Daniel’s Blog

Angolan oil exports, the country’s main source of revenue, will continue to increase in the near future thanks to growth in demand from China which will compensate for possible setbacks in other markets, according to analysts from Portugal’s Banco BPI.

“Despite certain conditions that could limit the demand from developed economies, China’s strong growth provides guarantees that, in the near future, demand for Angolan oil should be maintained,” say the BPI analysts in the latest report on Angola, published in September.

Throughout this year Angola has boosted its position as the largest and most reliable oil producer in Sub-Saharan Africa, with estimated production of 1.9 million barrels per day, ahead of Nigeria where the Niger delta conflict has seriously affected production.

Over the next few months an important strengthening of Angolan production capacity should take place, with new oil fields such as Saxi and Batuque starting production and Mondo and Cabinda stepping up their output.

“The demand from other emerging economies, and in particular from China, where demand continues to be high, should be a long term supporting factor. Although the USA still has a significant role, China has established itself as an important candidate for the main destination for Angolan exports,” say analysts, Cristina Casalinho, Paula Carvalho, Susana Santos and Joao Sousa.

In 2007, China represented 28 percent of Angolan foreign sales, 10 percentage points up on the previous year; these oil exports were worth US$ 10.605 billion dollars, second only to exports to the US which reached US$12.855 billion dollars.

However, BPI emphasises that oil export fluctuations to the USA and China follow differing tendencies: the first, historically more important, though losing ground, and the second gaining ground. “It is expected that China will consolidate its position as the main destination” thanks to “the increased closeness of [bilateral] trade relations.”

For the first time in June this year, China’s oil consumption rose above the target 8 million barrels per day.
Currently oil represents around 80 percent of Angolan exports and, directly, over 57 percent of its GDP, which is why it is “vulnerable” to a possible inversion of the oil cycle, which has in recent weeks fallen in the international markets, says BPI.

It is above all thanks to oil, exports of which have been steadily increasing in quantity and value, that the Angolan balance of payments# has undergone a “significant improvement” over the last five years, even with imports increasing three-fold to US$11.7 billion dollars last year.

Linked to this increase in buying from abroad is “the enormous reconstruction drive undertaken by the Angolan authorities, which, in view of the non existence of a developed national industry sector, has meant that all necessary machines and equipment have had to be imported, and also the increased buying power of the population, within an economy which is not diversified,” says the report.

Up until May this year, Chinese exports to Angola grew by close to 140 percent, according to the latest available official statistics, reaching US$ 972 million.

The value for the first five months of this year is close to last year’s total (US$ 1,241 million) and is well over the total for 2006 of US$ 894 million.

“China has intensified its relations with Africa. Aware that the growth of China’s economy is dependent on access to raw materials, the authorities have strengthened relations with African countries, particularly exporters of natural materials, namely via credit lines,” says BPI.

With oil exports taking the Angolan economy to grow at record levels, it is difficult to control inflation, which in July reached 12.5 percent, a big leap compared to the previous month and the highest rate since July 2006, requiring exceptional measures from the government which has for a long time been trying to bring it down to 10 percent.

“Faced with the possibility of speculative prices,” particularly for services, catering and in the hotel industry, Luanda announced that it is preparing legislation to “minimize these effects,” although “rejecting the possibility of imposing administrative prices,” and on the other hand “carefully monitoring the price setting” in the relevant sectors, said the analysts.

Prices for the Angolan consumer have been influenced by logistical restrictions, namely difficulties in the unshipping of goods, but also by the so-called “import inflation”, most recently due to food bought from international markets.

BPI is the main stakeholder in Angolan private banking leader Fomento Angola. (macauhub)

THE dramatic events of the past few weeks, starting with one of the world’s most powerful investment banks — Lehman Brothers — going to the wall and insurer AIG teetering on the brink, has left a wounded western financial world licking its wounds and looking anew at its model of global finance.

