All of China’s Oil Deals In Africa Not Smooth Sailing

Mercredi, octobre 7th, 2009

African countries have had China’s participation in oil exploration operations for the last five years. But all is not well and China’s recent acquisition efforts have been running into difficulties. While some are facing vetoes there are others that have reached advanced stages of negotiation. For instance, in Nigeria, China’s state owned China National Offshore Oil Corp. (Cnooc) has reached advanced stages in talks about taking over blocks of oil exploration that are underutilized though owned by the Royal Dutch Shell and other companies. This was announced by Nigeria’s oil minister and a presidential spokesman. About 20 onshore blocks were at stake and the likely investment would be to the tune of several billion dollars.

This is sharp contrast to the fate of late stage negotiations of Chinese companies in Angola and Libya. In Libya, the bid of $462 million by China national Petroleum Corp for Verenex Energy Inc. Close on its heels was Angola’s state owned Sonangol wanting to stop Marathon Oil Corp.’s 20% stake in the oil fields to China’s Cnooc and Sinopec. The latter’s stand is the extreme opposite of the reception and preference Chinese companies received in Angola half a decade ago. Angola became China’s largest oil supplier in 2008 and Sino-African trade touched $106.8 billion.

The possible explanation for things coming to such a pass can be found in China’s grip too tight for Africa to handle. Moreover China has kept local recruitment levels low and has done little to increase employment opportunities or train the locals in their projects. Their policy of oil for infrastructure was welcomed initially but is now being spurned. The China Africa relationship is gradually maturing and as Africa moves higher up on the development ladder, it is being selective about its path. China is no longer the only country willing to pump in millions into Africa’s infrastructure. Western banks are again lapping up investment opportunities and fund requirements of African companies. The U.S. is also increasing its investment in oil and agriculture. Thus Africa’s need for China is gradually falling.

Source : Business Africa

China’s Largest African Trading Partner-Angola

Lundi, octobre 5th, 2009

Angola emerged as China’s largest trading partner in Africa in 2008 with bilateral trade amounting to $25.3 billion during the financial year. This was stated by the Chinese ambassador to Angola, Zhang Bolun in Luanda two days ago.

Both countries are under pressure due to the global financial crisis, but despite all odds, trade between the two nations has been consistently increasing, he said. More private investors would be coming in to Angola in the coming year. These would include contractors interested in agricultural opportunities open in Angola, the food industry, timber processing and also information technology. China had earlier promised to send agro-technicians for agricultural revival in Angola where agricultural production had been stagnant through the years of armed conflicts in the country. Timber processing would be beneficial as well since Angola has rich forests with good quality timber procurable for furniture and other woodwork.

Oil forms the largest chunk of the Chinese imports from Angola, amounting to 16% of the total. It also happens to be the African country giving the maximum amount of oil to China to meet its ever-increasing needs. Angola is Africa’s largest oil producer, though the last month saw its oil production dip as compared to the previous month.

Angola accounts for 24% of the total China-Africa trade, and with more investors coming in from China, it is likely to increase further. China, in turn, is helping Angola in infrastructure development by building roads and railways, hospitals and schools, free markets and housing. All these are aimed at improving the living standards of the local people and hasten the process of the country’s reconstruction. Cooperation in other sectors is also on the anvil.

Source : Business China

Car Plant Funded by China Opens In Angola

Lundi, août 3rd, 2009

China has funded a car plant in Angola. Angola is planning to produce cars from next month onwards after this funded venture. The technology will be that from Japan’s Nissan Motor Co. Ltd. This was announced by the Dy. GM of the China International Fund.

Incidentally CSV Automovel – Angola will be the first car plant in the country. This has given rise to many job opportunities. It has been a $30 million investment. With this the company will be able to produce pick up vans, SUVs, small and compact cars and buses. According to Kelvin Kwan, thse will be produced in the factory that is located on the outskirts of Luanda.

They are planning to aim at the initial out of 10,000 vehicles. But this will be increased to 30,000 in the near future or 3 years according to the demand.

According to Kwan, “We have done our market research and expect the plant to be producing cars at full capacity by 2012.” He also added that the engines of the vehicles will be from Nissan.

Angola had been a victim of 27 year old civil war that ended in 2002. Now the country wants to enhance its economy and the industrial sector so as to create jobs and income for its people. The county’s population is 16.5 million. It also wants to diversify from its traditional oil and diamond reliant economy.

