On the Chinese presence in Zambia

A recent paper of mine, "From formal- to informal-sector employment: examining the Chinese presence in Zambia," has been published in the Review of African Political Economy. The paper in full can be found here (PDF; subscription may be required), and the abstract noted here below:

This paper analyses China's recent engagement with Zambia, examining especially Chinese hiring practices, methods of business organisation and the labour conditions maintained by Chinese-operated construction and mining firms. Moving beyond existing analyses which remain focused solely on Chinese trade, aid and investment, this study begins to explore the micro-level of Chinese ventures, arguing that the continued employment of co-nationals as well as the generally substandard labour conditions maintained by Chinese firms lead to the offloading of Zambian workers into the country's burgeoning informal economy. There, newly emerged Chinese businesses stand to threaten local entrepreneurs who lack the resources necessary to parry Chinese competition. The result is a rapidly growing national unemployment rate and an increasing number of Zambians left struggling to sustain their livelihoods. This paper further argues that the characteristics defining China's engagement with Zambia are not particular to the Zambian context alone, but are rather abiding characteristics of overseas Chinese businesses in general. The paper ultimately calls for a policy framework regulating Chinese business activities in Zambia, lest the negative consequences of the Sino-Zambian partnership prevail.

Keywords: Chinese entrepreneurs; labour relations; Zambia; mining; informal economy; economic development

The comeback kid

It truly is embarrassing, this unintended hiatus I've taken from posting here. Over the past several months I on occasion vowed to myself to "get back to it next week," but - as is plainly evident - with little success. I do wish I could proffer an explanation for my absence, but I must confess that there isn't one worthy of mention. Whatever the case, I've returned with high hope and intention to be more diligent in my writings on this space; indeed, there is much about which to write.

The past few months have been spent refining and focusing on my PhD dissertation which, I'm quite pleased to say, is slowly beginning to take form. My research has shifted slightly from its previous focus on Chinese entrepreneurs in East Africa (though this still very much informs my work), to asking broader questions of the geo-strategic sort - in the context of Sino-Ethiopian relations in particular. In the course of my research I have admittedly grown rather frustrated with the emergent body of literature on China-Africa relations, consisting as it does of the same themes repeated over and over and over again. There's a song out these days by Iyaz, an allegedly up-and-coming young rapper, entitled "Replay;" part of the song's refrain goes: "It's like my iPod stuck on replay, replay-ay-ay-ay....". Most applicable to literature on Sino-African relations, unfortunately.

It's not the the literature is bad per se, but rather that in both asking the same questions and in treating China's forays into Africa an an international anomaly unseen in any other time or place we are, I think, asking the wrong questions. We need to take a step back, I believe, and look at the big picture: the Chinese aren't the only investors in Africa; what else is going on? How do all of these intersection points of agency stand to influence the continent? And influence in what way? Politically? Socially? Economically? What about China? How does Africa fit into China's grand strategy? What is that strategy? Who's strategy? And on the African side of things, too, where is the agency? What are the key strategic interests? How does China fit into Africa's strategy and the strategies of its constituent member states? By asking these (and indeed other) questions the phenomenon known as "China in Africa" is seemingly removed from the vacuum in which it has hitherto been resident and begins to take on new and exciting dimensions. Indeed, we all know that China seeks Africa's resources - and Africa in turn China's investment. There is, however, more to the story.

Relatedly (or perhaps not), together with a friend and colleague, I've published a paper as part of Afrobarometer's Working Paper Series. The paper focuses on African perceptions of the bourgeoning Chinese presence in the continent, further deciphering the factors informing the views held. The full paper may be found here. I will leave it to you to decide in which category of writing it should be placed.

While you were gone...

Dearest Readers: I apologize sincerely for the rather embarrassing lack of posting in recent days (or has it been weeks, already?). I have several writing projects on my plate at the moment (not to mention the mammoth beast that is the PhD), all of which have served to hamper my desire to blog when I manage to steal away some ever-fleeting moments of spare time. That said, I have not abandoned you and will continue to post in this space when I can (hopefully more frequently going forward!).