Western finance is bound to change dramatically in the next few years. With depleted balance sheets and heightened credit adversity, the void will probably be filled by new players, notably from China and Japan. This could have important implications for Africa, where the resource boom could lead to attractive opportunities for Chinese banks.

While China has already bought into a number of international financial institutions (including Barclays, Morgan Stanley, JC Flowers), Japanese banks moved quickly to take advantage of the carnage on Wall Street to beef up their presence in investment banking. Mitsubishi UFJ has agreed to take a 10%-20% stake in Morgan Stanley, and Nomura says it will buy the Asia Pacific operations of Lehman Brothers for $225m. And with cash not a problem and subprime exposure a relatively alien concept, Asian banks are poised to expand their global presence further.

For China, expansion into the developed world is fraught with political danger, especially in the US, where suspicion of foreign (and particularly Chinese) investment in big US corporations runs deep. So the alternative is to follow patterns of trade, and this points in one direction: emerging markets, particularly Africa.

The case for China’s rapid expansion of trade relations with Africa ($72bn at the end of last year) is premised on the need for resources security to ensure continued rapid economic growth. Hence, its biggest trading partners are commodity rich countries of Africa: Sudan, Angola, Nigeria and SA. The format of getting to the commodities has been innovative, but based mostly on the Chinese extracting resources alone or forming joint ventures with governments, such as the Chambishi copper mine in Zambia, or taking stakes in existing projects, such as a 45% stake in an offshore Nigerian oil field by China National Offshore Oil Corporation.

Deals financed in Africa have been mostly through the China Exim Bank in trade finance and project finance. While details of the financing terms are not readily available, it appears from a World Bank study that a great many, if not most, were priced on favourable terms for the recipient countries, and function essentially as an extension of Chinese aid. But in some cases China has started

co-operating with western banks to do project finance deals, including Sinopec (China Petrochemical Corporation) financing for its joint venture with Angola’s Sonangol for offshore block 18. After initial western banking reticence, the deal attracted a range of western and Chinese bank participation and the political risk of Angola was seen to have been mitigated by the size of Chinese participation.

The China Development Bank assumes an even more important role, in concert with the China Exim Bank, through investment in the $5bn China-Africa Development Fund. It will be used mainly to support African countries’ agricultural, manufacturing and energy sectors, and the development of Chinese enterprises in Africa. The fund signed its first deals with four Chinese companies in Beijing in January to invest in infrastructure and housing projects in Africa.

Traditionally, the presence of banks in emerging markets can be traced to colonial ties.

Proximity is an important factor, and this refers not only to geographic proximity but also to proximity in terms of cultural, linguistic and economic ties. These factors seem to rule out a Chinese banking foray into Africa. At the same time, China has no colonial baggage to render — at least until recently — its economic decisions subject to political controversy in Africa, and it could well be in a good position to exploit growing opportunities.

But the banking market in Africa remains underdeveloped, and poses challenges for institutions hoping to land increasing market share.

Banks will need to develop payment and processing systems to handle international transfers and data-capturing and management information systems to process such data. Crucially, operational and credit risk systems will need to be enhanced. One of the main aims of the Chinese government in opening the banking system to foreign investment has been to gain the necessary expertise to become highly competitive.

But in local markets, and especially emerging markets, local banks may well have an advantage in market information given superior access to corporations, superior relationships and a better understanding of local market conditions. This implies that a foreign bank with little experience in entering foreign markets will need to take a cautious approach. It is likely to start with a fundamental understanding of the key players in the local market, and to approach such institutions with an understanding to co-operate, start joint ventures and eventually to make equity investments. This has been the approach of foreign banks in entering the Chinese banking market.

It came as a surprise, then, when one of the first meaningful investments of a Chinese bank was the 20% stake in SA’s Standard Bank, for $5,5bn. This was a significant outlay, even for ICBC, as the finance equates to 8% of its capital. The reasoning seems sound from a strategic point of view; ostensibly, Standard Bank will help ICBC serve its corporate customers in Africa, while Standard Bank will gain a foothold in China.

