News / Africa

Analysts See African Backlash Against China

Chinese President Hu Jintao (2nd R) and Ghana's President John Atta Mills (2nd L) attend a signing ceremony after a welcoming ceremony at the Great Hall of the People, in Beijing, China, September 2010.Chinese President Hu Jintao (2nd R) and Ghana's President John Atta Mills (2nd L) attend a signing ceremony after a welcoming ceremony at the Great Hall of the People, in Beijing, China, September 2010.
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Chinese President Hu Jintao (2nd R) and Ghana's President John Atta Mills (2nd L) attend a signing ceremony after a welcoming ceremony at the Great Hall of the People, in Beijing, China, September 2010.
Chinese President Hu Jintao (2nd R) and Ghana's President John Atta Mills (2nd L) attend a signing ceremony after a welcoming ceremony at the Great Hall of the People, in Beijing, China, September 2010.
Anne Look
— Ghana has arrested more than 100 Chinese nationals accused of illegally mining gold in that country. Zambia seized a Chinese coal mine in February over safety concerns. And Gabon is planning to take back assets from three foreign oil companies - including one from China. These moves and others have some analysts pointing to a backlash against Chinese investment on the continent. While experts say the China-Africa honeymoon may be over, divorce is not likely.
 
China became Africa's top trade partner in 2009. Bilateral trade hit nearly $200 billion in 2012. Some Africans believe they are getting the short end of the stick, however, as they export valuable natural resources to China without receiving much in return by way of jobs or revenue.

Bright Simons, the director of development research at the Ghana-based IMANI group, said China is no longer seen as just a benefactor giving out loans and sending workers to build cheap or free roads, hospitals and stadiums. China is a business partner.
 
"That newfound pragmatism is all the sudden showing up in so many different places at the same time, which is maybe creating the impression that there is some kind of rolling back of the Chinese-African relationship," said Simons. "My view is that it has just gone to another phase, a more mature phase, where Africans are much more sober about what it will take to engage China on a level playing field. It's becoming quite clear that the Chinese are just as vigilant about potential profits as the Western firms and the Western governments are. And for that reason, there is less of that wide-eyed enthusiasm about China."

Crackdown

Ghana is cracking down on foreigners involved in small-scale gold mining, known as "shallow mining," which Simons said has surged in recent years as the global price for gold has fallen making the more capital-intensive deep-pit mining less profitable. The government has rounded up more than 100 Chinese nationals for deportation.  
 
Only Ghanaians can get government concessions for shallow mining, but Simons said they then "rent" them out to foreigners who have the resources and training to actually get the gold.
 
Analysts say African countries, like Niger and Gabon, just want to get more for their natural resources - more state revenue, more local jobs and a better standard of living.  Worldwide demand for resources like oil, coal, iron ore and uranium has strengthened their bargaining position.  Many countries are also increasingly concerned about exploitative or illegal practices.
 
Ben Payton, Africa analyst for the London-based risk analysis firm Maplecroft, says ties between China and African governments are for the most part "very good and getting stronger." But he said the alleged tough treatment of local workers by Chinese firms could put relations to the test.
 
"In places like Zambia, like Ghana, there's a lot of resentment against the Chinese and a lot of pressure on the government to avoid granting concessions to Chinese companies. In the longer term, pressure from below really is going to be the challenge for the China-Africa relationship," he said.
 
Payton said African countries are setting quotas on the number of foreign employees that companies bring in, and are demanding that investors build refineries to process raw resources locally.
 
China is the world's second largest consumer of oil after the United States. It gets about a third of its oil from Africa, including a small portion from Gabon.

Offshore drilling licenses up for grabs

The central African country is about to kick off a new round of bidding for offshore drilling licenses. At the same time, Gabon's government says it is planning not to renew licenses for existing oil fields held by three international oil firms, including Addax, a subsidiary of China's Sinopec.  

The government accuses Addax of irregularities in reporting its bottom line that reduced Gabon's cut of the revenues generated. Addax has denied this.
 
Payton said this dispute reflects Gabon's desire to derive more benefits from its own natural resources.

"What I suspect is that by cracking down on Addax - because this is the second time that Addax has had one of its licenses revoked -- it's probably trying to create a space for the new state oil company, the Gabon Oil Company, to operate because the fields that were operated by Addax will go to the Gabon Oil Company," he said.
 
But Payton said production at that first oil field seized from Addax has declined considerably since the GOC took over, raising questions as to whether the state-owned company is up to the task.
 
Despite the recent turbulence in Chinese-African economic deals, analysts tend to agree that the partnership is here to stay and will only grow - but perhaps on more equal terms.

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Comments
     
by: Wangchuk from: NYC
June 14, 2013 9:50 AM
China is in Africa for only one purpose: to obtain natural resources to feed China's economic development. The Chinese Govt doesn't care about human rights in Africa. They side consistently with authoritarian govts who oppress their own citizens. China doesn't believe in labor or economic rights. They even sided w/ the genocidal regime in Sudan when it started killing African Sudanese.


by: Sam from: Ethiopia
June 12, 2013 7:25 AM
The advantage with the chinese is that they are productive and if govts. are strong and the system less prone to corruption, they can help African countries develop. The reverse is true if govts. are weak and corrupt system prevails. Visible physical end product are the quality of the chinese, unlike the west. I anticipate no backlash in short time period, maybe in decades when what they can contribute dwindls.

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