Now, let's get back to business, shall we? It seems that among the golden rules governing the IR world is the ever-wise maxim, "don't blink or you'll miss it." Much has happened in the way of Sino-African relations since I last wrote. To that end, I've collected a not-so-brief list of stories which have surfaced during my absence, and which I deem especially worthy of note:

• The FT last week ran a special report on Kenya. Whilst many "special reports" of such a nature have previously been written, I found this one especially well crafted and comprehensive, covering issues ranging from the country's leadership crisis to its extreme (and extremely fickle) climate
• Always sharp, always informative, Elizabeth Dickinson asks whether China's Guinea deal is for real. Emerging evidence suggests that the deal may actually amount to nothing more than wishful thinking on the part of the Guineans, though given the shroud of secrecy under which the Chinese (and by and large Guineans) operate, the actual reality of the matter is anyone's best guess. I find it perfectly typical, though: Guinea is embroiled in turmoil and gross human rights violations; the international community is ready to impose sanctions; and China is soldering on with its oil and investment deals. Where have we seen this before?
• Unsurprisingly, an increasing body of experts are calling for heightened transparency in China's Africa investments. I wouldn't be surprised if Beijing will over time begin declassifying a select pool of documents surrounding its African activities - not because it will have suddenly decided to operate within the international regulatory framework, but for the very reason that by appeasing Western demands in this regard it will be able to continue doing as it pleases. Give a little, take a lot seems to be the name of the game.
• In the name of fairness, however, if one is to be critical of the Chinese for their African oil investments, one should seemingly be equally condemnatory of the Bush family....
• A sad twist of irony in our technologically advanced world: phones appear to be more widespread than food. Might we - in our constant pursuit of all things bigger, better and faster - be losing sight of the basic needs of the world's poor? Food for thought (no pun intended)
• An interesting glance into the DRC's 2009 budget (HT: Texas in Africa). As Texas in Africa aptly notes, the best thing about the budget is how easy it is to see where the money is being stolen. The whole thing reads quite like a satirical novella. Well, almost.
• The 2009 Forum on China Africa Cooperation is due to take place in Egypt on 8-9 November. I look forward to reading the newly revised China Africa strategy which, I'm quite certain, will read exactly like the old one
• A most harrowing account of human rights violations in North Korea from The Economist. While North Korea is generally discussed solely in terms of its nuclear ambitions and contentious behavior on the international stage, one often forgets of the country's population, which is suffering under the most atrocious and deplorable conditions
• On the near-eve of the 20th anniversary of the fall of the Berlin Wall, Brahma Chellaney puts 1989 in global comparative perspective: Europe got freedom, Asia got rich. And, twenty years later, China's authoritarian capitalism stands to challenge the global spread of democratic values. How much happens in such a short period of history.

Noteworthy...

• CNOOC wants a stake in Ghana's oil field. So does Exxon Mobil. A showdown in the making...
• Anti-Chinese sentiment appears to be escalating in the DRC. The Chinese firm Sinohydro suffered an attack earlier this month by unidentified gunmen. This is unfortunately one among a growing number of such instances in the DRC
• "Conservative Egyptian lawmakers have called for a ban on imports of a Chinese-made kit meant to help women fake their virginity and one scholar has even called for the 'exile' of anyone who imports of uses it." And here you thought China was engaged in resource extraction alone...
• Yet another reason why I'm skeptical that China will ever do anything about North Korea. *Sigh*
• Last week the Mo Ibrahim Foundation released its annual index of governance in Africa. You can find the rankings here, and several of Elizabeth Dickinson's reflections here
• China is in a push for Guinea's resources - minerals and [the hope of] oil. Guinea is one of the poorest states in West Africa, with a seriously dubious human rights and governance record.
• The Gates Foundation is exploring securitizing aid. Securitization seems to be a dirty word these days, but Gates may be onto something...

China becomes South Africa's top export destination

From Friday's Reuters:

China overtook the United States as South Africa's biggest export destination in the first half of 2009, reinforcing the Asian country's push to build trade links with Africa.

South African trade and industry department data also showed on Friday China replaced Germany as its largest country trade partner.

[...] Data for South Africa -- Africa's biggest economy -- showed exports to China stood at 27.6 billion rand for the year to June, against 35.8 billion rand for the whole of 2008. Exports to the U.S. were 19.1 billion rand compared with 66.5 billion rand for 2008.