The funds that Standard Bank obtained will be used in its further expansion in Africa — Angola and Nigeria in particular — and a private equity fund will be set up.

It is apparent from this that Standard Bank will target growth outside its home market, and will be well placed to target Chinese corporate customers operating in Africa. This presents it with a significant opportunity to consolidate its operations in Africa, and take a large share of business from Chinese clients who will increasingly be important in this area. This puts it at a significant advantage to many other competitors.

The timing of the deal also appears to be fortuitous; for many of the potential competitors, risk appetite will decline as liquidity remains under strain. In China, however, liquidity remains abundant. It seems the Standard Bank deal will be the benchmark investment approach for Chinese banks in emerging markets; target the bigger, better developed institutions with multicountry presence first. For Chinese banks, continuing to acquire stakes in well managed and bigger African banks will seem the most likely strategy to exploit trade ties and project investment. Merger and acquisition activity involving the major Chinese banks is likely to lead to a new era in African banking, and cement the Chinese banks’ position as the new kids on block.

n Meyer is a London-based financial analyst and a research associate for the China in Africa Project at the South African Institute of International Affairs.

(businessday)

A double-headed tortoise weighing only 17g (6 ounces) was recently found in Wuwei, Anhui Province, China.

Chinese scientists were shocked to discover a rare Mediterranean spur-thighed, two-headed tortoise among a shipment of baby tortoises ordered from a local farm where a worker was said to have bought it from a fisherman some two months ago.

They are currently studying this creature that is in good health and is being cared for by the scientists conducting the research.

Initially worried that the tiny mutant reptile would not survive, their fears have been allayed by the fact that in comparison to its siblings, which are all developing at a steady and very normal rate of growth at their home at the Water World Aquatic Farm in the town of Anhui in eastern China, this little baby is thriving and eating twice as much!

“We got it two weeks ago and it’s growing fast, probably because it can eat twice as fast as the others. It’s very rare to see a turtle with two heads, and we plan to keep it and raise it carefully for future research,” said Jimmy Hu, a Water World spokesman.

Is that old axiom about two heads being better than one really true?

Only time and possibly turtles will tell.

(weirdasianews)

Telkom South Africa has signaled its intention to compete in cellular service provision and the small- and medium-business sector with the rollout of W-CDMA from Chinese telecommunications giant Huawei.

With W-CDMA (Wideband Code Division Multiple Access), Telkom will offer high-speed Internet access, video and high-quality voice transmission. The company appointed Huawei as a technology partner to deploy its fixed-wireless and mobile data network.
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“The new technology is addressing customer needs by increasing investment in customer-centric technology that aims to enhance their experience with Telkom,” said Motlatsi Nzeku, Telkom chief of operations. “Telecommunication services is no longer just about innovative technologies; it is about matching with customer demand.”

Huawei brings to the partnership proven innovation, formidable research capabilities, experience with the speedy deployment of technology in emerging and developed markets, and a highly competitive cost structure, Nzeku noted.
Telkom products have fallen out of favor with small businesses because of the relatively high prices for voice and data calls, which were contributing to high overheads. The company’s revenues have also been under significant pressure from declining voice services further impacted by the effects of copper cable theft, Nzeku said.

Nevertheless, Telkom has declared its intention to challenge the domination of the cellular services market by piloting W-CDMA voice services with select customers. It is testing W-CDMA voice services in Gauteng with 38 base stations in the Gauteng metropolitan area and plans to have more than 200 base stations in the Gauteng, Cape Town and Durban metropolitan areas by March 2009.

The company hopes to fully launch its fixed-mobile service by the end of September 2009.

Kenya Airways has officially confirmed that it will be launching new nonstop flights to CAN-Guangzhou, China from its NBO-Nairobi hub 3 times a week using a Boeing 777-200ER. This flight will be replacing the 3 weekly B 763ER service that is flown via DXB-Dubai. The new nonstop NBO-CAN will be in operation effective November 1st 2008 and will result in the carrier offering a total of 6 weekly flights on the NBO-CAN-NBO route i.e. 3 weekly B 763ERs via BKK + 3 weekly B 772ERs nonstop.

