Weekly news

News round-up: 07 September 2013 to 13 September 2013

CAN comment: This article quotes journalists who previously worked for Chinese state owned CCTV news in Africa who claim that they were encouraged to: report positively on China; to ignore countries such as Swaziland that have diplomatic relations with Taiwan;  to ignore Chinese demand for ivory could not be mentioned in stories about Africa’s poaching crisis; and to avoid human-rights questions in an interview with an authoritarian African leader. While this may be predictable, if this is true African governments need to be very careful about how much of their domestic media falls into the pay of China.

CAN comment: Western companies have often complained that Chinese firms in Africa do not compete on a level playing field due to corrupt practices and support from the Chinese state. Bilateral trade and investment has steadily risen between China and Nigeria in recent years but not without controversy. Chinese telecoms provider ZTE comes under particular criticism in this article for its failure to adequately deliver adequately on a contract (apparently including surveillance equipment) for the police force, the investment for which was provided by Chinese state loans. Chinese firms standard do seem to be on an upward trajectory in Africa overall, but occurrences such as this one will see China struggle to shake off an association with poor quality goods, both in Africa and abroad.

CAN comment: ZTE has aslo faced government criticism in Zambia under almost identical circumstances. Again the controversy regards a contract for the installation of a surveillance system for a government department, this time the home office. In this case the Zambian government have cancelled the contract with ZTE after suspicion of corruption. The contract was never put out to tender and critics have alleged that costs were vastly inflated.

CAN comment: Chinese state owned resource firms continue to make high profile investments into western run projects in Africa. Sinopec’s decision to invest in US based Apache energy’s Egyptian assets may also have interesting implications for China’s role in international dialogue on Egypt. While Apache’s operations lie in “remote, unpopulated areas that are unaffected by political events in the region”, China has proved far more active politically in countries in which it has significant resource interests.

CAN comment: Adding to last week’s comments on the increasing trend of partnerships between western miners and their Chinese customers in Africa, this story shows the difficulties of developing mining projects in Africa, even with Chinese financing. African Minerals secured investment from it’s partner Shandong Iron and Steel (SISG) on the condition that it met tough production targets. Missing its target has resulted in a charge for African Minerals, and despite a sympathetic approach from SISG, African Minerals’ share price has fallen.

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