China goes after Nigeria's oil

Via Tom Burgis writing in the FT:

A Chinese state-owned oil company is in talks with Nigeria to buy large stakes in some of the world’s richest oil blocs in a deal that would eclipse Beijing’s previous efforts to secure crude overseas.

The attempt could pitch the Chinese into competition with western oil groups, including Shell, Chevron, Total and ExxonMobil, which partly or wholly control and operate the 23 blocks under discussion. Sixteen licences are up for renewal.

Most prominently, CNOOC is hoping to buy 6 billion barrels of oil, equivalent to one in every six barrels of proven reserves in Nigeria. While the overall value of the offer has not been disclosed, some sources suggest that it caps somewhere around the $50 billion mark. Another issue yet to be disclosed is that of how the Nigerian government plans to allocate equity in the oil blocks; some suspect that it may involve forcing western groups to relinquish their stakes. Bring on the fireworks.

On China's burgeoning relationship with Francophone Africa and oil-for-infrastructure contracts

The July issue of The China Monitor - a publication of the Centre for Chinese Studies at the University of Stellenbosch - is focused exclusively on the relationship between China and Francophone Africa. I find the focus most interesting, as it seems to suggest that the colonial history of African nations in some way affects the nature of China's engagement with them. Is China's engagement with Francophone Africa different, then, from its engagement with English Africa? Or Portuguese Africa? I admittedly hadn't given such a possibility much previous thought, but it is a hypothesis worth exploring.

Page 7 of this issue also features a piece by a colleague of mine, Dunia P. Zongwe, in which he interestingly writes on China's ore-for-infrastructure contracts, and the economic complementarities between China and Africa. The crux of Dunia's argument suggests that:

[...] the terms of economic exchanges in the mining sector between China and resource-rich African countries should assume, whenever possible, a R4I [resource for infrastructure] form.

In their essence, R4I contracts mirror contrat d'echange (exchange contracts), which do not involve any direct transfer of money to host governments, thereby reducing the risk that governments will mishandle investments. According to Dunia, such contracts carry further positive distributive outcomes, as African countries are able to retain and spread more widely the benefits of FDI than under traditional investment contracts. Such positive externalities are visible in Angola, which was recently lauded for its effectiveness in managing Chinese investment.

The Angolan case indeed seems to suggest that R4I contracts may be a valuable tool by which to optimize China's FDI in Africa if managed accordingly. The case further does well to bring African governance back into the equation; ultimately it is up to African governments to devise appropriate investment policies which optimize Chinese FDI and assist in developing the state and economy. The Chinese are making their moves, and African leaders must make theirs.

Noteworthy...

Dear Readers: I will be on the road much of this week, so I'm afraid my blogging will be limited to... well, to be perfectly honest, I doubt I will be blogging at all! I'll be back next week with more news, analysis, and quips about this crazy field of international relations. Until then, today's Noteworthy reads:

Taking Africa beyond Aid. Yet another review of Moyo's book, Dead Aid, and a loud call for the development of African financial markets. As interesting as the piece itself are the comments, which inevitably turn to discussion of the Chinese presence on the continent

How can struggling countries break out of poverty if they're trapped in systems of bad rules? Paul Romer suggests "charter cities" as a possible solution

Something stinks. Must be Scotland's deal with Libya...

Osei Kofi on Africa's lagging contemporary art scene (and what to do about it)

Hugo Restall has an interesting piece in today's WSJ on the threesome that is Latin America (any country will do, really), the U.S. and China. While I tend to disagree with much of his analysis, it is an interesting argument nevertheless

For those among you who believed that China's alleged withdrawal from the deal with the Congo signaled China's retreat from the continent.... I hate to say 'I told you so,' but I told you so: China was never intending to withdraw, it was merely revising its strategy

Have a great week everyone!

Where 21st century Asian socialism meets 21st century Latin American socialism

Don't blink, otherwise you might miss the litany of deals China has been making across Latin America! China has recently signed oil deals with Argentina, Ecuador, and Venezuela; and has contracts and cooperation deals with governments in Brazil, Peru, Chile, Colombia, Uruguay - effectively the entire Latin American continent.