Analysis:

A bold yet important strategic move undertaken by KQ by deciding on flying nonstop NBO-CAN instead of the originally planned NBO-DXB-CAN with 5th freedom rights available on the DXB-CAN sector. This means that KQ will become the first ever “sub-saharan African airline” to fly nonstop from Africa to mainland China. KQ’s new NBO-CAN nonstop flight is timed beautifully to connect with LOS, DAR and ACC via NBO in both directions and will give EK, QR and ET a serious run for their money on capturing market share on the lucurative Africa-CAN-Africa route.

(airline-news.blogspot)

China will build a training and surgical heart institute with a capacity to accommodate 100 patients at once at the Muhimbili National Hospital in Tanzania’s commercial city of Dar es Salaam, the Parliamentary Committee on Foreign Affairs, Defence and Security Chairman, Wilson Masilingi, told APA here on Friday.

Masilingi said the move came was a gesture of friendship and strong ties that exist between Tanzania and China over many decades.

“The centre will be a five-storey building with two surgical theatres as well as space to accommodate 100 heart patients,” id Masilingi said.

China has pledged to assist the country with a number of projects, one being the building of an international conference centre at Salender Bridge in Dar es Salaam, he said.

“The project is at the designing stage. The Chinese government will build an agricultural research centre, whose construction is due to start anytime from now,” he added.

According to Masilingi, Tanzania will benefit from Chinese agricultural experts as well.

Masilingi, who together with other members of parliament, had just returned from an official visit of China, was briefing journalists about the tour.

Tanzania sends hundreds of heart patients to India every year at a considerable expense.

(apanews)

Here is a ridiculous, hypocritical, and pompous article by a British writer accusing China of evil and exploitation over natural resources (pot, meet kettle).  A few words before posting the link. Yes, I agree China has significant issues to fix right now, many of which are not too dissimilar from the social problems America faced when it was undergoing industrialization itself.  The article sounds reminiscent of anti-American derision by certain arrogant Brits, 100 years ago, when Britain was declining as a superpower.

What is irritating is an added component of borderline xenophobia that permeates this article and other recent Western media, whether it be over Chinese toys, Olympics, Tibet, or Darfur, etc, which was recently hinted about in a Jeff Yang column published in the Washington Post.  I believe articles like Hitchens’ are as propagandist as any recently biased Western media that have tried to demonize Jews, Arabs, or Persians to the rest of the Anglo world.  It has become very easy to write Western articles about Asians or China as a less human ‘other’, with the attitude that certain evils or guilts are true before investigation.

Biased media can be damaging when uninformed, easily-influenced Americans mentally associate anti-China propaganda with negative attitudes toward Asians and/or Asian Americans.  Current comments below American news sites reveal the blanket stereotypes, racism, and/or bigotry that can manifest itself within everyday Americans who read biased news. If you remain skeptical about the damage, look up the ‘Committee of 100’s disturbing study on American people’s negative views toward Asian Americans, or for a related example read explanations from scholars about why certain criticisms about Israel within America can be anti-semitic and/or alarming for Jewish Americans.

I did not want to link the article until after the above introduction. The piece, published today, and written by Peter Hitchens in a UK paper, is titled ‘How China Has Created a New Slave Empire in Africa’. I have included excerpts and my thoughts in an extended post entry below.

Doing business in Africa was once perceived as a difficult and complex undertaking. The reasons: the numerous processes associated with conducting business, combined with a fragile investment climate and inadequate infrastructure.

But, with fewer conflicts, more democratic elections, and economic growth rates that gradually have begun to compete with those of other developing regions, Africa is proving itself again a continent of positive change.

In Doing Business 2008, the fifth in an annual series of reports issued by the World Bank and the International Finance Corporation, two African countries — Ghana and Kenya –rank among the top 10 reformers worldwide who have made the most significant advances in the aggregate ease of doing business.

