China defends its policies in Africa

In the Wall-Street Journal, China’s vice commerce minister pushed back against Western criticism of China’s activities in Africa saying that  they are “more market-driven”

Economic activity in Africa has surged in recent years, with Beijing becoming an important investor, creditor and donor for many African nations. But with the rise of China’s influence upon the continent, concerns persist that Beijing is preying on the continent’s resources to feed the Chinese economy, contributing little significant improvement to African livelihoods.

Amid such criticism—and as China asserts that its presence in Africa is increasingly being shaped by nongovernment actors—Beijing has put in place some mechanisms to deal with issues surrounding its investment and trade on the resource-rich continent.

“China’s presence in Africa is becoming more and more market driven, the actors operating there are diverse, there are many models, and the areas they are in are broad,” said Fu Ziying, the vice commerce minister, in a recent interview. “The Chinese government is more and more aware that as the economic and trade cooperation between China and Africa evolves, there need to be some laws and protections in place.”

In a rare discussion about China-Africa ties, Mr. Fu, the senior trade official in charge of China’s Africa portfolio, spoke about what he termed the misunderstandings surrounding China’s presence in Africa.

In response to questions about some sensitive cases in the past year related to China’s moves in Africa, Mr. Fu’s comments suggested there were limits to what the government could do, shedding little light on the controversies.

Last year, a Hong Kong-based entity named the China International Fund struck a massive, $7 billion mining and infrastructure deal in Guinea that gave it, through two Singapore-registered entities, sweeping concessions to the mineral riches of the West African nation. Guinea authorities are now investigating the deal.

Company filings and other documents show that some CIF executives have ties to a Chinese state-owned enterprise. Mr. Fu reiterated denials by Chinese government officials that the government has any involvement in CIF.

“This fund is entirely built by individuals, and it has absolutely no government or Chinese state-owned company background in it,” Mr. Fu said, adding that the Chinese government took the step to “inform relevant countries” that no such fund is registered in China.

Meanwhile, when asked about the investigation by Namibian authorities into alleged bribery involving Chinese security-equipment provider Nuctech Co., Mr. Fu said the matter was a civil-commercial dispute, arising from commercial competition, and that the Chinese government wouldn’t intervene in such cases.

Mr. Fu, who accompanied powerful Politburo member Jia Qinglin to Namibia in March, said that the Nuctech case hadn’t come up during the visit. Neither Nuctech nor its parent company has commented on the investigation.

The probe, which emerged late last year, is sensitive because the Communist Party Secretary of Nuctech’s parent company is Hu Haifeng, the son of Chinese President Hu Jintao. References to the case disappeared from Chinese news websites soon after the story surfaced.

Mr. Fu also expressed frustration over persistent criticisms against China by Western nations and multilateral development agencies, which have cited Beijing’s lack of transparency in its dealings in Africa and that the financing it provides without conditions on better governance or tackling corruption sets back the local economy.

“It’s like marriage. The husband and wife are happy. Their happiness quotient is very high. But suddenly you have someone beside you that keeps criticizing the marriage,” he said. “If Africa has a criticism about China’s investment in Africa, then that is a problem.”

China’s engagement with Africa has begun to be studied only in the past few years. One recent study by the Centre for Chinese Studies at South Africa’s Stellenbosch University and the Rockefeller Foundation listed the development of local worker skills and labor rights as key challenges that may determine whether Africans will benefit from China’s presence on the continent in the long run.

The study also recommended more joint ventures be set up between African and Chinese companies to transfer technology and build capacity and an increase in the role of African civil society in project consultations.

This year China-Africa trade will exceed $100 billion, and the growth in bilateral investment is likely to enter its fastest period in the next five years, Mr. Fu said. Last year, trade between China and Africa fell to $91 billion amid the global financial crisis, from $107 billion in 2008, according to Chinese government data.

In 43 African countries, China and the corresponding African nation have set up a joint committee that convenes to discuss economic and trade issues when needed, Mr. Fu said. Such committees often don’t meet more than once a year, and Mr. Fu indicated that there are cases that end up outside of that framework. But he claimed that, along with agreements on bilateral trade and investment protection, they offer a way to smooth burgeoning ties between the two developing economies.

Mr. Fu also responded to a question about a case involving investment in the other direction, from Africa into China. South Africa’s Sasol Ltd. in December submitted a plan with its Chinese joint venture partner to build a plant that will convert coal to liquid fuel in China. The project, estimated to cost $5 billion to $7 billion, would be among the largest by an African company in China.

However, a document prepared by the local-level economic-planning agency in Ningxia, where the plant will be located, said that the review of Sasol’s plan was being delayed to await a rival plan based on Chinese technology. Sasol has said it remains confident in the project.

“This [Sasol’s] project hasn’t been rejected,” Mr. Fu said, adding that at issue is still a broader question of whether it is better to stick to using crude oil or convert coal to oil for China’s energy needs.

Mr. Fu himself led a delegation in April to five African countries: the Central African Republic, the Republic of Congo, Gabon, Liberia and Chad.

In Liberia, where China is carrying out a $2.6 billion project to revitalize the iron ore Bong Mines, Mr. Fu said his group convened a roundtable with senior representatives, including ambassadors, from the local embassies, including ones from the U.S. and EU, along with foreign and local media.

Mr. Fu said the roundtable, including another one set up while he was in Gabon, was done to address the misunderstandings of China in Africa.

China’s business with Africa.

More discussion on China in Africa.

China in Africa : Friend or foe for the European Union?

More detailed discussion if China is a constructive partner for Africa or new colonist.

China accused of neo-colonialism taking Africa’s resource away.

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