In the early stages of Sino-Latin American cooperation, China seemed to be treading rather carefully, hesitant of both its foreign policy and place on the international global stage. The recent increase in overseas activity - from Africa to Latin America, and beyond - however, suggests that Chinese confidence is rapidly growing. The global financial crisis in particular has raised skepticism over America's hitherto seemingly unwavering preeminence, and has at the same time proffered China as a viable alternative. Indeed, an increasing number of countries are now saying "thanks, but no thanks" to U.S. cooperation and assistance, choosing instead to place their faith in the Chinese. Latin America is case in point.

The strategy the Chinese are employing across the continent appears identical to that which is being pursued in Africa, with oil-for-infrastructure contracts as the primary modus operandi. Like in Africa, too, Chinese investment is manifest on many economic levels - from high level government contracts all the way down to small-scale private entrepreneurs who sell vegetables and various knick-knacks on the side of the road. What's more interesting in the case of Latin America, however, is that the partnerships appear to be much more ideologically laden than those in Africa. This is especially true in Venezuela.

In a a great video from Al Jazeera English (HT: Double Handshake), Venezuelan economics professor Jesus Farias briefly touches on the issue of the Venezuelan socialist model and its seemingly logical intersection with its Chinese counterpart (this, around 2:34). He seems to be suggesting that cooperation between China and Venezuela is predicated not only on economic exchange, but has as its broader objective the restructuring of the global political landscape. I'm not wholly certain that this is necessarily the case - or that such is the objective of other Latin American countries engaged in relations with China - but it certainly is an interesting point worthy of further consideration. Viva la revolution...?

Noteworthy...

My goodness, where to begin? ....

Harvard (yes, that Harvard) is branching out beyond the world of academia to establish its own 'preppy' fashion line. I suppose it's quite safe to say that the university's economic woes must truly be taking a toll...

Adam Hothchild's "Rape of the Congo" from this edition of the NYRB. Quite apropos given Secretary Clinton's current visit there

Iran and China have just signed a $3 billion oil deal, wherein which China is to help develop Iran's refinery capacity in Abadan and the Gulf. Nearly one-fourth of Iran's petroleum exports already go to China

Buying mines in Africa and the question of China's soft power. Alternatively titled: Chinese adventures in the African resource market, as told by Sheishi (whoever she may be)

Slightly tardy (on my end), though nevertheless most worthwhile: via Aid Watch a review of Michaela Wrong's book, It's Our Turn to Eat: The Story of a Kenyan Whistle-Blower

Over-exaggerated Asian scrambles and praise-worthy Angolan management on a Monday morning

Chatham House released a new report today which provides a comparative study of the impact of Asian oil companies on Nigeria and Angola - the two leading oil-producing companies in sub-Saharan Africa. While the report considers Indian, South Korean and Japanese national oil companies, the primary focus is on Chinese oil strategy. Specifically, the report considers why Chinese oil strategy has been - and remains - so successful; how it is that Angola emerged as the second largest supplier of oil to China in 2008; how Chinese companies negotiate deals; and how such deals benefit Angola and Nigeria, respectively.

Among the more interesting findings emanating from the report is that which suggests that Angola does not fit the stereotype of a weak African state being exploited by the resource-hungry Chinese. Indeed, the Angolan government has been quite successful in managing its relationships with China and its oil companies, as well as handling its own version of the oil-for infrastructure scheme. The case of Angola is contrasted with Nigeria, where the Obasanjo government largely failed to manage the scheme:

While Nigeria was playing politics with its Asian partners, Angola was driven by economic necessity to quickly access funds to finance its reconstruction [...]

[...] The scale of corruption, mismanagement and non-execution of projects in the Obasanjo years has sent shockwaves through Nigeria. [...] His intentions were good but officials failed to spell out the full implications of the scheme. And many used the scheme for private profit.

The report further suggests that Western fears about an Asian takeover in the Nigerian and Angolan oil sectors are highly exaggerated:

Except for Japan, [Asian oil companies] only acquired equity participation in both countries in the last five years. More important, the [western] oil majors remain the leading players in both countries. They dominate production and hold the majority of reserves.

