Weekly news

News round-up: 30 August 2013 to 06 September 2013

CAN comment: Increasingly its not state-owned but private Chinese companies which are investing in Africa. For the moment many of these companies are motivated by opening new markets above all else. However as one entrepreneur points out lower labour costs are also attractive meaning importing Chinese labour now makes little sense. “We have to pay Africa workers just 330 yuan a month, around a tenth of the 3,000 yuan we would have to pay a Chinese worker. The fact is that if we buy just one plane ticket for a Chinese worker to Africa and back, it would pay for about five local workers for the year.”

CAN comment: Great interview with China’s special representative on African affairs speaking about a wide range of China-Africa topics and providing fascinating answers. It’s very much worth a read and unusually candid for  Chinese official. One highlight for me on the myth of China Inc., “It is impossible to co-ordinate all these things, even if we wanted to. China is a developing country. The government in Beijing sometimes appears very capable, but in fact when we have tried to control foreign investment and trade we have found that it is impossible.”

CAN comment: This type of partnerships is becoming popular in Africa as western mining companies partner with Chinese customers for their product (e.g. an iron ore miner with a steel producer) to secure investment for fledgling projects in exchange for discounted off-take from the mine once operational, and often a stake in the mine. Western banks and funds have proved unwilling to invest in African mining in recent years, especially in an environment of falling commodity prices. Therefore these partnerships provide a neat solution for western firms seeking finance to get their projects off the ground.

CAN comment: This article is partly included for the amazing audacity of naming a coal mining and power generation firm China Africa Sunlight Energy. Comical name aside, this is a very large investment and while coal is not an ideal fuel for African countries to establish their power networks on (from a global perspective), like most of Africa Zimbabwe has a crippling deficit in electricity production and very low CO2 emissions per capita. Therefore it is difficult to argue that coal power electricity generation is not a sensible course for the country.

CAN comment: While the total sum of this donation from China to Kenya to fight poaching is small, it represents an important trend of Beijing directly addressing international criticism of its conduct. While China is unlikely to take responsibility for poaching issues in Kenya and East Africa more generally, this donation demonstrates that Chinese politicians and officials are at least sensitive to international complaints about its market for rare animal parts.

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