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    Kenya Turns Eyes Towards China For Growth And Development

    Vendredi, octobre 23rd, 2009

    For all African countries, the first nation that comes to mind when they think of external participation and support for their development, is inevitably China. China has become a towering presence in the African continent, and they like its no questions asked attitude when it hands out doles, aid, loans or even technical expertise. Thus, while some of its deals are rendered questionable by international peace and human rights standards, many others are laudable since they have initiated the process of development in grossly underdeveloped countries.

    Kenya, the well-known east African country located along the Indian Ocean, has dispatched a delegation to China for discussing possibilities of alliances between the two nations to develop a port in Lamu and development of a rail and road network till Kenya’s borders with Sudan and Ethiopia. The high-profile delegation is led by Prime Minister Raila Odinga, who prefers Chinese involvement to other countries because of the “full package” provided by China in terms of funds and technical expertise. Spurred by massive Chinese investments in other African countries like Guinea where it has committed billions of dollars for infrastructure and oil, and Nigeria, where it has bid for six billion barrels of its oil reserves, Kenya also wants to claim a piece of the investment cake.

    At present, CNOOC, one of China’s three big oil companies, is starting oil exploration in Northern Kenya in October, besides the exploration rights it has over a second block in the Lamu basin. If China agrees to support the development of the Lamu port, the “second corridor” of Kenya would develop at a rapid pace. The “second corridor” is he name given to the development of the rail and road network towards the Kenyan coast along with the Lamu port. This would help in the development of northern Kenya, so far lagging behind, and also provide an alternative route for Southern Sudan’s oil for export. Kenya’s development would be immensely beneficial for the neighboring countries of Ethiopia and Sudan. China has large projects under way in both these countries and the development of Kenya’s second corridor would prove beneficial to Chinese interests as well.

    Source : Business Africa

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    China’s CNPC Emerges Winner of Engineering Contracts In Sudan

    Mercredi, octobre 14th, 2009

    The China National Petroleum Corporation claims that one of its subsidiary companies, China Petroleum Engineering Construction Corporation (CPECC) has emerged the winner out of 13 bidders for 7 engineering contracts in Sudan. India was one of the bidders and a close competitor. Sudan holds the fifth largest crude oil reserves in the African continent. CNPC is the largest oil producer in China, and stated that in September, one of its units was selected for a $260 million contract for engineering and construction for an area called Block 6, an oil block.

    CNPC is also the parent company of PetroChina, a company listed in Hong Kong. It has been granted a $30 billion loan meant for funding overseas expansion projects in its persistent search for oil and energy sources beyond Chinese territory. CNPC is also responsible for the development of the first oilfield in Sudan. The present contracts are for various projects, including the expansion of a power plant, the CPF station expansion assignment, the construction of two 50,000 cubic meter crude oil tanks, the FNE Flow station, the Jake Flow station, the installation of a power grid system and oil well development. CPECC has already initiated the process of designing and making purchases of raw materials. According to the statistics released by the U.S. Energy Information Administration, till January, Sudan’s oil reserves stood proven at five billion barrels. Most of the reserves are found in the Melut and Muglad basins in the southern part of Sudan.

    Chinese companies enjoy a distinct advantage over others for securing infrastructure contracts due to the strong ties between Africa and China. China has risen to be the largest foreign investor in Sudan by substituting for U.S. interests in the country. With its own consumption of 8 million barrels per day according to 2008 figures, it needs to ensure a continuous supply of oil, the natural resources for which it does not have. Hence the dependence on countries like Sudan. In exchange, it is willing to pump in millions into infrastructure development and other avenues for the growth of Sudan.

    Source : Business in Africa

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    China Strengthens Its Hold Over African Oil

    Mercredi, juillet 8th, 2009

    China consistent endeavors to secure its supply and sources of natural resources and minerals has seen strategic moves for mergers and acquisitions, including bids for companies that operate in Africa. In keeping with this strategy, China’s oil giant Sinopec, a company fully owned by the Chinese government, has made a $7.22 bid to takeover Addax Petroleum. Addax has oil fields off the West African coast, and this would give China access to the oil produced in these fields. This would be over and above what China gets from Gabon and Sudan. Addax seems pleased with the takeover bid with its senior officials agreeing to sell their 38% stake that they hold in the company.

    Addax is a Switzerland based company though it is registered in Canada. Canadian rules require government approval of large acquisitions, though it is not yet clear whether it is required for the Sinopec bid.

    Addax has a time period of 35 days to accept the bid after which Sinopec will get charge of the African oil fields. Sinopec is using every opportunity to grab companies involved in exploring oil and China in general for other natural resources crucial for its growth and development to scale greater heights. Some of Sinopec’s previous attempts were foiled by political impediments, but it has been patiently waiting in the wings while stacking up its earnings to have considerable amount of cash to fund deals. These deals are also transforming Sinopec into a truly global company which will no longer be confined to refining oil, but have direct access to sources of oil overseas.

    Addax oilfields include operations in Nigeria where militants pose a constant threat to oil drilling operations, but Sinopec has perhaps already figured out ways of operating in such risky places. The deal is particularly attractive since it is going to be the biggest acquisition of natural resources by any Chinese company. China also seems to be the only country with cash to spare and willing to make cash down payments for its acquisitions. Cash strapped companies desperate for an inflow of cash, need just that.

    Source : China Africa

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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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    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

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    G-20 –what is that?