While Western oil companies do, indeed, still own much of Africa's oil reserves, the Chinese scramble for African soil should not be downplayed. As the report itself notes, Angola is now the second largest supplier of oil to China, with Nigeria, the Congo, Kenya, and other oil-producing states not too far behind. In 2005, China imported nearly 701,000 bpd of oil from Africa - approximately 30% of its total oil imports. This figure has been rising in recent years, and is estimated to reach some 40-50% in the next decade.

The full report - Thirst for African Oil: National Oil Companies in Nigeria and Angola - may be found here.

Decoupling? No, a new coupling

Over the weekend The NYTimes had a rather cliched though nevertheless worthwhile article on declining foreign investments in Africa. This, as a consequence of the global financial crisis:

When the credit crisis erupted in September, many experts thought that Africa would be spared the financial turmoil of the American and European financial systems, because African banks had almost none of their assets tied up in the global subprime market.

But it has recently become clear that Africa is being hit hard. The World Bank estimates that its economies will grow an average of 3 percent this year, compared with an annual average of 6 percent from 2004 to 2008.

“The crisis could not have come at a worse time,” said Jose Gijon, chief Africa economist at the Organization of Economic Cooperation and Development, based in Paris. “Before the meltdown, many African countries had made significant progress in attracting foreign investment and private capital, and this could derail those efforts.”

But one must not forget about the Chinese, who show no intention of curtailing their African investments. Quite the contrary, really:

China which has become a major investor and trading partner for Africa, continues to invest. The China-Africa Development Fund, which has invested nearly $400 million in projects in Africa, said it planned to raise an additional $2 billion by November. African groups are also continuing to pump money into projects ranging from telecommunications to new oil fields.

Indeed, many in Africa believe that it is China - and China alone - that will spur and sustain the continent's growth. In the words of Martyn Davies, the relationship between China and the African continent is not decoupling - as is the case now between many emerging economies and America, for instance - but rather a "New Coupling." Africa is still open for business, and the Chinese are the continent's main customers.

Chinese agricultural techniques and African development: a hope for better things to come

China has been having a bit of a rough go here on China in Africa this week. First it's found to be de-industrializing other developing nations, then peddling fake drugs in Africa, its media outlets producing questionable maps, and today victimizing African labourers. Not at all a very rosy picture! There is good news, however: a report commissioned by the African Agricultural Technology Foundation (AATF) and prepared by my colleagues at the Centre for Chinese Studies at the University of Stellenbosch, finds that the very technologies employed in China's agricultural boom might be appropriate - and indeed highly beneficial - in the African context.

The report - "The Relevance of Chinese Agricultural Technologies for African Smallholder Farmers: Agricultural Technology Research in China" - finds that of particular benefit are water-saving technologies and soil-related techniques such as tilage and planting methods. Evidently, small-scale African farmers face similar challenges as do their Chinese counterparts, and there is much in the way of technology and knowledge exchange that might benefit the former. According to the report, Chinese experts are especially focused on seed and rice technologies, particularly in Benin, Cameroon, Congo, Ethiopia, Liberia, Mozambique, Rwanda, South Africa, Sudan, Tanzania, Togo, Uganda, Zambia and Zimbabwe. Rapid advances in seed technology and new plant varieties have been a major factor in China's crop production increases, and it is believed that similar advancements may facilitate an agricultural boom across Africa.

In Mozambique, a 52 hectare agricultural demonstration centre is planned west of Maputo, at Boane. According to the report, crops will be planted this year to test whether the Mozambican climate is suited for various varieties of seeds, including maize, rice, vegetables and fruit. In Kampala, Uganda, Chinese contractors are building an aquaculture demonstration centre. The centre is envisaged to generate knowledge for fish farmers, fishers and researchers in the country.

The agricultural sector employs approximately 65% of Africa's population, and is the largest private sector on the continent. Poor agricultural planning, weak land tenure policies, and a low capacity to adapt to changing circumstances and markets have, however, generally hindered the sector from becoming a productive, profitable business. While the Chinese are incapable of ameliorating all these troubles, they may do well to provide the relevant technologies to farmers and place Africa's agricultural sector back on track to success. Fingers crossed.

