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    China Is One of Many Countries Acquiring Land For Agriculture

    Mercredi, juillet 22nd, 2009

    For centuries, agricultural output has been exported by countries with surplus produce and imported by countries that could not grow adequate amounts of food grain and other naturally grown foods. The current trend is an alternative to import of food grain. This is accomplished by taking foreign farmlands on long lease to grow food grains needed in one’s country. Many countries with limited supply of cultivable land but ever increasing populations have found thousands of acres of unutilized fertile land in African countries. These countries include Saudi Arabia and China to name only two. The outcome is a positive impact on both the countries, where the agricultural activity is initiated and also where the agricultural produce is consumed. The poor nations need the capital the lease of land will get even though they may have starving millions in their own countries. This easily procured capital would help make crucial investments in developmental projects. The leasing countries justify their entry into agriculture in foreign lands by stating that they bring in new hybrid varieties of seeds, newest agricultural techniques that have been successful in their own countries, and employment to the local labor force as well. A section of foreign experts perceive this to be a policy of ‘land grab’.

    China has been seriously pursuing agricultural activities in Africa. It has been revealed that China will be sending 1 million farm workers to Africa in the course of the year. China will be starting the world’s largest palm oil plantation in Congo. Covering an area of 2.8 million hectares, the palm oil plantation would be used for bio-fuels. Next in line for China is Zambia where it is in the process of finalizing a deal to grow bio-fuels on 2 million hectares of land. Besides growing crops for its own country, China is helping African agriculture to develop for its own progress. It is teaching newest techniques of farming, shifting from subsistence agriculture to growing cash crops that will ensure greater financial returns, and also providing education in the field by setting up Agricultural institutes in reputed universities.

    Agriculture is the third in the row of economic activities that have scaled borders to make the world a unified market place. It started with the exchange and outsourcing of technological innovations, followed by outsourcing of information technology skills. Agriculture is being pursued abroad by both private and government-owned companies.

    Source : Chinafrica

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    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

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    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

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    The $9 Billion Deal Between China And Congo Stands Without Any Changes

    Jeudi, juin 4th, 2009

    An investment accord to the tune of $9 billion was signed last year between China and the Democratic Republic of Congo. The accord is under threat from the IMF, which wants it changed or else debt relief measures would be withheld. However, China has refused to comply and is proceeding with its side of the accord.

    As part of the deal, China has been able to get rights over deposits of 600,000 tons of cobalt and 10 million tons of copper through its state owned companies China Railway Engineering Corporation and Sinohydro Corp. In turn, China will help develop the infrastructure of the country like wide roads, railways, schools, hospitals and universities, the cost of which would equal $6 billion. Another $3 billion would be used for mining purposes. Mining forms 14% of the Republic’s total economic output, and the industry is facing a difficult time due to the decline in the demand for metals from its old buyers in the western nations, which are reeling under the recession themselves. The entire deal is being funded by the Export-Import Bank of China, which has accepted the risk involved in a deal of this size.

    The IMF coming in the way of the accord between China and the Republic of Congo is seen as the first attempt by the international organization to influence the pattern of Chinese investments in the African continent. It has threatened to withhold the aid that was to accrue to Congo equaling $10 billion in debt relief besides $500 million in financial support, if the accord is not modified. The loser in the whole affair is the people of Congo who have had to live through two civil wars between 1996 and 2003. The economic growth of Congo has slowed down anyway in response to the global economic downturn. It is likely to be in the range of 2.7% in the current year in contrast to 6% last year.  It is burdened with interest payments on debts incurred previously and desperately needs all the support provided by China. Sinohydro and CREC have invested millions already in their mining projects.

    Source : Chinafrica

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    Conferences at Johannesburg

    Mardi, mai 26th, 2009

    The fact that China is scurrying to mop up asset bases and gain control over crucial mineral resource reserves has become a topic of serious discussion at seminars and conferences, the latest one being held at Johannesburg two days ago. China has an edge over western nations and western countries interested in these resources, firstly because China has gained popularity with African governments due to its economic support for infrastructure building and overall development, and secondly because it has vast cash reserves to fund the acquisitions. On the other hand, the onset of the global financial crisis had seen Western nations withdraw aid and support to Africa as they themselves were reeling under immense pressure. These nations are unable to match the numbers or raise funds needed for the acquisitions. It is a race they are likely to lose to the Chinese.

    For China the timing is most favorable as the recession has also led to a slump in prices, therefore, it is the right time to clinch deals. Most of the Chinese companies expressing interest in making these acquisitions, are state-supported, so they need not worry about the need to placate shareholders who may object.

    China has been cautiously reformulating its Africa policy and trying to wriggle out of investments unlikely to yield results or those that are threatened due to political instability. It is proceeding ahead with only those ventures that are viable and beneficial. China has a contract with Guinea where it is developing infrastructure facilities in exchange for bauxite and has signed a $9 billion deal with Congo to develop its roads, schools, hospitals, and railways, and in return gain access to its copper and cobalt reserves. These minerals are crucial for China’s consistent industrialization and advancement. Zambia has also selected the NFC Africa, a subsidiary of China Non-Ferrous Metals Corporation, to run its Luanshya Copper Mines that are being reopened after being shut during the beginning of the recession.

    Another sector where China has extended support is the banking sector, besides writing off African debt to the tune of millions of dollars.

    It is difficult to gauge or exactly state who benefits more, China or Africa. The only known fact that the world sees is that both sides are happy, Africa with what it is getting in terms of economic elevation, and China, with all the resources it so desperately needs.