Kenya Shows Gains in Reforms Kenya’s reforms have involved an ambitious licensing reform program, which has eliminated 110 business licenses and simplified eight others. These and other changes, combined with financial and technical support of development partners have given promise to companies such as the Kimemia Engineering Company Limited. Over ten years ago, Eddy Kimemia and his wife Diana Ndungu formed their business. Together with their two sons, they hoped to engage in general building construction and civil engineering, including road works. Theirs was a small family business, which faced the typical difficulties of small and medium-scale enterprises in Kenya: lack of access to finance due to inadequate security and perceived risk by potential lenders. Kimemia Engineering Company The Kimemia Engineering Company also bore the additional burden of lengthy business licensing and registration processes, and long delays in payments especially for public jobs.The Kimemias were introduced to the International Finance Corporation’s Small and Medium Enterprises Solution Center (IFC SSC), which, through its SME Risk Capital Fund, offers unique flexible financial products to companies with promise. The couple was able to obtain the required working capital for a US$6.6 million road construction contract which they had won and were also given technical assistance to improve their financial systems. More and more, companies in Kenya continue to benefit from the IFC’s program to boost businesses that have the potential to grow. Through the group’s SSC and business licensing reforms supported by The World Bank, the cost of doing business in Kenya has dramatically gone down. Nosey Be Opens its First Laundry Other reforms also are changing the course of doing business on the continent. In 2006-2007, 24 African countries implemented 49 reforms which have made it simpler to start a business. They have strengthened property rights, enhanced investor protections, increased access to credit, eased tax burdens, and expedited trade while reducing costs. This wave of reforms has swept through Madagascar, where business start-up has been reduced to seven days by eliminating five procedures and streamlining operations. This, in turn, has attracted investments and promoted small private business. Fifty-four-year-old Bruno Randriamialijaona is the proud owner of Madagascar’s first and only laundry in its main tourist area Nosy Be. In February 2006, Bruno and his wife Brigitte decided he would take early retirement from the bank where he had worked for 33 years to start their laundry, Classic Clean. Elma Ross, president of Nosy Be’s Tourism Board, explains how novel an idea it was: “The expansion of international tourism creates real business opportunities in Nosy Be, and international-standard hotels and restaurants definitely need professional laundry services,” she said. But the business idea was enmeshed with the usual difficulties in doing business in Africa. In 2006, the same year Randriamialijaona opted to start his business, the World Bank’s Doing Business report ranked Madagascar 149 th out of 175 in the ease of doing business, and 159th in access to credit. Classic Clean’s solution came through the Malagasy Government’s US$129.8 million Integrated Growth Poles project (IGP), financed by The World Bank Group. The project aims to provide the adequate business environment to stimulate and lead economic growth, and to allow Malagasy firms to play a greater role in the economy. As part of its activities in Nosy Be, the IGP project set-up the Partial Portfolio Guarantee (PPG)program in collaboration with the IFC and two local banks. The project supports 50 percent of the guarantee needed for a loan from the banks. As one of the beneficiaries in Nosy Be, Randriamialijaona took out two loans through the program. Classic Clean now employs 13 people, and takes care of 1,000 pieces of laundry each day, with clients including hotels and restaurants in the Nosy Be area. “I am really proud to show that small-scale formal Malagasy enterprises can take risks to build their capacity in providing professional services,” Randriamialijaona said. The Business Uganda Development Scheme There are numerous other success stories emerging from African entrepreneurs, who have proved that with a little financial push and an enabling business environment much can be achieved in promoting private investment and closing the poverty gap in Africa. SAMEG Chemical Products, the first company to produce wide-ranging cleaning detergents in Uganda. In Uganda, which positively reformed its labor law in 2007 along with several other reforms, impressive progress has been realized.The story of Samuel Rugambwa and his wife Margaret is one of the many that highlight the impact of these reforms. On return from exile in 1990, the Rugambwa’s found a struggling economy that had a