More than minerals – Here comes China


A GROUP of five tourists from Beijing passes low over Mount Kenya and into the Rift Valley in their private plane before landing on a dusty airstrip surrounded by the yellow trunks and mist-like branches of fever trees. They walk across a grassy opening where zebras and giraffes roam, snapping pictures while keeping an eye out for charging buffaloes. When they sit down at a table, they seem hungry but at ease. “Last year I went to the South Pole with some friends,” says one of two housewives, showing off iPhone pictures of a gaggle of penguins on permafrost.

Chinese are coming to Africa in ever greater numbers and finding it a comfortable place to visit, work in and trade. An estimated 1m are now resident in Africa, up from a few thousand a decade ago, and more keep arriving. Chinese are the fourth-most-numerous visitors to South Africa. Among them will be China’s new president, Xi Jinping, who is also going to Tanzania and the Democratic Republic of Congo on his first foreign outing as leader.

The origin of China’s fascination with Africa is easy to see. Between the Sahara and the Kalahari deserts lie many of the raw materials desired by its industries. China recently overtook America as the world’s largest net importer of oil. Almost 80% of Chinese imports from Africa are mineral products. China is Africa’s top business partner, with trade exceeding $166 billion. But it is not all minerals. Exports to Africa are a mixed bag (see chart). Machinery makes up 29%.

The size of China’s direct investment in Africa is harder to measure than trade. Last summer China’s commerce minister, Chen Deming, said the number “exceeded $14.7 billion, up 60% from 2009”. Around the same time the Chinese ambassador to South Africa, Tian Xuejun, said: “China’s investment in Africa of various kinds exceeds $40 billion.” Apparently, the first figure is for African investments reported to the government. The second includes estimates of Chinese funds flowing in from tax shelters around the world.

Sino-African links have broadened in the past few years. The relationship is now almost as diverse as Africa itself. But Mr Xi will search in vain for the e-mail address of a single African leader who can speak for the rest, rather as Henry Kissinger legendarily struggled to find a single phone number for Europe.

Until recently China concentrated on a few big resource-rich countries, including Algeria, Nigeria, South Africa, Sudan and Zambia. But places like Ethiopia and Congo, where minerals are scarce or hard to extract, are now getting more attention, not least as more Chinese businesses branch out into non-resource sectors. State-owned companies compete with private firms—both tempted by margins often far higher than at home. Young Chinese private-equity funds are also coming to Africa.

Africans are far from being steamrollered. Their governments have shown a surprising assertiveness. The first person to be expelled from Africa’s youngest country, South Sudan, was a Chinese: Liu Yingcai, the local head of Petrodar, a Chinese-Malaysian oil company and the government’s biggest customer, in connection with an alleged $815m oil “theft”. Congo kicked out two rogue commodities traders in the Kivu region. Algerian courts have banned two Chinese firms from participating in a public tender, alleging corruption. Gabonese officials ditched an unfavourable resource deal. Kenyan and South African conservationists are asking China to stop the trade in ivory and rhino horn.

African elites see China as their biggest partner among emerging countries, but by no means the only one. Brazil, Russia and India (also in the BRICS club), as well as Turkey, South Korea and several others are following China’s path. Indian companies rack up deals worth about a third of Sino-African trade, and some estimates see that proportion rising to 50%. It is no accident that on March 26th and 27th BRICS leaders are meeting in South Africa—they are all competitors there.

China’s image in Africa, once marred by suspicion, is changing. Businessmen facing Chinese competition, especially in farming, retail and petty trading, still complain. In Malawi, Tanzania, Uganda and Zambia, new rules restrict the industries or areas in which Chinese can operate. Yet a growing number of Africans say the Chinese create jobs, transfer skills and spend money in local economies. In small countries, where the Asian behemoth was most feared, the change is especially noticeable. Michael Sata, president of Zambia and a long-standing China critic when in opposition until 2011, changed his tune once in office. Last year he demoted his labour minister, who had lambasted Chinese and Indian business interests. He also sent his vice-president to Beijing to discuss links between his Patriotic Front and the Chinese Communist Party.

African democracy has so far not been damaged. China turns a blind eye to human-rights abuses, but it has not undermined democratic institutions or conventions. In Zimbabwe, it continues to work with President Robert Mugabe, but it has also developed relations with the opposition Movement for Democratic Change, inviting its leader, Morgan Tsvangirai, to Beijing. Chinese leaders accommodated the democratic change of power in Senegal last year, including the loss of power of President Abdoulaye Wade, who had switched Senegal’s diplomatic recognition from Taiwan to China in 2005.

Other popular fears triggered by China’s growing presence have also proved hollow. It has not stoked armed conflict. On the contrary, China has occasionally played peacemaker, although motivated by self-interest. Sudan and South Sudan are both big Chinese trade partners. When they hovered on the brink of war last year, China intervened diplomatically along with other powers.

Only in Africa’s largest economies has China become less popular. There it is increasingly seen as a competitor. Jacob Zuma, South Africa’s president, who long cultivated Chinese contacts, was last year forced by domestic critics to change posture. In Nigeria the central-bank governor recently excoriated the Chinese for exuding “a whiff of colonialism”. Other Africans guffawed—in the past it was often the Nigerians and the South Africans who muscled into their markets.