"Among the worst employers everywhere"

Via Global Dispatch's Erin Conway-Smith I'm reminded of a report I've been meaning to link to for some time, but have continuously forgotten to do so - apologies! In May, the African Labour Research Network released a great 400+ page report on the labour conditions maintained by Chinese-operated firms in Africa. The report - "Chinese Investments in Africa: A Labour Perspective" - focuses especially on the cases of Angola, Botswana, Ghana, Malawi, Namibia, Nigeria, South Africa, Zambia and Zimbabwe, among the nations where the Chinese presence is most pronounced, and with which trade is particularly high.

Unfortunately for the Chinese, the findings are not at all favorable towards them. Quite generally, the report finds:

Chinese employers tend to be amongst the lowest paying in Africa when compared with other companies in the same sector. In Zambia, for example, the Chinese copper mine paid its workers 30% less than other copper mines in the country. In general, Chinese companies do not grant African workers any meaningful benefits and in some instances ignore even those that are prescribed by law. Wages above the national average were only found at those Chinese companies with a strong trade union presence. Chinese staff members enjoy significantly higher wages and more benefits than their African counterparts.

Collective bargaining hardly takes place in Chinese companies. They resort to union bashing strategies to discourage their workers from joining a trade union. In many instances, Chinese businesses were supported by host governments who defended Chinese investments against the demands of labour. Trade unions see the practices of Chinese companies as a threat to the limited social protection that unions have achieved over the years through collective bargaining.

In Namibia, for instance, some workers are paid $0.55 an hour by a Chinese company that is building the new Works and Transport Ministry headquarters - about half the legal minimum wage of $1.10 per hour for entry-level construction workers. In many cases workers don't wear safety helmets, as they are often required to pay for their own safety equipment - an investment they can ill afford. At a construction company in Malawi, too, workers had to mix cement with their bare hands. Many labour for 12 hours a day, 7 days a week. The general work day in much of Africa is 8 hours.

Of course it's difficult to expect high standards of working conditions in Chinese firms in Africa when Chinese firms in China don't fare any better. As I noted nearly a year ago, it's quite difficult to expect Chinese employers to improve labour conditions for foreign nationals working in their firms, when they have yet to do so for their own compatriots. For African states, the solution lies in legally regulating working conditions. But as the South African case demonstrates, where in place even such edicts are being circumvented. Thus while Africa stands to benefit from increased Chinese investment as such, it similarly stands to lose if such conditions continue. Change must occur, the lingering question is how.

Fake drugs in Africa? Don't blame the Indians - at least not entirely

Chinese-made drugs which are dangerous or otherwise fake are evidently being sold in parts of Africa with "made in India" labels, much to the detriment of the Indian pharmaceutical industry's inroads into West Africa. This problem appears to be especially pronounced in Nigeria, where Indian generic drugs are the preferred choice of importers:

Chinese, and now Indian, companies have been accused of selling fake drugs in Nigeria's $298-million pharmaceutical market, nearly 60 per cent of which comprises imports.

Although, the $298 figure looks small, it is attractive to fake drug manufacturers. According to a survey conducted in Nigeria in 2007, fake drugs make up for over 50 per cent of all drug sales in th country. The Pharmaceutical Society of Nigeria, puts the figure of fake drugs circulating in the country at nearly 70 per cent.

[HT: Appfrica]

What's wrong with this picture?

Via Joshua Keating we learn that China's Economic Observer has put together the following map of overseas expansions by CNOOC, CNPC and Sinopec - China's three major oil giants. Click here to access the interactive version, which provides (only some) added information:

Now I don't know about you, but I find this map to be highly inaccurate, and not just because the African countries have been mislabeled. The map grossly under-represents China's oil ventures in Africa; it's quite laughable, really! As Keating aptly observes, Sudan, where CNPC has extensive and very controversial holdings is absent. So is Niger, Gabon, Ethiopia (Sinopec is especially active in both); my goodness, where is Angola? Or Chad, for that matter? Kenya, Equatorial Guinea, and Algeria are all conspicuously absent as well. I really could go on. And while I'm not especially well-versed in China's energy holdings and exploration activities in Latin America, I'd venture to guess that the map greatly underestimates its ventures there, as well.