Surprisingly, this South African nation equals Nigeria for being Africa’s biggest oil producer. Also it is world’s top most diamond exporter.

In Angola most of the cars used for domestic purpose were either imported from Asia or the United States by the sea route. The land route taken was via Namibia on the southern border of Angola. But now this will be reduced since there will be an automatic increase in the demand for local products which will be cheap as compared to the imported cars.

Apart from this China has also given $5 billion grants to Angola to help in its oil-backed loans. This has helped the country to build its infrastructure.

Source : Suppliers Africa

Reducing Poverty In Africa – The Chinese Way

Lundi, juin 22nd, 2009

The story of China’s progress can be traced from the days of abject poverty to times of comfort, accomplishment and affluence. Yet it is not something that took place overnight. The long winding road down this economic path has many lessons for others to learn from. One such country that could well benefit from the Chinese experience is Africa, with its millions suffering with the curse of poverty.

China’s lessons on poverty alleviation were recently discussed at a seminar held at Beijing that was attended by diplomats from Africa among other delegates. The Vice President of the International Poverty Reduction center in China or the IPRCC, Huang Chengwei, stated that China would be happy to share its measures to reduce poverty with Africa. Africa is reeling under the impact of the global financial crisis, and the China Africa Cooperation has been helpful in reducing the number of poverty stricken Africans.

China believed in helping its people develop skills rather than ask for aid and financial assistance, and it was these skills that made people get employment and improve their lot. Similarly in Africa also, China is setting up projects that will give employment to the local Africans and help them earn rather than provide food and clothing alone. Other measures being taken as part of Sino-African cooperation is the development of infrastructure facilities, education and medical facilities, improving quality more than quantity of production and also assist in agricultural improvement. China has been instrumental in developing and improving the existing mining facilities in the resource rich African countries. The African countries to benefit include, Nigeria, Angola, Kenya, Sudan, Congo, South Africa to name just a few.

Trade between China and Africa has continued to grow despite the recession and has already crossed the $108 billion mark last year. China has been exporting cheap manufactured goods to the vast African markets besides machinery and equipment, industrial goods and gadgets. In exchange it has been importing minerals and oil from Africa. The China-Africa bonds have consistently strengthened and grown, and there is a steady flow of tourists as well from both sides.

Source : Manufacturers Africa

Africa Gains While China Spends

Mardi, juin 9th, 2009

China and Africa continue their courtship and the skeptical world looks on. China has been assisting struggling African economies with no preconditions and no strings tied, and it certainly does not expect African leaders to come begging for funds. This is a marked change from western attitudes that have for long espoused the democratic cause and human rights issues.  But Africa may not be amenable to the western code of conduct and system of governance.

What may appeal to Africa is the business system followed by China, which has made an entrance on the African horizon with new ideas, new ways of doing business and bags full of aid. The relationship has deepened with exchanges in education and culture. What the African masses see is that the Chinese have give them good roads, railways, international standard stadia for games, hospitals, schools and universities. In short, a respite from their bleak existence and promise of a better future.

Western criticism is mainly focused on the lack of transparency and accountability in China’s dealings, and they fear that the Chinese attitude may help the leadership and harm the masses. But the fact remains that it is the masses that are benefiting from all the Chinese money flowing into the countries, thus far deprived of funds for development.

China has reiterated that it is going to double its financial assistance by 2009, provide loans at concessional terms to the tune of $5 billion, enhance the funding of the China-Africa Fund, and is also canceling the entire interest free debt owed by some 33 African countries. Out of the poorest African nations, Uganda has already benefited by investments equaling $141 million, while getting its 17.5 million dollar debt cancelled. The democratic Republic of Congo is getting $5 billion to reconstruct its railway network, build roads and highways, hospitals and schools, and buying all that Congo has to offer, like agro-products, timber and minerals like cobalt and copper. It is the largest investor in Sudan and buys oil worth millions of dollars from Angola

China offers many lessons to Africans to learn from. The secret behind its success has been its investment in its people’s education. Africa has not yet realized the need for adopting the education route to empower its people

Source : Chinafrica

Chinese in Africa

Mardi, avril 21st, 2009

Africa has a large population of Chinese. The Chinese here consist of two communities – ones which came here in the 20th century and the ones who migrated here after apartheid was over. It was the gold mines in Johannesburg that attracted the Chinese immigrants in 1870s. The number kept building throughout the 1800s. However, after the Anglo Boer War, some of the Chinese population was pushed to places like Port Elizabeth and East London.

