THE battered signs in the lobby of the main international hotel in Lubumbashi,
capital of Congo’s mineral-rich Katanga province, had barely changed in
years. Next to the faded, out-of-date insignia of the traditional European
airlines, they give details of all direct and non- direct flights to Paris,
Brussels, Zurich, and London — the favoured destinations of the frequent
visitors from Europe’s mining houses.
A few months ago, however, Kenya Airways — Africa’s fastest growing airline —
proudly declared in bold new colours the latest additions to its network —
direct flights to Guangzhou and Hong Kong.
To many, the difference in signs symbolised Africa’s changing relationships
with the world — one with Europe, old and out-of-date, the other with China,
brash and growing.
Few people in the former Belgian Congo were surprised at the development. They
have watched over the past two years as the number of Chinese businessmen on
flights in and out of the country has grown from a trickle to a torrent,
matched by similar incursions into neighbouring Zambia and Angola.
“They started coming in about two years ago, but they were small-time
merchants and set up as middlemen buying from local outfits,” said
Jean-Pierre Kabongo, who runs a miners’ association in Katanga. “Now they
are buying the companies themselves.”
China is moving into Africa on a grand scale. Still a developing nation
itself, it has nonetheless now overtaken Britain to be the continent’s
third-biggest trading partner after the United States and France. Its
inroads into the world’s poorest continent are the the most striking sign of
the biggest shake-up in patterns of world trade in a generation.
The pace of change is startling: in the first four months of this year,
Chinese imports from African countries totalled nearly $9 billion (£4.9
billion) — a small figure by world standards, but up by more than 50 per
cent from the same period a year ago. In 2005 total trade flows reached
$39.8 billion, a doubling in volumes in just two years, and nearly four
times the level of trade in 2001.
For the world’s fastest growing economy, Africa is first and foremost a
supplier of oil. In Sudan, state-owned oil companies have been investing
since Western companies left in the mid-1990s. In 1996 China bought a 40 per
cent stake in two oilfields and since 1998 it has helped to build a 930-mile
pipeline from the fields to the Red Sea. Last year it bought 50 per cent of
Sudan’s oil exports, accounting for 5 per cent of its needs.
China has stakes in extraction in Nigeria, Angola and Algeria, among others.
Its biggest deal so far came in January when CNOOC, the state-owned energy
company, announced it would buy a 45 per cent stake in an offshore oilfield
in Nigeria for $2.3 billion.
Other countries benefit from China’s position as the world’s leading importer
of base metals. Africa now supplies one third of China’s manganese; South
Africa is the fourth- largest supplier of iron ore to China; and 85 per cent
of Chinese imports of cobalt come from the Republic of Congo, the Democratic
Republic of Congo and South Africa.
Projects range from diamond mining and timber logging to cotton and telecoms.
About 800 Chinese companies are now working in Africa, and one estimate puts
the number of expatriate Chinese workers in Africa at 78,000. A key to their
success is the willingness of Chinese state-run companies to undercut their
Western rivals and take on the projects they dismiss as too risky. Zambia’s
neglected Chambishi copper mines are being overhauled by China, and around
them has sprung up what visitors describe as the fastest-growing Chinatown
in the world.
CNOOC recently agreed to pay $2.3 billion to rehabilitate the Kaduna oil
refinery in Nigeria, a loss-making project which no privately owned Western
company would touch.
And China is building not just mines and refineries in Africa but the very
infrastructure itself: roads, bridges and power grids across the continent
are being thrown up by Chinese firms. Flows of foreign direct investment
from China into Africa have risen from $1.5 million in 1991 to $107.4
million in 2003, according to the Ministry of Commerce. China has sent 1,100
doctors to Africa, taken African students to China on educational exchanges,
and designated 16 African countries as official tourism venues.
If Western nations were to intervene so widely it would be decried as
colonialism. But China’s success is partly because of its willingness to
ignore politics and focus on what makes business sense. Its firm policy of
non-interference in the domestic affairs of other countries, born out of its
dislike of foreign interference in its own affairs, makes it a popular
player in the eyes of many African governments, particularly those, such as
Robert Mugabe’s Zimbabwe, that can find few other international supporters.