limited supply of basic needs products such as soap and other cleaning agents. They exploited this niche to start producing detergents. With about US$400 in savings, they converted their residential home into SAMEG Chemical Products, the first company to produce wide-ranging cleaning detergents in Uganda. As their business expanded, they needed working capital and business advice to reach a wider market. The Rugambwa’s turned to the Business Uganda Development Scheme (BUDS) a component of the Private Sector Competitiveness Project, financed by the World Bank. The project aims to improve enterprise creation and growth of Micro, Small and Medium Enterprises (MSMEs) by raising productivity and improving the quality, standards and reliability of such producers.The company invested in three regional trade exhibitions, which opened up avenues for a bigger market. BUDS refunded 50 per cent of SAMEG’s trade exhibitions costs, allowing for reinvestment of the saved finances into expansion of their business. BUDS also provided a grant to help SAMEG improve packaging and labeling in order to make their products more competitive. Their business technological capacity was also boosted with computers and financial management packages. Today, the Rugambwas are proud owners of a successful and growing small-scale business producing a wide range of products including detergents, bleach, petroleum jelly, skin care products, shampoos, hand and shower gel. By the end of 2006 their total returns had multiplied one thousand fold from $400 to $0.25 million. “We need to increase our productivity to meet growing demand,” says Rugambwa. “We need initiatives that can help local industries especially with machinery… My appeal is to government to put protective measures for local industries against foreign products and to provide access to cheaper credit.” Nigeria and Malawi Reforms Aid Local Businesses In Nigeria, Africa’s most populous country, reforms have seen the computerization of the national company registry, the speeding up company name searches and an increase in efficiency. Entrepreneurs can now start operating a new business within 34 days and the planning authority now issues construction permits in 30 days. This has attracted investments and the return of some highly skilled persons that had fled the country for greener pastures in the developed world. In 2003, Dr. Bart Nnaji, a former federal minister of Science and Technology in Nigeria, and his partners, were competing against more experienced multinational companies to build Geometric Power Limited (GPL), an indigenous power company, which today boasts a US$250 million, 140 MW, integrated generation and distribution power plant. The challenge: a country with very poor energy infrastructure, inadequate business regulation and lack of access for undertaking business ventures of such magnitude, For GPL to take off , Nigeria’s federal government, with support from the World bank Group, developed and enacted the Electricity Act of 2005, which saw the unbundling of the state monopoly and paved the way for private sector participation in the power sector. The IFC also played an important role in guiding GPL in its development phase through the provision of financial and technical assistance. The involvement of IFC, which currently is considering a total investment of about US$60 million in a combination of equity, senior debt and quasi-equity in GPL, has encouraged investor confidence and has set GPL on a path to being one of the most prominent local companies in Nigeria. Malawi is yet another country on the move. Its ease of doing business reforms have seen the launch of the commercial division of its high court and the appointment of specialized commercial judges. This is a significant stride in Malawi’s reforms, which seek to pave the way for growth of the private sector and investment. One of the beneficiaries of these reforms is Ivy Gondwe, who with her husband has transformed a huge spread of idle land in Malawi’s capital Lilongwe into the luxurious Ufulu Gardens Hotel. “It just started with the idea of going back to Malawi, but wanting to build something there,” said Gondwe. “One day, at the dinner table, we talked about buying land and building. A friend drew a sketch, a typical American neighborhood in the suburbs. Now I am managing the business.” In 1996 when the Gondwes started their business, things were very difficult in Malawi. They were venturing into the hotel industry in which they had no experience; they had neither guidance nor information on government regulations on setting-up such a business; and had no funds beyond their savings. No local bank was willing to finance their project. The Gondwes finished their project in 1999 after getting support from the IFC. They are now expanding their premises with the addition of a 25-room hotel, restaurant, bar and conference center.