To be perfectly honest I feel as though I must be missing something; as though the map is intended to highlight specific cases of China's overseas oil activities, for instance, or perhaps is otherwise well outdated. Unfortunately, neither appears to be the case. There's no indication of any singling out of countries, and the sentence which begins "With China's recent $7.2 billion acquisition of oil explorer Addax Petroleum...." indicates that this map is very recent (Sinopec bought Addax in June of this year). So why in the world would the Observer put together such a misguided map? Is the Chinese public so unaware of its country's overseas activities, or do they think we are?

China-Africa Development Fund expands its African ties

From today's WSJ:

The China-Africa Development Fund, which was founded by state-owned lender China Development Bank Corp., plans to raise $2 billion by November to help expand business links between Africa and China, CDB Vice Governor Li Jiping said.

[...] In an interview on the sidelines of the Australia-China Bilateral Investment Seminar, Mr. Li said the China-Africa Development Fund will raise the money for expansion from Chinese financial institutions, including insurers.

The fund, established in 2007 with an initial $1 billion investment by CDB, had said it aims to eventually increase its total assets for investment to $5 billion. Australia is also a part of CDB's global strategy, Mr. Li said.

Extra! Extra! Read all about it!

The Onion has been bought out by a Chinese conglomerate and has a slew of spot-on and hilarious spoofs. Likely for a limited time only, so don't miss out.

Don't cry for me Latin America. Yet.

While this blog is mostly devoted to issues surrounding the Sino-African partnership, one must not forget that China is similarly active in other regions of the world, most recently Latin America. China's strategies in Latin America seem to differ little from those employed in Africa, with 'oil-for-infrastructure' deals, tech investments, extensive bilateral trade agreements, and the influx of cheap Chinese goods as the wooing tactics of choice. Trade between China and Latin America soared from $10 billion in 2000 to $140 billion in 2008.

As is true of Africa, Beijing's main interest in Latin America is the guaranteeing of access to the region's raw materials - oil, soybeans, copper, iron ore, etc. - to fuel its continued rapid growth. Yet as is also true in Africa, China's ambitions are also grandly geopolitical. According to Tyler Bridges:

China is beefing up its embassies throughout Latin America, opening Confucian centers to expand Chinese culture, sending high-level trade delegations throughout the region and opening the door for ordinary Chinese to visit Machu Picchu, Rio, and other tourism hot spots.

Aiping Yuan came to Rio de Janeiro from Beijing in 1997 on a lark, fell in love with the city, and decided to stay. She studied Portuguese, and when Brazilian President Luiz Inácio Lula da Silva made his first visit to China in 2004, she opened a small school in Rio to teach Mandarin.

She began with six students and today has 300, including senior executives at Petrobras, the country's biggest oil company, and Vale do Rio Doce, the biggest mineral producer. Both have growing business with China.

"Chinese is the language of the future for Brazil," Yuan said with a big smile.

Chinese will be the language of more than just Brazil if Beijing's leaders have anything to do with it. As Bridges aptly observes, China is buying zinc from Peru, copper from Chile, and iron ore from Brazil. It's shipping equipment to Brazil, buses to Cuba, clothes to Mexico and cars to Peru. Chinese tech giants Huawei and ZTE are likewise grabbing business from established telecom suppliers across the continent, most prominently in Argentina, Chile and Colombia. Yet while China seemingly has a Latin America strategy (or perhaps a 'developing world' strategy more generally; it's hard to tell), Latin America doesn't appear to have a China strategy.

Writing in his excellent blog, Tom Pellman cites David Shambaugh who notes:

Latin America is acting toward China's expansion in the world in a reactive, disorganized or ad hoc fashion. When I asked Itamaraty (Brazil's foreign ministry) about its strategy on China, I got blank stares. There is no strategy.

Such a lack of strategy indubitably works to the detriment of Latin American states - as it does African nations which similarly lack much in the way of a policy of engagement with the eager Chinese - who stand to gain from Chinese investment. In Latin America, as much as in Africa, there are many benefits to be accrued from recent Chinese interest. Yet without a plan of action, it seems that China will walk away as the sole beneficiary when all is said and done.

