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China still trumps the competition in Africa Inc - FT.com
S President Barack Obama earlier this year
hosted the first ever US-Africa summit. The
event confirmed a renewed push by developed economies to cement ties with
Africa, with Europe holding its own regional gathering and Japan’s prime
minister travelling to sub-Saharan Africa for the first time in nearly 10
years.
Left unsaid in public was that Washington,
Brussels and Tokyo were all aiming to fight back against China’s growing
commercial influence in Africa, the second-fastest growing region in the world. Did
Mr Obama and his counterparts succeed? In short, no.
the chief executives of six companies with huge operations on the continent –
ranging from banking to telecoms to commodities and consumer goods – were asked
which foreign power was playing its cards best in Africa. The unanimous answer:
China is still winning, and big.
“China is doing a fantastic job because they
are coming with patient capital and [a] long-term vision,” said Vimal Shah,
chief executive of Nairobi-based consumer group Bidco. He added: “They are not
trying to dictate to you how to run your country”.
Ivan Glasenberg, the South African chief
executive of commodities company Glencore, highlighted Beijing’s role in building roads, ports and power Stations: “China is investing in Africa . . . and they are doing a lotin infrastructure.”
Herbert Wigwe, the head of Nigeria’s Access
Bank, echoed the consensus view when he observed: “I have gone to almost every
country in Africa – at least to 50. The Chinese influence is growing by the day
and they are getting it right.”
That China is still ahead in Africa is,
perhaps, not surprising. Chinese trade with the region has grown from less than
$10bn in 2000 to more than $200bn last year, overtaking the US and the colonial
European powers. Cheap credit lines have continued to flow, and Beijing has
also maintained its policy of political non-interference.
But what is perplexing is that others have
not been able to at least close the gap, especially after Beijing came under
criticism inside and outside Africa this year for its “cheque book” policy.
This refers to its practice of lending money to African countries to largely
benefit its own construction groups, which have built everything from roads to
hospitals on the continent.
China, however, appears to have outsmarted
its rivals in recent months by taking steps – some symbolic and some real – to
placate its African critics.
Chinese officials have, for example,
acknowledged some mistakes. In one of the most candid mea culpas, Zhou
Xiaochuan, governor of China’s central bank, admitted during a meeting of
African finance ministers and central bank governors that some Sino-African
deals had been “not so good, not so satisfactory”.
And Li Keqiang, China’s premier, acknowledged
during his first trip to the continent earlier this year that the relationship
between Beijing and Africa had suffered “growing pains”. Such comments were
music to the ears of disenchanted African officials.
China has begun to address the larger
criticism: that it is only interested in Africa’s commodities and only lends
money to infrastructure projects that benefit its own construction companies.
As the criticism mounted – and the demand
for commodities cooled – Beijing promised
to encourage investments in other African sectors, particularly manufacturing
and banking. Said and done: First Automotive Works, one of China’s largest car
parts companies, opened a plant this year in South Africa; shoe producers have
set up shop in Ethiopia; and Kenyan banks are building relationships with
China’s state-owned financial institutions.
China has also taken a baby step away from
its “cheque book” policy of multibillion-dollar bilateral deals. In May, it
created a $2bn fund in partnership with the African Development Bank and
announced that it would open the resulting contracts to the most suitable
bidder – not just Chinese companies.
Even if some of these measures are largely
symbolic, they appear to have succeeded at quieting the critics, allowing
Beijing to return the focus to its unmatched financial firepower. Little
wonder, then, that Africa Inc still is in love with China – despite the
overtures from Mr Obama and others.
COMMENT:
While
I went through a short informative article published in Financial Times it
clearly revealed some most likely unwitting overlooked point of important
concern by relevant people working on policy matters and also the analysts.
On
going through the above placed article the points will be clearly seen and
elucidate the damage done even a child WOULD UNDERSTAND. Had these points been pointed out well
in time and the President thoroughly briefed in time and held back sanctioning
billions and billions of tax paid dollars to countries as grants of no return
of any type, IN THAT CASE the same could have been fruitfully used in long term investment in important sectors of African developments which
could have lessened the difference to an acceptable margin.
Such
omission and oversights are not without any reason, American elites opines the
policy makers are more interested to pour
more money to Israel than on other sectors. If things runs like this then who
can stop China to one day buy the whole world with the help of unwitting overlooking
vital important subject matters by people with motive.
