Tools: Save | Print | E-mail | Most Read
Ties Break 'Products-for-Resources' Model
Adjust font size:

By Ren Ke

In his office in Harare, Frank Wu oversees a team of local administrative staff that run his company, Shomet Industry Development - one of the largest Chinese companies in Zimbabwe.

Wu was sent to Zimbabwe in 1999 as an employee of a State-owned Chinese enterprise. Two years later, he left the company to start up his own business in the country.

Wu found that agricultural machines were badly needed as some farmers, who at the time had benefited from Zimbabwe's land reforms, wanted to increase production.

He bought some used machines and materials, and managed to re-equip and re-design them. Orders started to flood in and along with it, loans from local banks, helping to grow his business.

After its initial success, Wu's company then entered into the local construction, engineering, transportation and furniture sectors.

All of his businesses are thriving. His 400 local employees receive wages ranging from US$100 to US$500. The country's annual GDP is no more than US$300 per capita.

Wu lives with his family in Zimbabwe, so he has only been back to China once since they moved.

"When I had just started my business, I could not afford the air tickets, but now I do not have time to go back", Wu said.

Wu is not alone - more than 5,300 Chinese-born citizens currently reside in Zimbabwe, helping him to overcome his homesickness.

Looking at the bigger picture, Chinese businessmen are now spreading across the African continent - from Somalia on the banks of the Red Sea, to Morocco bordering the Atlantic Ocean. There is hardly an African nation that has been ignored by them.

They build huge manufacturing plants, providing products ranging from daily necessities and home appliances to motorcycles. They have also set up Chinese markets to sell their goods labeling them as "Made in China".

The Chinese entrepreneurs have constructed huge infrastructure networks to service the areas surrounding their factories - ranging from railway networks and houses to hospitals and schools.

In some oil-producing countries like Sudan and Angola, Chinese companies have helped to establish oil-refining facilities.

Along with the industrialists, Chinese leaders are not far behind. Chinese President Hu Jintao visited Nigeria, Morocco and Kenya in April, and Premier Wen Jiabao swept through seven African countries in June.

In November last year, Beijing hosted the Sino-African Summit, giving a warm welcome to leaders of 48 African countries in the hope of forging "new strategic partnerships".

This has paid dividends for both sides, resulting in bigger contracts for Chinese businesses, more aid for Africa and cancellation of debts for the most underdeveloped African nations.

High-level exchanges have helped to promote international economic relations. Chinese companies, albeit mostly State-owned, are heading for Africa with more and more employees, technology and investment - a total of US$6.3 billion at present. On top of this, the trade volume between China and Africa has quadrupled since 2000, and is expected to exceed US$100 billion by 2010.

However, the present nature of Sino-African trade largely products in return for resources has raised concerns that relations between China and Africa has the potential to become akin to that of the old European colonial empires - one of exploitation and suffering for Africans.

Wang Yingying, a researcher with a leading thinktank the China Institute of International Studies disagrees with this notion.

"China's approach to Africa is totally different from that of the old European colonists," she said.

Wang added: "Controls in politics and sovereignty of a country always accompany colonialism, however, China never intervenes with African countries' domestic affairs, and does not have the intention to do it either."

History has witnessed the violence that European colonists committed in Africa - as some experts have said, they came for trade at first, and later with army flags, or, more accurately, the army flags went first, and trade followed. Resources were plundered and people were slaughtered, while poverty remained.

Today, some African nations, such as Sudan and Zimbabwe, are undergoing sanctions imposed by the United States and European Union. Economies have declined, people have lost jobs, and hyperinflation has set in inflation in Zimbabwe is expected to exceed 4,000 percent this year.

"China's aid to us comes with without political preconditions," said Prime Minister of Guinea-Bissau Aristides Gomes. "We have no worries in cooperating with China."

Political conditions do not exist, let alone intervention. This is in spite of vociferous opposition from the US and EU, particularly in regard to Sudan and Zimbabwe.
"Sanctions cannot solve problems, it impoverishes local people. China's approach supports Africa's industrialization, and benefits the people too," Wang said.

In the face of US and EU pressure, Chinese firms have helped Sudan to establish its own oil industry, resulting in an 8 percent growth in the country's economy last year.

