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Sunday, September 2, 2007

Chinese Mark on Africa Means Commerce -

Chinese Mark on Africa Means Commerce -
Associated Press

Chinese Mark on Africa Means Commerce

By HEIDI VOGT 09.02.07, 10:34 AM ET

DAKAR, Senegal -

Selling shoes in the sweaty afternoon air of a West African market, Ousman Ka owes his job to China - or, more precisely, to Lu Hui, the wrinkle-faced Chinese man in the blue sweater vest sitting behind him.

"Before I was out of work, for about five years. Now I get by," says Ka, 29, from behind the counter of his stall as he pulls out blue-sequined flats for a woman's inspection.

Nearly 4,000 miles away, in the copper mines of Zambia, it's a different story. Keith Mule, who maintains machinery at a Chinese-run mine, says he's making about half the salary of his counterparts at other mines in the area. Union heads say they have less negotiating power with his employer, a Chinese firm that's backed by the government. And dozens of workers died two years ago in an explosion at a nearby Chinese-owned mine.

"I am not able to live comfortably," said Mule, 52, who is supporting two daughters and his sister's son. "We are just living by chance."

From market stalls to mines, China is everywhere in Africa these days. The continent is possibly the most visible example of how China - in many ways a developing country itself - is changing the rest of the developing world, faster than virtually anyone thought possible.

Yet the China-Africa relationship comes with both significant promise and deep unease. On a continent long dominated by Western colonial powers, China offers hope and the economic beacon of a country that has itself grown at a startling rate. But there is also the fear that once again, a world power has come to cozy up to corrupt governments and rob Africa of its resources, leaving ordinary Africans worse off than ever.

"African nations that are enthusiastic about China's arrival on the continent may wind up to discover that they have allowed in a new colonial power with an Asian face," says Adama Gaye, the Senegalese author of "China-Africa: The Dragon and the Ostrich."

Two-way trade between Africa and China surged 40 percent to $55.5 billion last year, up more than fivefold from 2000. That still lags behind trade between Africa and the U.S., which hit more than the $70 billion in 2006. But Beijing expects trade with Africa to reach $100 billion by 2020.

Even air routes have begun to reflect the China boom. Planes head out from Beijing, Shanghai, Guangzhou and Hong Kong to more than 20 African cities at least once a week. By contrast, regular flights from the United States reach just eight African cities.

Much of the money is still tied to raw materials such as oil, metals, minerals and timber to feed China's vast economic machine. China - the world's second-biggest consumer of oil after the U.S. - buys two-thirds of Sudan's oil. It is also a major customer in Nigeria and Angola, with purchases expected to grow.

Then there are the infrastructure projects to court resource-rich countries. China is rebuilding much of Angola's war-ruined infrastructure, lending millions to the oil-producing country. With financing from China, a Hong Kong firm is spending $300 million to rebuild an east-west railway destroyed during more than two decades of civil war. China is also funding roads, a cell phone network, water pipelines, and hospitals.

Chinese contractors started entering the Angolan market in 2004 and have begun to displace the Portuguese and South African firms that had dominated projects there, according to a report by South Africa's Center for Chinese Studies.

Meanwhile, China's targets have grown beyond oil and coal.

China's largest manufacturer of telecommunications equipment, Huawei Technologies Co., employs more than 2,500 people in more than 40 African countries. In 2006, Huawei reported contract sales of $2.1 billion in Africa. The company has won contracts in Africa with European mobile phone companies like France Telecom (nyse: FTE - news - people ) and African operators like Morocco Telecom.

"I don't think it boils down to a raw commodity story. It's far bigger than that now," said Nicolas Pinaud, a Paris-based economist at the Organization for Economic Cooperation and Development who studies Asian investment in Africa.

The Chinese influx is trickling down to market stalls and mom-and-pop shops. There are now about 200 Chinese-run market stalls on Boulevard du General de Gaulle in Dakar, up from just a handful six years ago. Gaye, the author, jokes that the street should be renamed Boulevard de Chairman Mao Zedong, after the founder of China's ruling communist regime.

The merchants provide not just jobs for those like Ka, but also cheap goods. At Lu's market stall, a middle-aged man inspects a pair of white plastic loafers and says that for him, it's all about price. He says he now gets shoes for about $2 instead of $2.50 - a small but important difference given that he has six children to buy shoes for.

Yet the same Chinese business and cheap goods are harming the African economy elsewhere, perhaps most notably in the textile and mining industries of southern Africa.

The Chinese have built textile factories in Lesotho, Zambia and Kenya, and in South Africa 60 percent of all textiles and 89 percent of clothes now come from China, according to the country's Textile Federation. But that influx of low-priced goods is putting thousands of workers in the South African textile industry out of jobs. South Africa's textile union threatened last year to boycott sellers of Chinese products, and quotas on Chinese goods have now been put into place.

China is also mining uranium in Niger, iron and steel in South Africa and nonferrous metals in Angola, among others. Its state-owned nonferrous metals company - owner of the mine where Mule works - has invested more than $300 million in Zambia and promised over $200 million more last year for a copper smelting facility.

But with the Chinese mines have come complaints about low pay and unsafe working conditions. Coal miners in Zambia have gone on strike. Pay disputes are common and Chinese security guards have fired on protesters.

A 2005 copper mine explosion left 51 Zambian workers dead. Keith Mule was there.

"We were working and all we saw was the smoke ... I was one of the people who went there and found the bodies that were mangled and scattered all over," he said.

Since then, he said, safety procedures have improved, but he still thinks they were still better off when his mine was owned by the Zambian government. At least the government used to give out decent bonuses and spoke the same language as the workers.

Politicians have picked up on the anti-China sentiment. South African President Thabo Mbeki has complained publicly that China could end up assuming the role of Africa's former colonizers, raping the country of its raw materials for its own selfish gain.

"They are not here to develop Zambia, they're here to develop China," one Zambian legislator, Guy Scott, has complained. When Chinese President Hu Jintao visited the continent earlier this year, he skipped a planned trip to Zambia's copper mining region over concerns about protests.

There has also been a backlash against Chinese oil firms, which are suffering attacks similar to those that have plagued U.S. and European multinationals on the continent for years. In Ethiopia in April, a rebel attack on a Chinese oil company compound left nine Chinese and 65 Ethiopians dead.

China likes to portray its involvement in Africa as strictly business - no one tells anyone else how to behave, and everyone makes money. But that policy of operating on purely business terms has raised questions about whether China will in fact hamper the progress of human rights in Africa.

For example, China is accused of protecting the brutal government of Sudan, its oil supplier, despite the killings in Darfur. The Chinese also helped construct a private palace for Zimbabwean President Robert Mugabe, who is ostracized by Western governments that accuse him of ruining his nation's economy and stifling democracy. The structure has a pagoda-style roof and is decorated with Chinese dragons.

In the end, some Africa analysts say, the continent can benefit from the Chinese, but only if African countries can do what they did not with earlier powers - band together to demand fair terms.

"Handled well, the Africans can extract a lot from this relationship," says Chris Alden, an international policy expert at the London School of Economics who has studied China-Africa relations since the early 90s. "Whether it's balancing the West against China or requiring the Chinese to hire more African laborers. ... They need to negotiate.

Copyright 2007 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

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