China Africa investment

Lundi, mai 4th, 2009

Over the years, while western countries were flourishing and spending freely, one country was quietly building up its reserves with its exports to the west, cautiously spending where necessary and saving whenever possible. This was China, one of the least affected countries in the global economic downturn, and the dragon has lifted its head to look around and find worthwhile investments all over the world to use up its $2 trillion of reserves, partially if not fully. The timing could not have been better as the worldwide credit crunch has brought down prices and great bargains are available to one who can make cash down payments. The head of China Investment Corporation, Lou Jiwei, is back in Europe with $200 billion wealth fund to buy assets, some of which were refused to his fund in 2008. This proved to be a blessing for his fund as it helped to avert losses for the Chinese.

Chinese oil companies are competing with their western competitors to gain rights to drill in new reserves of oil. A Chinese state owned oil company is trying to buy assets worth $5 billion in Libya and Sudan after the merger of Suncor Energy Inc with Petro Canada did not come through. The company in question is China National Petroleum Corp. one of the two top Chinese oil firms. The Chinese company, Sinopec has expressed its interest in acquiring large businesses in Africa along with South America. Similarly China’s state-owned company and subsidiary of china Minmetals Corp., Minmetals Development Co.

Ltd., is buying chrome assets in mines in South Africa, and is willing to spend up to $81 million on it. China has invested in getting land rights for agricultural purposes in sub-Saharan Africa as well. Its investments span over diverse fields and China is making its presence felt in all upcoming fields where growth potential is very high. China Mobile, the country’s largest telecom operator has been hunting for a partner to buy assets valued at $2 billion from its South Africa-based peer MTN. This is part of its overseas expansion exercise, which includes other countries as well.

Source : Suppliers Africa



China Africa economic

Mardi, avril 7th, 2009

China has won accolades as the most popular partner of developing countries. This came its way from the Tanzanian President Jakaya Kikwete at the G20 summit. China has certainly been playing an active role in the global economic arena, trying to tone down the impact of the economic crisis by promising aid, increasing trade relations with developing countries particularly those in the African continent. It has written off bad debts and is using its surplus currency reserves to invest in developmental projects in Africa, thereby generating employment and entering sectors that the western nations walked out of, due to the crisis.

China is not merely a quiet investor and trading nation for Africa.  Not only has it moved towards acquiring raw material assets in Africa, it has boosted infrastructure development with its investments. It is sharing technical expertise, helping in improving agricultural output, and ensuring a market for African goods that were losing out as western demand fell drastically. For many African countries, China is the biggest export market. China is adopting every possible strategy to get Africa on to the fast track of development, and is showing its responsibility as an Asian powerhouse and a global economic leader. The first of its kind, an 88-day expedition is starting at Ghana, organized by the Yunnan Committee of the Chinese People’s Political Consultative Conference. The expedition will cross seven countries including Ghana, Burkina Faso, Mali, Niger, Algeria, Libya and Egypt, culminating at the Red Sea and involving a trek of over 7800 kilometers. This is the first time a Chinese team has ventured to cross Africa from the West to the East. Besides studying environmental issues like desertification and preservation of habitats for wild life, the members of the team will serve as goodwill ambassadors for China, and also enhance awareness among their Chinese countrymen about Africa’s developmental and investment potential and tourist charm. There is a growing Chinese middle class with funds to spare for recreational activities, and China is prodding them towards exploring the beauties and bounties of nature that Africa has to offer.

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