Wu, along with the rest of the Chinese community, is helping to implement sanction-torn Zimbabwe's economic revival program. He is expected to hire as many as 800 local employees this year when his new real estate project is launched.

Professor Yang Guang, director-general of Institute of West Asia and Africa Studies, told China Features: "We cannot mix colonialism with exploiting resources, if we view exploiting resources as colonial behavior, we will find that the whole world is now conducting colonial actions."

According to Yang, the reason behind the warming of Sino-African relations lies in the different benefits and comparative advantages to their economies. While China has a vast wealth of capital, more advanced technology and administrative experience, Africa has an abundance of unexploited natural resources.

Yang believes that China is on the same road of development as Africa albeit a few miles ahead. Compared to economically more developed countries, China only has a cheap labor force and a huge domestic market to offer to potential investors.

As China's commerce minister pointed out in order to buy an Airbus, Chinese workers have to produce 800 million shirts.

Foreign investment in China has intensified ever since reforms were introduced to open up its domestic market to the outside world. Foreign businesses gained a foothold in China's domestic market and recorded healthy profits, assisted by China's cheap labor costs. However, the benefits of this investment are undoubted.

As a result of the swathes of foreign investment in China, the speed of industrialization has accelerated, while raising the standard of living.

At the same time, China's exports have been upgraded. Manufactured goods such as machinery, electronic products and textiles have replaced primary products such as grain, minerals and timber.

"Not only should African countries learn from developed countries like Japan, but also some developing countries such as China and India," Namibia's President Pohamba said.

"At present, we should peg our eyes to China, for its experience is more valuable for our reference."

Despite the fanfare in increased Sino-African relations, Wang admitted that imbalances did exist within the relationship. China's foreign direct investment in Africa, which is more important to development than trade, still cannot match the scale of the bilateral trade.

These problems are being addressed. At the recent Sino-African summit, China set aside a development fund of US$5 billion, which will be primarily used to encourage Chinese companies to invest in Africa.

Some development-oriented methods have also been adopted, such as sending agricultural experts to Africa, and widening the practice of training African staff.

A Chinese idiom says that it is better to teach someone how to fish for themselves rather than to constantly supply them with fish.

When Chinese construction companies went to Somalia after its civil war, they could hardly find a brick mason.

Today, various training centers have been set-up ZTE Corporation, a Chinese telecommunication equipment producer, has established 15 training centers across the continent, training more 4,500 local employees each year.

ZTE Vice-President Zhang Weimin said: "Chinese businesses in Africa are not just selling and buying, but helping the continent to enhance its capacity for development."

However, obstacles still exist. Yang pointed out that "low investment in Africa is not only a problem for China, but also for the whole world".

Situation is made worse as some African nations have a comparatively poor environment to encourage investment ranging from unsteady political regimes, corruption, violence and flawed legal systems.

Yang said: "As China sticks to a non-interference policy with regard to Africa, African countries will have to try and solve these problems by themselves."

The situation, however, across the continent is gradually improving. Many civil wars have ended, and it now on the way to development - the continent's economy grew by 5.5 percent in 2005 and is expected to be higher this year.

Referring to the new era of Sino-African relations, Chinese foreign ministry spokesman, Qin Gang, said: "Times have changed, and so has the direction of development in Africa."
This new era in Sino-African relations is heralding a new style of bilateral relations that goes beyond the age-old doctrine of products in return for resources.

Along with many state-owned and private businesses, more and more Chinese entrepreneurs like Wu will head for Africa in search of their fortune while also bringing prosperity to the locals.

(China Daily January 19, 2007)

Tools: Save | Print | E-mail | Most Read

Related Stories
A Busy Year of Diplomacy Ahead for China
China Builds 1st Institute on African Farming
Southern Airlines Launch First Regular Flight to Africa
Egypt's Veteran Diplomat: 2006 Is Harvest Year for China's Diplomacy
Zimbabwe Loan Report Denied
China-Africa Relations Advance to New Stage in 2006
Ten Honored for Promoting China-Africa Friendship
China, West African Nations Sign Credit Agreement

Product Directory
China Search
Country Search
Hot Buys
SiteMap | About Us | RSS | Newsletter | Feedback
Copyright © All Rights Reserved     E-mail: Tel: 86-10-88828000 京ICP证 040089号