The scrapping of hundreds of tariffs on African imports and a $1.3 billion
debt write-off in 2003 have also strengthened relations.
Chinese leaders have dubbed 2006 the “Year of Africa” and are aggressively
courting the continent. Li Zhaoxing, the Foreign Minister, visited in
January and President Hu Jintao followed in April. On a seven-country tour
last week, Wen Jiabao, the Prime Minister, agreed to restrict textile and
clothing exports to South Africa to dampen opposition from local garment
producers.
The International Monetary Fund now estimates that Africa’s growth is edging
towards 6per cent, its highest in 30 years, partly because of Chinese
investment and its soaring demand for raw materials.
Gerard Lyons, chief economist at Standard Chartered Bank, said that Africa was
only part of the picture. “Globally, we’re seeing new corridors of trade
opening out between regions in terms of flows of commodities, goods, people
and investment. This is just one aspect of it.”
In oil-rich, war-torn Angola, Chinese companies will build railway lines,
schools, roads, hospitals, bridges, offices and a fibre-optic network,
thanks to a $2 billion loan deal in which Beijing can secure a stake in the
country’s offshore oilfields. Last week it pledged a further $2 billion loan
to the country.
But that approach has caused concern in Western countries, who mutter that
China’s loans are undermining attempts to link aid to reform and break the
cycle of African countries’ indebtedness. Equally critics add that although
the West is moving away from “tied aid”, Chinese generosity often comes with
requirements to employ Chinese citizens or to buy in Chinese resources.
Another worry is weapons sales: according to the US Congressional Research
Service, Chinese arms sales made up 10 per cent of all conventional arms
transfers to Africa from 1996 to 2003. China has faced allegations of
providing weapons used by the Islamic government in Khartoum to terrorise
civilians in Darfur, and of selling fighter jets and radio-jamming devices
to Zimbabwe.
Alarm is greatest in the US, where a recent Energy Department report argued
that China’s tolerance of despotic regimes could undermine Washington’s
strategic goal to spread democracy and free trade.
There are several motives behind China’s African safari. First, it makes
economic sense: China requires access to oil and natural resources on a vast
scale and wants them delivered securely. But there are also political
drivers. China can use its financial muscle to drive forward its acceptance
as a market economy and to exert pressure on the two dozen or so countries
that still recognise Taiwan.
Its ultimate strategic goal, however, is unclear, perhaps because it has only
just begun to consider it. “Involvement in Africa crystallises China’s dual
identity between being a developing country and a major power,” Andrew
Small, China programme manager at the Foreign Policy Centre, a UK
think-tank, said. “They have achieved a position of far greater importance
in Africa than they probably planned to.”
However, Ann Grant, of Standard Chartered Capital Markets, said: “China has a
strategic approach to Africa, in which the markets, the energy security and
the political relationships are all very much of a piece. They are looking
not at the next two to three years but at the next 15 to 20 years.”
Deutche Bank Research estimates that China will remain “hungry for
commodities” for at least the next 15 years. In particular, it forecasts
China’s annual demand for oil to rise by 20 per cent a year, from 91 million
tons in 2005 to a staggering 1.9 billion tons in 2020. By 2045 China is
projected to rely on imported oil for 45 per cent of its energy needs.
In the old Belgian mining town of Likasi, a 75-mile drive from Lubumbashi,
China has opened a new cobalt plant, the Feza Mining Company. Rundown
suburban houses, once the homes of expatriate managers, are being repaired
and taken over by the new arrivals.
“Production is still small but we should be able to expand it very quickly;
the ground here is so rich,” one of its managers, Willy Zhang, told The
Times on a recent visit.
Nearby, Chinese labourers were working alongside Congolese, paving a new road
to two mines bought from the bankrupt state giant Gecamines by a Chinese
consortium.
Mr Kabongo sums up the situation laconically. “No one knows who they are, but
they are Chinese,” he says.
