China’s Interest in Africa
China had been out shopping for a while now before throwing the recent extravaganza that brought together 1700 delegates that included African head of states, representatives from private companies, and other global organizations. The reason for the event as reported was focused around China’s need for natural resources that is growing fast and Africa is one of the destination the Chinese want to diversify into. In addition, China also needs support for its initiatives at the UN and is going to count on the support of the African head of states. Moreover, as always it needs a market to sell what it is exporting. This relation goes back to the year 2000 when the Forum on China-Africa was initiated and was attended by high level African ministers who paved the way for the coming together of the 48 head of states from Africa.
It is not a hidden secret that China is looking for scarce resources that are in short supply around the globe and the cost of developing them could vary from region to region. Certainly, Africa is not yet crowded, even if oil exploration had been around for a while, and the old reserves are on the verge of being exhausted while new ones are being developed. Up to this point no one is worried by the move China took because it seems that there is enough for everyone, which includes the U.S.A. that stated it is not worried about China's venture into Africa even if it gets a good portion of its oil from Africa.
Yet, if there is anything the advanced regions did not like about the Chinese ways of doing business, it is their loan advancing procedure where regimes that are not par with democratic requirements had been snapping loans with no hook for good governance, transparency, and human right attached to them. It is possible to infer this as rewarding those that are abusing their powers, but China had said it is doing its best to separate business and politics. But the fact of the matter is they might have to go together because the fund and the economic activities that will be created through the relationship will put more resources on the hand of those that are already labeled as wrong doers and it would exasperate the situation.
That aside, the size of the trade between the two regions is substantial and the two way trade is expected to make it to $50 billion this year, and China has become the third largest trading partner for African countries following the U.S.A. and France. Currently oil export makes the high proportion of trade from the Africans side and China is getting one-third of its oil need from Africa. The speculation is that China is in the phase of raising its stockpile as its total import could pass the 7 million barrel a day mark.
One of the reasons that makes Africa attractive for China is Western investment still is not moving around freely as there are restrictions and sanctions in some of these countries, mostly in the northern regions. Because of that Sudan had become a hot spot for explorers, its internal ethnic strife not going in the way, and China gets up to ten percent of its oil imports from its oilfields, and in its turn it is heavily investing on infrastructure in the country’s oil industry. Nigeria is also working with the Chinese on an oil contract that involves up to $8 billion.
Another important oil exporter nation to China is Angola that had received a $2 billion loan giving it respite from the Western pressure and it is reported to have replaced Saudi Arabia as a provider of oil to China. Even if Kenya is not in the oil game, it has received a $13.5 million grant for just condemning the Taiwan's independence. Yet, with all these activities, China has not yet made it to the U.S.A. level of oil importing from Africa, which stands at 2.4 million barrel a day against 771,000 bpd for the Chinese. The Chinese interest in Africa is not limited only to oil as they want to import more natural resources even if some African interest groups are wary because if what they export will be mainly natural resources, they are worried other exports will lag behind. However, there is a trade agreement in place with 28 African countries to give 190 goods entering the Chinese market a duty free status, although most of them are natural resources.
In all these activities there is nothing Africa is going to lose as it is a good opportunity to work with an economy that is growing very quickly and what that would mean is the Chinese need will eventually become huge. At a time where either markets are shrinking or are stagnant, finding such a huge demand for items that are available in plenty in Africa would mean, what the Africans will need is the acumen to negotiate as the Chinese have proven to be a very reasonable partners who have set their focus on the future too. This means, the relationship is going to be unlike to what had always been commonplace in the commercial world, where there is always a rush to exploit a given opportunity, and to move on to the next one, as most of the opportunities could be exhausted over time. At the same time, it is always good when the number of buyers is on the rise since it will avail a better barraging lever.
The other interesting aspect is the Chinese market could absorb more than the natural resources that they are strapped with, which means it will avail unprecedented opportunity for Africans that are clamoring, the Western countries should open their markets for African agricultural products. In addition, the Chinese have promised to introduce infrastructure enhancing mechanisms wherever they see it fit, and that is one of the key elements that is lacking very badly in Africa, and here is a good mutual opportunity to exploit. The transferring of technology, another element that is badly needed in Africa could also be brought to the table whenever opportunities are rife.
All in all, considering what goes on for Africa, it seems that the Africans might find it difficult to catch up with the momentum, because they were also having a meeting with the EU officials who had been sinking a lot of money in the continent and as long as the Africans met the basic democratic requirements, there is going to be more to follow. What this means is the continent has a readymade alternative means for forging ahead by simply introducing full fledged democracy and by eliminating corruption. The human right issue is also at the top of everyone’s agenda except on the Chinese. These concerns are key not only to get the aid and opportunities these entities are offering and to participate in the lucrative mutual economic activities, but for the overall good of the continent. These badly needed changes should take precedence and slowly they have to be implemented in such a way that they will not be undone easily.
When leaders like the Ethiopian PM says democracy cannot be imposed from within or without, it will make the intent of an otherwise hardworking PM dubious, even if everyone knows he has a lot to fear about, and it is this kind of mentality that has held the continent back from advancing for so long. At times, in spite of their input, it is amazing to realize the kind of political clout individual leaders, especially in Africa are wielding. That is an issue that requires consideration and deliberating very seriously, because they are where they are to represent and address the public’s interest. And in this particular area it is only Africa that is lagging behind because there are a good number of despotic leaders that could get their way with no opposition or accountability, and it is not a difficult thing to ask from leaders to make the public interest first, even if this particular public we are talking about is divided ethnically in most countries, one pretext for their being hard-liners. Those who will have difficulty to meet such requirements should be deposed because a nation like Ethiopia has no reason to either be abused, held back, or exploited by a minority ethnic group. Yet this just happened to be the price they have to pay for failing to rise to the moment, and eventually when democracy sends in its root deeper, all this will change for the better.