On China as Africa's biggest arms dealer

I'm currently working on a paper examining Sino-Zambian relations, focusing especially on Chinese activity in Zambia's mining sector. I've been sitting on this project for quite some time, and finally managed to overcome what had been a most serious case of writer's block with the help of a lovely glass of Bandol (Tempier). Ok, fine, two glasses. In any event, while doing a bit of extra desk research, I happened upon an interesting piece in the recent edition of the Jamestown Foundation's China Brief. Author Richard Bitzinger writes:

China is now, on average, the world’s fifth largest arms exporter, after the traditional leading suppliers: the United States, Russia, France, and the United Kingdom. In fact, in 2007 it was fourth in terms of global arms transfer agreements, ahead of France, Germany and Spain.

Nearly all of China’s arms transfers are to developing countries, and in this arena the Chinese defense industry is emerging as a formidable competitor. In fact, China ranked third in terms of arms deliveries to the developing world in 2007. China's largest markets are in Asia, the Middle East, and particularly Africa. In fact, during the period 2004-2007, China was the single largest seller of arms to Africa; and its major customers include Pakistan, Egypt, Bangladesh, Iran, Zimbabwe, and Zambia.

Leading Chinese weapons exports (to Africa) include:

• The K-8 trainer jet: China has exported nearly 250 of these lightweight trainer/attack jets since 2000, according to the Stockholm International Peace Research Institute (SIPRI) database on arms transfers. Its biggest client has been Egypt, which bought 120 K-8s, most of which were assembled locally from kits, between 2001 and 2008. Other customers include Ghana, Pakistan, Sri Lanka, Sudan, Zambia, and Zimbabwe, while Venezuela is in negotiations to purchase up to 24 K-8s.
• The F-7MG fighter jet: This aircraft is the export version of the People's Liberation Army (PLA) Air Force’s F-7E, itself an upgraded adaptation of the MiG-21. The F-7MG features a larger wing and, reportedly, a British radar. China has sold more than a hundred of these fighters to Bangladesh, Namibia, Nigeria, Pakistan, and Sri Lanka, according the SIPRI Arms Transfers database, since the mid-1990s.
• The WZ-551 armored personnel carrier: Although not a particularly high-tech system, the WZ-551 is notable for being sold widely around the world, including countries like Argentina, Gabon, Kenya, Kuwait, Nepal, Oman, Sri Lanka, Sudan, and Tanzania

It remains difficult to gauge how successful China will be in the global arms marketplace, with countries like the U.S. and Russia out-exporting the country by rather wide margins (in 2007, for example, Russia exported $4.6 billion worth of arms - four times as much as China. Even Germany out-exported China by 60%). Yet China's foothold in the African marketplace appears to be quite favorable. In Zambia, for instance, China's North Industries Corp. (NORINCO) is allegedly in talks to upgrade Zambia's T-59 tanks engines, armor and fire control systems. The Nigerian air force has been eyeing China's K-8 trainer aircraft (Nigeria imported Chinese J-7 fighters in 2006). Zimbabwe is equipped with Chinese K-8 trainers and J-7 fighters, and in early 2009 was negotiating the purchase of one squadron of FC-1 fighters from. Chinese arms now equip Angola, South Africa, Sudan, Algeria, Egypt, Kenya... the list goes on and on.

Chinese arms deals appear to be part and parcel of the "oil-for-infrastructure" deals China continues to strike across the continent. In Angola, for instance, arms are sold in exchange for the country's oil. In Zambia, copper is the currency of choice. While some argue that Chinese arms sales to Africa will drop once China acquires a satisfactory supply of natural resources, such claims are highly dubious. What constitutes a "satisfactory supply" for a country with massive energy demands? What's more, it's rather doubtful that China will be so foolish as to bypass a booming export market. If nothing else, the Chinese are exceptionally savvy businessmen, and arms sales to Africa is a brilliant business opportunity. While China may not be supplanting or joining the U.S. and European states as a large supplier of sophisticated arms on a global scale anytime soon, they have seemingly already done so - and continue to do so - in Africa.