(WorldBank)

Tom Minney

ADDIS ABEBA, Sep 27 (IPS) - Behind the media headlines about China’s scramble into Africa, new trends are emerging of far-reaching involvement in finance, infrastructure and manufacturing. A two-way engagement even sees African lessons shaping Chinese foreign policy.

This is the argument presented by researchers from the South African Institute of International Affairs (SAIIA), a foreign policy think tank. They were hosted by the African Union’s Department of Economic Affairs in Addis Abeba, Ethiopia, on Sep. 8, to present their ongoing China in Africa project.

”We’re at the end of the beginning of the Chinese surge into Africa,” said team leader Chris Alden of the London School of Economics and Political Science. ”China is diversifying its investments and changing its policies. It is developing a sustainable engagement.”

Alden said media headlines describe China as ”leading the charge” in a recent investment surge into Africa, under a ”no conditions” aid and investment policy and welcomed by Africans rebelling against Western donors who link aid to democracy and governance conditions.

China’s arrival is backed by deep financial pockets and a history of strong support for African independence. It has rapidly become a significant player in resources, especially in oil-rich Angola, Sudan and Nigeria, is Africa’s leading infrastructure lender and is in the forefront of two-way trade.

Chinese construction firms are turning to Africa as China’s domestic construction slows. Projects are often linked to access to Africa’s rich resources but, once established, Chinese firms also compete in the local market. Researcher Isaac Idun-Arkhurst, of the UK’s Cambridge University, said China’s growing aid programme to Ghana includes the 600 million dollar Bui Dam on the Black Volta River.

China’s Sino Hydro is building it and China’s ExIm bank is financing it, backed by cocoa revenues. Sino Hydro has since won contracts on four more hydro-electric projects, some backed by international finance consortia.

Chinese manufacturing in Africa is a change in a market used to deadly competition from cheap Chinese imports. In October 2007, Beijing’s Tianpu Xianxing Enterprises and Kenya’s Electrogen Technologies started building the first solar panel factory in Eastern Africa, in a 125 million dollar joint venture. The plant highlights China’s new role in creating local employment, technology transfer and a lasting partnership.

SAIIA’s Tsidiso Disenyana said solar energy is growing fast in Kenya, particularly in rural areas affected by poor transmission and distribution infrastructure. Some 200,000-350,000 photovoltaic systems are in use, demonstrating that solar power is viable even for poor households in an unsubsidized market. The new plant could bring the cost of panels down by 40 percent, ensure faster take-up of solar energy and be replicated elsewhere in Africa.

Chinese banks are entering emerging banking and capital markets just as the West is reeling and likely to focus on rebuilding at home, said SAIIA financial consultant Riaan Meyer. Chinese banks have little exposure to the ”toxic products” that are crippling Western banks.

”China has a unique problem — it has too much cash,” he said. Acquisition is one route into new markets, such as the Industrial and Commercial Bank of China’s 5.5 billion dollar investment for 20 percent of South Africa’s Standard Bank in October 2007; that purchase brings ICBC good banking systems and a presence in 18 African countries and London. More mergers and acquisitions could follow.

Chinese banks are increasing trade finance and following Chinese businesses into Africa by setting up corporate and retail banking services and expanding branch networks. The China-Africa Development Fund, set to grow to 5 billion dollars, is funded by the China Development Bank and China ExIm Bank. It signed its first four deals with Chinese companies in January 2008 for infrastructure and housing projects.

In project finance, Sonangol-Sinopec International, a joint venture between Angola’s state oil company and a Chinese refiner, successfully bid a record 1.1 billion dollars for oil bloc 18 off Angola’s coastline. The deal was opened to Western banks to help finance what one magazine termed African oil and gas ”deal of the year”.

Elaborating on China’s policy after the presentation, Zhang Yeubang, Counselor at the Chinese Embassy in Addis Abeba, said China’s cooperation with Africa follows principles of mutual respect, believing that countries should respect each other’s ”dignity” and work on the basis of equality and mutual benefit. He said China had also experienced bullying.

On competition, he explained: ”We have developed our technology and skills in the past decades — we have the most railways, the longest bridges and the biggest dams. We have a workforce that can stand up to hardships”.

