Monday, November 26, 2007

China in Africa - The Dragon's Imperialism

We have posted before about Chinese imperialism here and here and also here so Socialist Banner cannot be accused of neglect on this issue . Once again a news item brings up the reality of Chinese expansionism and for those who wish to simply equate imperialism with the Western powers socialists know if it waddles like a duck , quacks likes a duck , it is a duck . By 2010, China will have overtaken the US and France as Africa's biggest trading partner. Africa hosts about 30 percent of the world's mineral resources But they were relatively under-explored and under-exploited except in South Africa. Reasons for this include political instability, the spread of Aids and a lack of infrastruture in many African nations.

"For China to become a major power it needs to continue its double-digit economic growth of recent years. For this it needs energy and markets," Prof M Venkataraman, of the University of Addis Ababa said . ,Those markets are worth $40bn in 2004, a tenfold increase in under a decade. Most African countries now have a growing trade deficit with China, in spite of favourable tax-free trading agreements. Ethiopian exports to China reached $132m (£63m) in 2006, a figure dwarfed by the value of Chinese imports of $432m (£206m).

Many Chinese firms use large numbers of local workers but wages remain low. Taking advantage of low labour costs, the Chinese are also building factories across Africa. Africa's need for new and better roads, school buildings, computer networks, telecoms systems and power generation has opened a lucrative window of opportunity for Chinese firms. Chinese companies seek profits in Africa as they bequeath the continent that new infrastructure.

"China is hungry for minerals and Africa has rich reserves of cobalt and copper," says Li Xiao Dong who runs a factory in Huayou , China company that processes the raw materials and then sells them on to other Chinese factories . Africa's minerals are vital for China.

China have bought 20% share in Africa's and South Africa's largest bank, Standard Bank Group Ltd. (SBK.JO) , the Beijing-based Industrial & Commercial Bank of China .

"...they [ICBC] have the strategic imperative and a commercial incentive - they have paid a premium."

The two banks have identified an initial list of 20 key customers in Africa that they will jointly market to, and Leith said a number of specific "major" transactions are being pursued across the continent in the power, petrochemicals and construction industries. Standard Bank has agreed to market to more than 800 Chinese clients already active in Africa.

In another business deal OIL giant Shell is considering selling stakes in two offshore Nigerian oil and gas projects to CNOOC, the Chinese state-controlled company

In Darfur , Sudan , a contingent of the Peoples Red Army has arrived to join United Nations / African Union troops , to which the rebel force Justice and Equality Movement said :-

"We oppose them coming because China is not interested in human rights. It is just interested in Sudan's resources. We are calling on them to quit Sudan, especially the petroleum areas... What I am saying is that they are taking our oil for blood .China has so far only offered $1 million for displaced Darfur people. Meanwhile they are sucking a million barrels of oil out of Sudan every day. We do not welcome them."

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