    Vendredi, avril 10th, 2009

    All the across the world, economists believed that G-20 in London this year meet was a tremendous success. There were some excellent agreements that the nations backed. One of them was raising $1.1 million dollars to help the world in sustaining the global economic recession. In the final talks and resolutions it was agreed that more money should be given to the countries that fit the poor standards of living. This included $500 billion fund from IMF to the “under pressure” economies. Out of this capital, $100 billion is for the poorest nations.

    Ironically Africa has the maximum number of poor nations, but it was not mentioned anywhere in the 30 page final statement. And on the contrary Africa is mentioned as a developing nation.

    Even though China, India and Brazil lead the pack of the poor countries at G-20, it was only South Africa that could get some place in the G-20 meet.

    China invests in Africa

    China is making a huge Foreign Direct Investment in Uganda thereby reversing the global recession. As a matter of fact China has surpassed Britain’s position in the FDI category and has massively invested in Sudan, Nigeria and other African countries. China was ranking 8th in the FDI investments in Africa from many decades. But it now stands at number 2 as being the 2nd largest source of FDI. This is because of the huge amounts that it is investing and promising to invest here. China has opened around 12 projects that are valued at $13.5 million. These projects are likely to create 1,495 jobs in the near future in Uganda. The bio fuel industry is also getting attention and China is investing $50 million in it. It is likely to create 2,087 jobs in Uganda.

    Thus even though there is a financial crisis in the entire world, Uganda is actually stable and getting more and more FDIs. In the first quarter of this year, Uganda has given license to approximately 83 planned investments that are worth $223.4 million. This investment will produce a total of 13,000 jobs. Once these projects initialize Uganda’s economy will be given a boost.

    Source : China Africa

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    Rising exports from China to Africa

    Mardi, mars 24th, 2009

    Last year China exported goods worth $50.8 billion and the rise was estimated at a whopping 36.3 percent. The import of goods from Africa rose to 54% by a stunning $56 billion. These reports of February came from the customs data department and were reported by Xinhua, which is the Chinese news agency.

    These kinds of investments will further secure China’s presence in the continent of Africa in the form of accessing its natural resources. This is benefiting Africa also, since it is getting good attention in the times of global recession.

    China buys two thirds of Sudan’s petroleum exports. This has catapulted in the backing up of the dropping of criminal charges (by China) in the International Criminal Court, against Omar-al Bashir, who is the president of Sudan.

    Chinese President Hu Jintao has come into an agreement with the state of Tanzania for providing loans to buy the equipment related to farm machinery. In addition the agreement will allow the Chinese advisors to provide support in developing the infrastructure. The Chinese president has assured Tanzania to import more of its goods from the country in order to help preventing it from swirling down the global recession.

    Global recession is taking a toll on the world’s large economies. The smaller and the emerging economies like Africa are further succumbing to the pressure. More and more job cuts are creating panic and unless any other country helps it, this continent will face permanent depression. China is exactly doing that and becoming its benefactor. Recently, in February President Hu Jintao signed a mutual agreement in which Senegal, (another African country), will receive over $90 million in loans.

    This year in January, Chinese Foreign Minister Yang Jiechi signed a bilateral agreement in which $90 million will be given to Malawi to construct hotel conference center in its capital city, Lilongwe. China is also providing support both technological and financial, in building Parliament House and an expressway linking Zambia to North of Malawi.

    In July last year, Russia and China vetoed a UN Security Council resolution which recommended worldwide sanctions against President Robert Mugabe. The accusations against Robert Mugabe were of the nature of crushing the democratic rights and spoiling the nation’s economy.

    Source : China Africa

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    China’s Economic Influence spreads further in Africa and Beyond

    Mardi, février 24th, 2009

    China has caused tremors in the Western world with its earnest effort to provide economic support to countries in Africa and other continents. Support includes import of much needed oil, minerals and other natural resources imperative for its own economic development, and exports of finished goods produced in China at very low costs. Chinese exports have made it cash rich with phenomenal cash surpluses at its disposal for investments in other countries. It is also being referred to as a “lender of choice”.

    Close on the heels of the Chinese President, Hu Jintao’s “friendship and cooperation tour” of Africa, has come the news of YTO, a Chinese manufacturer of agricultural equipment, planning to construct five assembly lines in the next five years across the African continent. A tractor plant is being planned for Kenya. The joint venture between the company and the China-Africa Development Fund involves investment funding to the tune of CNY 250 million.  YTO has been exporting agricultural equipment to Africa for nearly four decades, and has an established network to sell its machines.

    Sudan, Africa’s largest country, was buckling under economic sanctions imposed on it, but China’s pitching in has saved its oil production, which is seeing rapid growth. Its oil fields are run by a consortium and are headed by the state owned company called CNPC-China National Petroleum Corporation. The CNPC has chosen Africa as the destination for one of its five overseas oil and gas cooperative regions. CNPC’s longest and largest foreign presence has been in Africa.

    In a recent statement from the UN, African countries were among those cited that need to alleviate poverty through wealth creation rather than aid, by focusing on establishing manufacturing industries to enhance employment opportunities. The example cited in the report is of the poor Chinese village of Qiatou, which has grown from a poor rice-growing village to the manufacturer of two-thirds of the world’s buttons. This is just one of the Chinese success stories that Africa can learn from and base its developmental models on. It has the added advantage of Chinese support as China has reiterated its commitment to African development time and again.

    China will be adding a 5 billion dollar fund to the China-Africa fund to enable the Chinese companies to invest in Africa. Also China has offered to train 15,000 African professionals. The China-Africa bilateral trade volume has increased to $106 billion since the time of its independence.

    Source : Agricultural Tractors

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