Monday, November 06, 2006

The Big Deal in Africa


In “Chinese-African Summit Yields $1.9 Billion in Deals,” China is seen moving to formalize its role as Africa’s number-one trading partner and expand its soft power across the continent:

Beijing—Chinese and African leaders wrapped up a summit on Sunday with deals worth $1.9 billion and assurances from China that it would not monopolize Africa's resources as it builds influence across the continent.

The agreements, signed between 12 Chinese firms and various African governments and companies, followed Chinese President Hu Jintao's pledge on Saturday to offer $5 billion in loans and credit, and to double aid to Africa by 2009.


The deals reached Sunday include commitments from China to build expressways in Nigeria, lay a telephone network in rural Ghana and erect an aluminum smelter in Egypt, the state-run New China News Agency reported.

And why not? The West doesn’t coordinate its efforts to build African infrastructure. It isn’t interested in trying to extract most minerals from Africa if they can be found in more stable, less distant regions. For their part, African governments know that little aid or comfort are forthcoming from the West—so why not look East?

The problem for China will come when the governments participating in some of these new deals face civil war, insurrection or just sub-Saharan Africa’s perennial chaos. With whom will China do business in these kinds of deteriorating situations?

The PRC could find itself in the same position as Western companies trying to fill ever-increasing demands for coltan, an ore needed to manufacture of cell-phone and other types of circuit boards. Eighty percent of the world’s coltan is in Congo, and Western companies routinely cut deals with the Congo government, the rebels, Rwandan and Ugandan poachers, or whoever else can supply the mineral.

The PRC is betting heavily that its development deals and aid will provide stability to its new trading partners—but if China’s efforts to create a more prosperous and stable Africa fail, it will still enjoy widespread good will and important contacts with those who control Africa’s resources.

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