Summing up, Alden said China is proving ”the catalyst for African development”, but must calm disquiet. On the positive side is the substantial hard infrastructure, including roads, railroads and hydro-electric dams, where the skills and overcapacity of China’s construction sector means mutual benefit from the interaction. Local manufacturing, banking and a willingness to open projects for Western and other financing and support show China’s evolving role.

On the negative side is ”de-industrialisation” as Chinese imports destroy local manufacturers. Other concerns include that Chinese aid is tied to using Chinese firms and doubts about whether local contractors have capacity to take up their smaller share of projects.

In some countries, infrastructure projects are run by the Chinese embassies and handed over when complete. There is concern whether project supervision is adequate to ensure Chinese companies deliver to their potential. While state-owned companies are getting better at governance, private Chinese firms have a reputation for exporting ”worst practice”.

On the political front, China is learning fast from its involvement in Africa. Popular activism about Darfur dented China’s image-building around the Olympic Games. Resource firms worry their massive investments will be subject to the fortunes of unstable regimes. China may soon find its interests aligning with those of other superpowers.

Problems such as sole sourcing, corruption and environment are not limited to the Chinese and many of Africa’s previous partners are also guilty. Controlling them requires effective regulatory regimes and civil society, says Alden, and getting the best of the new partnership could ”come down to African governance”.

(globalnewsblog)

On September 27, the conference of “China-Africa economic trade and cooperation-how to open up African market” was held in Beijing. It was organized by Chinese-African People Friendship Association and Chinese Research Society of African Issues.

Abdul’ahat Abdulrixit, vice chairman of National Committee and president of Chinese-African People Friendship Association, attended and addressed on the conference.

He said that China-Africa Cooperation Forum marked a new epoch of cooperation between China and Africa, and promoted the trade cooperation to enter a new era of rapid development. In recent years, the total value of trade between China and Africa increased nearly 40% every year. Now, the cooperation has been in the phase of all-dimensional, multi-level and wide-ranging development.

He also mentioned that the economics of two sides have great complementarity and cooperation potential. It is helpful for promoting the Chinese-African relationship to a new level to practice the effects of China-Africa Cooperation Forum Beijing Summit.

By People’s Daily Online

China on Friday provided 1 million U.S. dollars and another 2 million dollars worth of building materials to Kenya to help the country recover from the consequences of the post-election riots.

“The Chinese government and its people are very sympathetic to the tens of thousands of Kenyans rendered homeless in the riots,” Chinese ambassador Zhang Ming said, noting that China has provided humanitarian aid to the East African country soon after the riots flared up in January.

To show its support to the Kenyan coalition government, which has done a great deal in restoring social economic order and resettling refugees, China has decided to send this new batch of aid to Kenya, the ambassador said during a meeting with Kenyan Finance Minister John Michuki.

Michuki expressed his gratitude to China, saying the donation would further strengthen the friendship between the peoples of the two countries.

Disputes over the result of the December general election triggered widespread riots and ethnic violence that killed at least 1,200 people in Kenya. More than 300,000 others were displaced.

With the mediation efforts by the African Union, the two major political parties in Kenya agreed to a power-sharing deal and formed a coalition government in mid-April.

(xinhuanet)

The oil-rich African nation of Angola and China plan to start direct flights between their capitals next month, the state-run Jornal de Angola reported.

Under the deal signed Thursday in Beijing, Angola’s state-run TAAG airline and Chinese carriers will begin flying from Luanda to Beijing and the southern Chinese city of Guangzhou, the paper said.

“Initially TAAG chose to fly to two cities, Beijing and Guangzhou,” the airline’s vice commercial director Jacinto Junior said in the paper.

He added the airline was waiting for Chinese authorities to allocate timetables and airspace for the flights.

“The profitability of the route is proven, given the number of Chinese companies operating in Angola under the national reconstruction program,” he said.

State-run radio RNA reported earlier this week that China’s Hainan Airlines and Oriental Sky Aviation were set to win contracts to fly into Luanda.

Angola’s airlines were banned last year from flying to the European Union over safety concerns.

(quamnet)