Once the apartheid was over in 1994, more Chinese started immigrating to South Africa. Presently the Chinese population in South Africa stands in the range of 200,000 – 300,000. A new Chinatown has come up in Johannesburg. Of lately China has been maintaining stronger ties with the African nations. According to a survey in August 2007, 750,000 Chinese nationals have been living or working in African nations. There is an estimated influx of 40,000 Chinese in Chad according to a survey. There is a presence of around 40,000 Chinese in Namibia (2006), 80,000 in Zambia and 50,000 in Nigeria. Around 100,000 Chinese are living or working in Angola.

The Chinese that are based in South Africa have established their business in commerce industries. Other occupations that Chinese are into include medicine, art and academia.

In Madagascar alone the Chinese form the third largest overseas population in an African country and there are around 40,000 – 60,000 inhabitants living there. The first immigrant came to Madagascar in 1862 in the port of Tamatave. After this in the following years, more Chinese labourers arrived here that was part of an initiative by French General Joseph Gallieni. They were basically brought to work on a railway project. However, most of the Chinese perished and ones which lived went back to China. In 1904, a small population of 452 Chinese was left. Apart from coming as labourers, Chinese also entered Madagascar as free migrants. And 1957 official statistics showed presence of 7,349 Chinese flourishing in Madagascar. At present the number has swelled to 40,000. Apart from this there are approximately 10,000 expatriates from the People’s Republic of China that are a part of the Chinese community over here. The popular business over here among this community included products like coffee, cloves and vanilla beans.

Source : Manufacturers Africa

China-Angola Ties At their Best Ever

Mardi, mars 31st, 2009

China and Angola have a long association but after 2002 when the 27-year old civil war came to an end in Angola, their ties began to gain momentum. According to China’s ambassador to Angola their relations are at their peak in the history of the ties between the two countries. Bilateral relations and economic relations, in particular, have been growing at a rapid pace and benefiting both countries equally. Angola is China’s largest African trading partner, with the two-way trading volume having reached an all-time high of $ 25 billion. The ambassador stated this at the opening of the China Angola Bilateral Commission in Luanda, the Angolan capital, on the 27th.

The newest bouquet of grants from the Chinese government is a $4.5 billion credit to Angola for developing infrastructure like telecom networks, power supply networks, airports, roads, railways and so on. China already has at least a hundred companies running in Angola. Some of the bigger ones include the Sino-Hydro Company, China Harbor Construction Company, Huawei Technologies Co., ZTE Corporation, and China Railway Construction Company.

Besides industrial and infrastructure development, China is willing to extend its expertise to revive agriculture in a big way in Angola, as it has all the essential prerequisites conducive for farm production of wheat, rice, cotton, vegetables, herbs and tropical fruits. China eased Angola’s investment in new agricultural machinery and rehabilitation of irrigation systems in various localities.

China’s interest in Angola stems from its need for crude oil. Angola is Africa’s second largest producer of crude oil and has been a steady supplier to China for many years now. Chinese investment in developing infrastructure for oil processing has also been substantial. A new huge refinery is being set up in Lobito by a consortium of Chinese companies namely Sinopec and Sonangal. Other exports from Angola include scrap metal and diamonds. Diamonds from Angola find their way into Hong Kong, where they are cut and made into jewellery.

Angola offers a ready market for Chinese goods, and Angola requires high quality products. But the present economic downturn due to the worldwide financial crisis has led to declining demand levels.

Source : China Africa

China’s Food and agriculture fund for Africa

Vendredi, mars 27th, 2009

The Food and Agriculture Organization is going to carry out a $ 30 million trust fund being set up by China for supporting agricultural projects in Africa. The aim is to improve farming output in the developing African countries and help them achieve Millennium Development Goals. The fund is meant to last for three years and will get $ 10 million each year. The fund comes in addition to the technical assistance China has been providing to African agriculture for the last few years. Africa has all the resources to ensure high agricultural output, but has never been successful. In the last four years China has posted some 400 experts in developing African countries. With this Trust, China has cemented its role as a global player in developing countries.

The China Development Bank has granted loans worth millions of dollars to agricultural processing firms in East Africa. Chinese assistance has been provided to plan crops of cereals as well as cash crops like rubber and pine. Angola has received a $ 1 billion agricultural loan from Beijing to improve the sector after decades of war. Senegal recently signed a deal to sell 10,000 tons of groundnut oil to China during Chinese premier Hu Jintao’s visit.

