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TRADE WARS
China tightens grip on Africa's resources
by Staff Writers
Johannesburg, South Africa (UPI) Mar 27, 2013


China's Xi signs multi-million-dollar deals in Congo
Brazzaville (AFP) March 29, 2013 - China's new President Xi Jinping on Friday signed deals worth several million dollars with his Congolese counterpart in sectors as varied as banking and infrastructure, on the final leg of his three-nation Africa tour.

His visit to Tanzania, South Africa and now the Republic of the Congo underscores Beijing's growing presence in the resource-rich continent.

Xi and his wife Peng Liyuan were greeted by President Denis Sassou Nguesso on their arrival in the capital Brazzaville Friday, as well as several thousand Congolese wearing T-shirts emblazoned with images of the two leaders, dancing under a blazing sun.

Xi said that he hoped to "deepen mutual understanding and friendship (with the Republic of the Congo) and lift bilateral ties to a new and higher level", China's state-run Xinhua news agency reported.

The two leaders signed 11 deals worth several million dollars after Xi arrived for his two-day visit, the first by a Chinese president to the impoverished country of four million with significant oil resources.

The accords cover projects in a number of areas including communications, infrastructure and banking, according to an official document seen by AFP.

They build on two further accords worth several billion dollars already underway, one of which will finance the building of more than 500 kilometres (300 miles) of highway between Brazzaville and the economic capital on the Atlantic Coast, Pointe-Noire.

As the two nations prepare to celebrate 50 years of bilateral ties, President Sassou Nguesso praised China, which he said respected and helped Africa, according to Xinhua. He also rejected claims of neo-colonialism sometimes levelled at the world's second-biggest economy.

China is already Congo's largest trading partner, with bilateral trade ballooning to five billion dollars in 2012 from $290 million in 2002, according to Xinhua.

Later Friday, in an address to Congo's parliament, Xi said that both nations shared a desire to develop.

"We have the historic mission of achieving national development and the happiness of our people," the Chinese leader said.

"In the future, the development of China will represent an unprecedented opportunity for Africa, just as Africa's development will be for my country."

Unity was the only way forward, the Chinese leader said.

"Division would only lead to chaos, and chaos would only plunge Africa into backwardness," Xi was quoted by Xinhua as saying.

Xi's African tour, part of his first presidential trip that began in Russia, has also taken him to Tanzania and South Africa.

China's business boom has seen financial and trade ties rocket in recent years as it sources many of its raw materials from Africa.

But ahead of Xi's visit to Congo, many expressed doubt that he will bring job opportunities with him, as Chinese companies that set up shop in Africa often bring their workers with them.

"It's like we don't have able hands in Congo," a teacher at a training college told AFP. "If you import labour when there are no able people or specialists, that's OK. But they even bring their own chauffeurs. There's no transfer of abilities."

Xinhua said however that more than 85 percent of the staff of some 2,000 Chinese companies operating in 50 African countries are Africans.

In South Africa, Xi attended the summit of the BRICS group of emerging economic powers -- Brazil, Russia, China, India and South Africa -- at which they agreed to launch a new development bank while failing to set up an infrastructure fund.

South African President Jacob Zuma, after meeting Xi on Tuesday, hailed China's economic success as an inspiration for Africa's biggest economy, but urged more equitable trade ties.

China's new President Xi Jinping is touring Africa, underlining the mineral-rich continent's strategic importance for Beijing in its relentless drive to acquire vital resources like oil, natural gas and copper in return for massive investment.

China's success in Africa and its recent expansion of operations into the Middle East and Latin America, has led some U.S. lawmakers and business leaders to warn that this is undermining U.S. objectives and influence in a region riding high on an oil and gas bonanza.

Xi is making his first foreign tour since he succeeded Hu Jintao as China's head of state this month. He arrived Sunday in Dar es Salaam, capital of Tanzania, where he inaugurated a $10 billion port project. It will be linked to an industrial zone designed as a hub for trade between East Africa and Asia.

Xi declared Beijing would make good on a 2012 pledge to provide $20 billion in loans over three years for African infrastructure development, agriculture and businesses.

It's through these kinds of massive infrastructure projects that the Chinese are making major inroads into Africa, where the lack of rail networks, highways, airports, factories, power plants and oil refineries has slowed the continent's economic development so badly since the colonial era of the 1960s.

In this way, the Chinese also provided the infrastructure it needs to develop the oil fields and vast deposits of copper and uranium that it seeks to exploit.

Power generation projects have priority, with some $5.3 billion invested in Ghana alone, including the $660 million Bui Dam. Ethiopia, Angola, Sudan and Nigeria -- the last three major oil suppliers to China -- are also key beneficiaries.

Oil and coal accounted for 50 percent of China's imports from Africa in 2012, minerals and other raw materials made up most of the rest.

Overall Chinese trade with Africa was nearly $200 billion for the year, a fourfold rise in six years.

Tanzania, along with neighboring Mozambique, is in the forefront of an East Africa natural gas boom that could transform the underdeveloped region into an energy powerhouse ideally placed on the Indian Ocean to export to energy-hungry China, as well as Japan and India.

China, the world's leading energy consumer, was quick to move in on that enterprise.

It offered to build a 332-mile gas pipeline to link the gas fields in the south to the main port of Dar es Salaam, even though there isn't yet the gas to fill it or any plan to sell what little is actually being produced now.

China is making these huge investments in oil, mining and construction through the China Export-Import Bank, its financing arms in Africa.

Meantime, the China National Petroleum Corp. this month acquired a 20 percent stake in the offshore gas project, believed to be one of the world's biggest untapped fields, operated by Italy's Eni and worth $4.21 billion.

Xi later flew to South Africa, where he attended the fifth annual BRICS summit of the world's major emerging economies -- comprising Brazil, Russia, India, China and South Africa -- in Durban Tuesday.

He ends his tour with a two-day visit to the Democratic Republic of Congo starting Thursday.

China's economic juggernaut has begun making waves in Africa, with senior economists complaining Beijing's engaged in what Nigeria's central bank governor Lamidu Sanusi calls "a new form of imperialism."

"China takes from us primary goods and sells us manufactured one," he wrote in the Financial Times. "This was also the essence of colonialism."

Xi has sought to calm such concerns but the flood of cheap Chinese goods has triggered a sharp downturn in Africa's manufacturing sector.

Sanusi, echoing a growing chorus across Africa, noted: "China is no longer a 'fellow underdeveloped country.

"China is the second biggest economy in the world, an economic giant capable of the same forms of exploitation as the West. China is a major contributor to the de-industrialization of Africa and thus African under-development."

The Chinese juggernaut's also causing concern in Washington.

"America is losing ground and ceding economic opportunities in Africa to competitors," U.S. Sen. Chris Coons, (D-Del.), chairman of the Senate Foreign Relations Subcommittee on African Affairs, warned March 7.

This, he said, "should serve as a wake-up call for enhanced American trade and investment" in Africa.

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