    Source : Suppliers Africa

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    Huwaei Technologies Leads the Way For Chinese Firms into Africa

    Jeudi, avril 30th, 2009

    Huwaei Technologies has become a well known worldwide as a non-state owned Chinese multinational, which is one of the biggest producers of telecommunications equipment internationally. It has made inroads into every market in the world with its fixed networks, mobile networks, optical networks, software, terminals and data communications.

    In Africa Huwaei Technologies started out in 1998 with its first operational setup in Kenya, and has now become the largest CDMA provider in the entire region. Its sales crossed the $ 2 billion mark three years ago in 40 African countries. The company has successfully got rid of the preconceived notions people have had about ‘made in China’ goods that they are low in cost and poor in quality. Huwaei has proved that it is positively low in cost but provides excellent quality and value for money. It has also earned the reputation of providing excellent customer service. The Chinese attitude towards work ethics and building relationships, which reflected in the company’s working, helped build the large empire in Africa. For Huwaei Technologies, Africa was not just a vast market; it was also a training ground that was going to help it build its global brand.

    For Africa the company has helped set up a communications infrastructure that has transformed the lives of the African people by easing their communication issues and has provided jobs to 400 people in Kenya and 3000 in the whole Sub Saharan Africa region. Huwaei has its headquarters in Kenya to service neighboring countries like Uganda, Tanzania, Congo and Ethiopia among others.

    The growth graph of Huwaei Technologies and the strategies adopted by the company to establish their network in African nations is a role model for other Chinese companies. It has worked hard to dispel old misconceptions and prove its credibility and commitment to African development. Its superior customer service network has been a big factor in its success. That is one of the reasons that the company’s performance has not been affected by the recession. Other Chinese companies need to study their strategies if they wish to do well in the African continent.

    Source : Manufacturers Africa

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    Strategic Moves in Africa Signal China’s Long Term Plans

    Mardi, avril 28th, 2009

    China has been comparatively less affected by the global economic crisis, and it has been using this time to formulate long-term strategies and put systems in place to achieve its goals. It has been buying manufacturing units in African countries, consolidating its hold on supply of raw materials, taking fertile agricultural land on long lease, contributing $40 billion to the IMF, and trying to assert its position in global economic forums.

    China has done all this and has gone a step further to use this time to rethink its old commitments and withdraw where it feels it may have erred or pushed ahead too fast, and also take corrective action where fingers are being pointed towards its participation. In its initial attempts to assist African nations, it had provided unconditional economic aid and support to many countries so that they could develop their infrastructure facilities so that their citizens could enjoy a better quality of life. At that point in time the Chinese had a single-minded commitment to growth at any cost. But times have changed and many African nations have not been able to show results of the kind China wanted to see. They remain politically risky and human rights abuse continues unabated. Hence, the rethink on the part of China to withdraw, and pursue investments in places where growth can be sustained and that too, without global criticism.

    Congo and Guinea are two African countries that have seen plenty of Chinese funds flowing in for investment, as china saw enormous potential. Today also, the countries remain as unsafe and risky as ever before. Therefore, China has decided to scale back its operations in these two African nations, and keep in mind the risk percentage before making further commitments. This would in no way affect the total amount of investment China has put aside for Africa, it may only imply that China would look for other places to assign funds that were meant for these countries. Perhaps China would now prefer in invest in nations that are stable, law-abiding, and democratic in terms of leadership, to ensure the best prospects for its fifty years of investing in Africa.

    Source : Suppliers Africa

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    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

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    Exploring more of Africa for investment

    Lundi, février 23rd, 2009

    Chinese investments and interest in African nations have been noticed all over the world. However, infrastructure projects apart, many private enterprises set up by the Chinese in countries of Africa, are in the intermediary stages. The stage of transition is the initial entry of an enterprise in a foreign country when companies set up trading activities. They use this time to explore the business potential as well as possibilities of setting up manufacturing units and understand the local market.

    A typical case in point is the Wenzhou Hazan Shoe Company in Nigeria. It entered Nigeria in 2004 to build factories where half finished goods from china, were assembled. However, by 2007, the Shoe Company had invested US$13 million in Nigeria. Today it is the largest manufacturer of shoes in the whole of Africa having a huge space of 40,000 meter square for production unit. The worldwide economic slowdown has affected Chinese exports to Europe and America, but exports to Africa continue at the same levels.

    Interest in Africa has encouraged many private entrepreneurs to visit Africa to gain first hand experience about the country and its market. The majority of Chinese private investment is in processing industries and trade in fields of consumable goods, food, pharmaceutical goods, light manufactured goods, electrical equipment and building material.

    The Republic of Congo and China celebrated the 45th anniversary of the establishment of diplomatic ties between the two countries. The government of Congo expressed gratitude for the support it had received from China. The African countries known more for the abject poverty suffered by their masses have benefited tremendously from Chinese investments in infrastructure facilities.

    Sino-African ties in trade and commerce have been along the lines of the Five Principles of Peaceful Coexistence. That both countries have benefited mutually, is evident from their ability to cope up with the financial crisis affecting most countries. The trade between these two countries has crossed the $100 billion mark two years before the bilateral target for trade. The Chinese business policy has been termed by many as a willing-buyer, willing-seller one. China does business with a profit motive and what it gets from Africa in terms of oil, natural resources etc helps prop up its own developmental plans. Its workforce gets employment opportunities and its industries can sell what they produce.

    China has interests in Africa’s resources and mining potential. To read too much beyond this into Chinese intentions is a bit unfair on a simple business strategy.

    Source : Manufacturers Producers Chinafrica

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