After all its investments in mining, infrastructure and industry, China seems to have focused on agriculture now. Its interest in oil is not just for crude, but also olive oil. The global recession is being used by Beijing to push investment in primary commodities, and agriculture in African offers enormous scope for improvement and investment. However, it is not buying farmland, instead it is providing technical expertise and equipment to increase food grain output which would be mutually beneficial. China is convinced that agricultural development is the best way to alleviate poverty in rural Africa. Increased output would also keep food prices at affordable levels for the locals. Eventually, Africa’s agricultural sector must also be able to post profits, as non-profit production cannot be sustained for long. Chinese agricultural investors, who made profits in one African nation, are spreading their interests in other countries as well.

source : China Africa

China – A Towering Presence in Africa

Jeudi, mars 12th, 2009

China has left its mark on Africa from Morocco to South Africa. Its presence is conspicuous in oilrigs and factories, roads and railways, developmental projects and social welfare programs, education and cultural programs. This was the observation made by Adam Clayton Powell III, the Vice-Provost for Globalization at the University of Southern California. This phenomenon is also consistently increasing.

Chinese tourists are seen everywhere in various African destinations, much to the advantage of Africa’s tourism industry. Energy and raw materials are targets for Chinese imports, but the level of interest in Africa seems to form part of a grand strategic plan of China’s leadership, culminating in an African push of this magnitude. China is not just an “oil-thirsty giant”; it is revealing a commitment to African development as reiterated by Chinese leaders on their recent trips to African nations. These were goodwill trips to non-oil producing countries to show that Africa would get support from China despite the global economic slowdown. China is also the world’s largest per capita consumer of minerals and metals, and is well aware of Africa’s ability to provide these, as the African continent has 90% of the world’s platinum output and 30% of base metals, not to mention 50% of the world’s gold.

Chinese companies operating in Africa are steadily increasing in number. In terms of volume of trade, figures in January 2009 reveal that Angola became China’s largest African trader with trade volumes crossing the $25 billion mark. Chinese creativity and flexibility is evident from the strategy of its Exim Bank allowing heavily indebted African nations to pay for infrastructure projects in kind, using their natural resources.

Its overall development apart, each African nation benefiting from Chinese aid and investments, is cooperating with China due to its policy of keeping political issues segregated from economic ties. All of China’s business relationships are in no way affected by political or human rights issues. China has a presence in 47 African countries including some of the world’s poorest nations, and it participates in a diverse set of industries from information technology to food products and agriculture.

Source : China Africa

China’s Reaching Out to Africa-Reasons for Trade

Samedi, mars 7th, 2009

Every move made by China towards any African country, catches the world’s eye. Chinese leaders making trips to Africa evince great interest and the rationale behind the trips is analyzed and dissected. China is certainly sending strong feelers to African nations, and is getting a positive response from them, simply because China has lots to give. China is perceived by the Africans as the land of enormous opportunity, a country that will provide aid without strings, bring in expertise, develop infrastructure, and invest extensively to pull the countries out of poverty and underdevelopment. The past of the two sides have been similar, except that China surged ahead, and today presents a model for growth to Africa. In return, China has managed to get materials and markets that were not available in any other part of the world. At present, Angola is the second largest provider of crude oil to China, followed closely by Nigeria. It has also procured African copper, zinc, cobalt and uranium. China is making its presence felt in all parts of the African continent, with its oil survey teams in Libya, Egypt and Morocco, it sells arms in return for natural resources in Algeria, Ghana, Benin, Congo and Angola. Extensive trade with Kenya, Sudan, Tanzania and Zambia keeps Chinese ships sailing in and out of every part of the African continent. Mutual economic benefit is the deciding factor for every economic partnership entered into by the two sides. Though one side has more to give in terms of natural resources, the other has a phenomenal amount of talent, expertise and technical know-how that will help tap these natural resources for maximum returns..

However, China has also been affected by the worldwide economic downturn, and part of the plan to stem unemployment and stimulate demand, is to send unemployed migrant workers to farm in Africa. Africa has plenty of fertile land, and needs to replicate the Chinese model of agriculture to increase output and produce world quality natural products to benefit economically. This plan of China would merely be an extension of the previous Sino-African agreement whereby some 400 Chinese farmers were given access to cultivate nearly 10,000 hectares of land.

Source : China Africa