pays for her Chinese infrastructure services with crude oil.Chinese environmental standards raise serious concerns on the continent. The severe damage to the environment of the oil fields in the Niger Delta of Nigeria, by Western oil transnational companies, is well known. It has been documented and is incontrovertible that these oil companies from the West have not utilised best oil field practices while operating in Nigeria. An equivalent of one Exxon Valdez spill is recorded yearly over the past decades and none have been adequately cleaned up or remediated.The Chinese have already recorded huge oil spill lakes in Sudan and in Zimbabwe Chinese miners are characterised as operation like illegal miners. The Chinese oil company, Sinopec, has explored for oil in a national park in Gabon, showing exactly the same tendencies for which Western transnational oil companies are known. With less transparent environmental standards, it is feared that the African environment is set to receive raw deals at the hands of Chinese operators.Chinese environmental records at home should raise warning signals for African nations, but this does not appear to be the case. In Zambia, for instance, frequent accidents in Chinese-owned copper mines are related to lax safety standards. These have fuelled dissent from the local workforce.Some critics of Chinese approaches in Africa say that the country makes her investment style attractive by being devoid of conditions in order to lure political leaders who do not desire scrutiny into their embrace. The approach is also seen as neo-colonial and sets the stage for erosion of human and environmental rights.A 510 km heavy-haulage road through Cameroon which is going to be built by Sundance has been designed to link its mines in Congo to a sea port in Cameroon. The construction is expected to be completed in 2014 and work will start as soon as mining permits in Congo are obtained and tax and royalty payment laws are created in Cameroon.With restrictions on timber logging in China in 1998, the huge appetite for wood and timber products is being shifted elsewhere and Africa is a prime target. The country is now the world's largest timber importer and 90% of these are imported from Cameroon, Congo, Equatorial Guinea and Gabon. Chinese pressures on African forests are not new. In the 1990s community people and environmental justice activists in Nigeria had running battles with the Western Metal Products Company (WEMPCO), a Chinese company that engaged in massive logging in Omo forests and later in the Cross River forests in Nigeria. The company was notorious for often logging in forest compartments that were not allotted to it, and for felling immature trees, thus heavily degrading the forests.The liberal Chinese approach to Africa may please governments but it is working against the interests of African peoples. The reality is that China is not in Africa for philanthropic reasons and this places the burden of defending the environment on African peoples and nations. Consider for one, reports that there is a Chinese enclave in Tanzania where the investor's operations include an airstrip controlled solely by them apparently without state scrutiny. It is even said that nobody goes into this grabbed area without a 'visa' issued by the investor.Africa, the bride, is clearly caught between desperate suitors from the East and the West. To whom will she yield her favours' Will this be a partnership of mutual respect or are we set to witness another case of rape''Bassey is Director of Environmental Right Action (ERA)
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