China still trumps the competition in Africa Inc
http://www.ft.com/intl/cms/s/0/87075f26-4eda-11e4-b205-00144feab7de.html?siteedition=intlS President Barack Obama earlier this year
hosted the first ever US-Africa summit. The
event confirmed a renewed push by developed economies to cement ties with
Africa, with Europe holding its own regional gathering and Japan’s prime
minister travelling to sub-Saharan Africa for the first time in nearly 10
years.
Left unsaid in public was that Washington,
Brussels and Tokyo were all aiming to fight back against China’s growing
commercial influence in Africa, the second-fastest growing region in the world. Did
Mr Obama and his counterparts succeed? In short, no.
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rules must urgently play catch-up
the chief executives of six companies with huge operations on the continent –
ranging from banking to telecoms to commodities and consumer goods – were asked
which foreign power was playing its cards best in Africa. The unanimous answer:
China is still winning, and big.
“China is doing a fantastic job because they
are coming with patient capital and [a] long-term vision,” said Vimal Shah,
chief executive of Nairobi-based consumer group Bidco. He added: “They are not
trying to dictate to you how to run your country”.
Ivan Glasenberg, the South African chief
executive of commodities company Glencore, highlighted Beijing’s role in building roads, ports and power Stations: “China is investing in Africa . . . and they are doing a lotin infrastructure.”
Herbert Wigwe, the head of Nigeria’s Access
Bank, echoed the consensus view when he observed: “I have gone to almost every
country in Africa – at least to 50. The Chinese influence is growing by the day
and they are getting it right.”
That China is still ahead in Africa is,
perhaps, not surprising. Chinese trade with the region has grown from less than
$10bn in 2000 to more than $200bn last year, overtaking the US and the colonial
European powers. Cheap credit lines have continued to flow, and Beijing has
also maintained its policy of political non-interference.
But what is perplexing is that others have
not been able to at least close the gap, especially after Beijing came under
criticism inside and outside Africa this year for its “cheque book” policy.
This refers to its practice of lending money to African countries to largely
benefit its own construction groups, which have built everything from roads to
hospitals on the continent.
China, however, appears to have outsmarted
its rivals in recent months by taking steps – some symbolic and some real – to
placate its African critics.
Chinese officials have, for example,
acknowledged some mistakes. In one of the most candid mea culpas, Zhou
Xiaochuan, governor of China’s central bank, admitted during a meeting of
African finance ministers and central bank governors that some Sino-African
deals had been “not so good, not so satisfactory”.
And Li Keqiang, China’s premier, acknowledged
during his first trip to the continent earlier this year that the relationship
between Beijing and Africa had suffered “growing pains”. Such comments were
music to the ears of disenchanted African officials.
China has begun to address the larger
criticism: that it is only interested in Africa’s commodities and only lends
money to infrastructure projects that benefit its own construction companies.
As the criticism mounted – and the demand
for commodities cooled – Beijing promised
to encourage investments in other African sectors, particularly manufacturing
and banking. Said and done: First Automotive Works, one of China’s largest car
parts companies, opened a plant this year in South Africa; shoe producers have
set up shop in Ethiopia; and Kenyan banks are building relationships with
China’s state-owned financial institutions.
China has also taken a baby step away from
its “cheque book” policy of multibillion-dollar bilateral deals. In May, it
created a $2bn fund in partnership with the African Development Bank and
announced that it would open the resulting contracts to the most suitable
bidder – not just Chinese companies.
Even if some of these measures are largely
symbolic, they appear to have succeeded at quieting the critics, allowing
Beijing to return the focus to its unmatched financial firepower. Little
wonder, then, that Africa Inc still is in love with China – despite the
overtures from Mr Obama and others.
COMMENT:
While
I went through a short informative article published in Financial Times it
clearly revealed some most likely unwitting overlooked point of important
concern by relevant people working on policy matters and also the analysts.
On
going through the above placed article the points will be clearly seen and
elucidate the damage done even a child WOULD UNDERSTAND. Had these points been pointed out well
in time and the President thoroughly briefed in time and held back sanctioning
billions and billions of tax paid dollars to countries as grants of no return
of any type, IN THAT CASE the same could have been fruitfully used in long term investment in important sectors of African developments which
could have lessened the difference to an acceptable margin.
Such
omission and oversights are not without any reason, American elites opines the
policy makers are more interested to pour
more money to Israel than on other sectors. If things runs like this then who
can stop China to one day buy the whole world with the help of unwitting overlooking
vital important subject matters by people with motive.
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