Weekly news

News round-up: 22 June 2013 to 28 June 2013

CAN comment: The big story last week was certainly President Obama’s visit to Africa, and unsurprisingly much of the coverage focused on competition with China. As this article rightly points out, Obama came to Africa with a legion of US businessmen, and while his rhetoric was on good governance there was also an unmistakable commercial lilt to his messaging. I for one feel there is little reason for competition between China and the USA in Africa, as the two powers want and provide different things. Energy has traditionally been the US’s main strategic interest in Africa, but unconventional oil and gas reserves at home have made Africa’s reserves much less important. However at times the western media seem unable to escape the rhetoric of the Cold War.

CAN comment:  Very significant move by China to send combat troops to Mali. The non-interference policy has proved more and more difficult to justify in recent years as China’s strategic interests have widened. While China provides more troops to peacekeeping missions than any of the other security council members, and combat troops had been deployed previously to protect engineers and medical forces, as this article points out the public announcement  is significant.

CAN comment: The Chinese government has come down very firmly on the side of the Ghanaian government in the on-running issues with Chinese illegal miners in the West African country. Chinese Ambassador to Ghana Gong Jianzhong said “Chinese in Ghana should always abide by the laws of the country, operate their businesses within the boundary of the law and stop illegal mining activities.”

CAN comment: Counterfeit drugs pose a terrible danger to the health of their consumers, but they also cause serious reputational damage to China. Like illegal mining, the existence of dangerous counterfeit medicines exported from China to Africa has been known about for some time. One hopes that it will not take a ‘tainted-milk’ type disaster in order for China to take the issue seriously, because Beijing should recognize that the cost of regulating the industry is less than the potential damage to its reputation.

CAN comment: The drawback of the negative perceptions created by substandard and counterfeit drugs (or electronics) is that legitimate Chinese industries are tainted by association. Foton are seeking to assemble their cars in Uganda for the African market, creating employment and offering a significantly lower cost than imported alternatives. However poor perceptions of Chinese products mean consumers will have to be won over. If Beijing feels that the success of its industries in Africa is at risk as a result of poor reputation created by petty traders it may make more effort to clamp down on the poor practice that concerns Africans.

CAN comment: Angola and Mozambique are strategically important for China due to their large reserves of oil, gas and coal. In order to spur investment the Chinese government has set up  fund with with the China Development Bank and the Macau Industrial Development and Commercialisation Fund (FDIC). This is primarily a commercial venture with the stated aim to encourage bilateral investment between Chinese and Lusophone countries. One suspects that the vast majority of the investment flowing from this fund may be used by Chinese resource firms looking to invest in the two countries mentioned above.

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