It is not a hidden secret that China is looking for scarce resources that are in short supply around the globe and the cost of developing them could vary from region to region. Certainly, Africa is not yet crowded, even if oil exploration had been around for a while, and the old reserves are on the verge of being exhausted while new ones are being developed. Up to this point no one is worried by the move China took because it seems that there is enough for everyone, which includes the U.S.A. that stated it is not worried about China's venture into Africa even if it gets a good portion of its oil from Africa.
Yet, if there is anything the advanced regions did not like about the Chinese ways of doing business, it is their loan advancing procedure where regimes that are not par with democratic requirements had been snapping loans with no hook for good governance, transparency, and human right attached to them. It is possible to infer this as rewarding those that are abusing their powers, but China had said it is doing its best to separate business and politics. But the fact of the matter is they might have to go together because the fund and the economic activities that will be created through the relationship will put more resources on the hand of those that are already labeled as wrong doers and it would exasperate the situation.
That aside, the size of the trade between the two regions is substantial and the two way trade is expected to make it to $50 billion this year, and China has become the third largest trading partner for African countries following the U.S.A. and France. Currently oil export makes the high proportion of trade from the Africans side and China is getting one-third of its oil need from Africa. The speculation is that China is in the phase of raising its stockpile as its total import could pass the 7 million barrel a day mark.
One of the reasons that makes Africa attractive for China is Western investment still is not moving around freely as there are restrictions and sanctions in some of these countries, mostly in the northern regions. Because of that Sudan had become a hot spot for explorers, its internal ethnic strife not going in the way, and China gets up to ten percent of its oil imports from its oilfields, and in its turn it is heavily investing on infrastructure in the country’s oil industry. Nigeria is also working with the Chinese on an oil contract that involves up to $8 billion.
Another important oil exporter nation to China is Angola that had received a $2 billion loan giving it respite from the Western pressure and it is reported to have replaced Saudi Arabia as a provider of oil to China. Even if Kenya is not in the oil game, it has received a $13.5 million grant for just condemning the Taiwan's independence. Yet, with all these activities, China has not yet made it to the U.S.A. level of oil importing from Africa, which stands at 2.4 million barrel a day against 771,000 bpd for the Chinese. The Chinese interest in Africa is not limited only to oil as they want to import more natural resources even if some African interest groups are wary because if what they export will be mainly natural resources, they are worried other exports will lag behind. However, there is a trade agreement in place with 28 African countries to give 190 goods entering the Chinese market a duty free status, although most of them are natural resources.
In all these activities there is nothing Africa is going to lose as it is a good opportunity to work with an economy that is growing very quickly and what that would mean is the Chinese need will eventually become huge. At a time where either markets are shrinking or are stagnant, finding such a huge demand for items that are available in plenty in Africa would mean, what the Africans will need is the acumen to negotiate as the Chinese have proven to be a very reasonable partners who have set their focus on the future too. This means, the relationship is going to be unlike to what had always been commonplace in the commercial world, where there is always a rush to exploit a given opportunity, and to move on to the next one, as most of the opportunities could be exhausted over time. At the same time, it is always good when the number of buyers is on the rise since it will avail a better barraging lever.
The other interesting aspect is the Chinese market could absorb more than the natural resources that they are strapped with, which means it will avail unprecedented opportunity for Africans that are clamoring, the Western countries should open their markets for African agricultural products. In addition, the Chinese have promised to introduce infrastructure enhancing mechanisms wherever they see it fit, and that is one of the key elements that is lacking very badly in Africa, and here is a good mutual opportunity to exploit. The transferring of technology, another element that is badly needed in Africa could also be brought to the table whenever opportunities are rife.
All in all, considering what goes on for Africa, it seems that the Africans might find it difficult to catch up with the momentum, because they were also having a meeting with the EU officials who had been sinking a lot of money in the continent and as long as the Africans met the basic democratic requirements, there is going to be more to follow. What this means is the continent has a readymade alternative means for forging ahead by simply introducing full fledged democracy and by eliminating corruption. The human right issue is also at the top of everyone’s agenda except on the Chinese. These concerns are key not only to get the aid and opportunities these entities are offering and to participate in the lucrative mutual economic activities, but for the overall good of the continent. These badly needed changes should take precedence and slowly they have to be implemented in such a way that they will not be undone easily.
When leaders like the Ethiopian PM says democracy cannot be imposed from within or without, it will make the intent of an otherwise hardworking PM dubious, even if everyone knows he has a lot to fear about, and it is this kind of mentality that has held the continent back from advancing for so long. At times, in spite of their input, it is amazing to realize the kind of political clout individual leaders, especially in Africa are wielding. That is an issue that requires consideration and deliberating very seriously, because they are where they are to represent and address the public’s interest. And in this particular area it is only Africa that is lagging behind because there are a good number of despotic leaders that could get their way with no opposition or accountability, and it is not a difficult thing to ask from leaders to make the public interest first, even if this particular public we are talking about is divided ethnically in most countries, one pretext for their being hard-liners. Those who will have difficulty to meet such requirements should be deposed because a nation like Ethiopia has no reason to either be abused, held back, or exploited by a minority ethnic group. Yet this just happened to be the price they have to pay for failing to rise to the moment, and eventually when democracy sends in its root deeper, all this will change for the better.
posted by Ethio-Probe @ 11:58 AM
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