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Sunday, March 24, 2013

China’s Charm Offensive in Africa

Once every two decades China’s leadership transition occurs simultaneously with the US presidential election. Barak Obama was re-elected president for the last 4 years of an 8-year term and Xi Jinping was anointed as chief of the Communist Party and China’s president for the next decade. Both Obama and Jinping have been on their maiden presidential outing.

US President Barak Obama just returned to Washington from Israel; his first visit as president and the first foreign trip in his second term. His visit was crowned with a speech, which simultaneously calmed Israelis fears and nudged them toward a peace agreement with Palestinians. Obama reassured Israel that “as long as there is a United States of America, Atem lo levad: Hebrew for you are not alone.” On Iran Obama was clear,  “America will do what we must to prevent a nuclear-armed Iran”.

Eight days after his installation the world’s second most powerful man, Xi Jinping, visited the Kremlin. Russia is one of the world's top energy producers, and the visit included signing a $30 billion deal with Rosneft, Russia state-owned oil company. Russia is a priority in China’s foreign policy, to counterbalance the US on diplomatic flashpoints such as Syria, Iran and North Korea.

Xi Jinping’s first stop was Dar es Salaam. China has historical geopolitical interests in Tanzania. In the 1960s Mao funded the 1,800 km Tazara railway. With financing from Export-Import Bank of China, Chinese companies will construct a 542 km pipeline from Mtwara to Dar es Salaam. The project will cost $1.2 billion funded by a loan from the. Bilateral trade between China and Tanzania reached $2.47 billion dollars in 2012.
Today Jinping is in Durban, South Africa, to attend the 5th BRICS summit where Brazil, Russia, India China and South Africa are expected to launch a joint infrastructure-focused development bank and a foreign exchange reserve pool, challenging the dominance of the World Bank and IMF.

His last stop is the DR Congo with whom China signed a massive resources-for infrastructure deal.  China will provide $9 billion to finance construction of roads, railways, hospitals, schools, dams and development of mines. On their part, the Congolese government will provide the China with up to 10 million tonnes of copper and hundreds of thousands of tonnes of cobalt. The value untapped resources – cobalt, diamond, copper and gold, hydropower – of the DR Congo are estimated at $24 trillion – three times larger than China’s annual GDP. 

Xi Jinping’s charm offensive is designed to cast China not as exploitative but as a benevolent trading partner deeply engaged in Africa's long-term development. Bilateral trade between Africa and China soared from $10 billion in 2000 to $200 billion today, making China Africa’s largest trading partner. China has offered soft loans worth more than $15 billion to Africa. Many analysts believe that China's direct investment and aid have catalyzed the continent's rapid and sustained economic growth.
China has created a network of trade investment, with over 2,000 Chinese companies operating in 50 African countries. Chinese firms have built more than 3,000 km of roads, over 2,000 km of railway, pipelines and ports in Africa by August 2011. Figures from the 5th Forum on China-Africa Cooperation ministerial meeting in July 2012 reveal that China has pledged to build some 100 schools and 30 hospitals. Over the next few years China will train 5,000 agricultural technicians and set up 14 major agricultural technology centres across Africa. China has also launched an $8-million program with the UNESCO to support educational development in Africa.
So far, China’s influence has not damaged African democratic institutions. China must support the strengthening the institutions of transparency and accountability in Africa’s extractive sector. Although China is currently self-sufficient in grains, it must resist the temptation to grab Africa’s agricultural land. There are indications that China is getting interested in African farming because it will need to import circa 100 million tonnes of grain in the next 20-30 years.
China will overtake the US as the biggest economy by 2016, according to a new report by OECD. But with great power, comes great responsibility. As the epicenter of ivory demand, China must find the moral courage to end trade in illegal ivory. As I have said before, it behooves China to declare an indefinite moratorium on ivory imports and work with African Elephant Range States to intensify protection and conservation efforts. 

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