Arguably the most revealing English translation of the French verb ‘étonner’ – at least in the context of Napoleon’s famous quip about China – is ‘to astonish’. “Ici repose un géant endormi, laissez le dormir, car quand il s’éveillera, il étonnera le monde” so the Corsican is said to have noted. “Here lies a sleeping giant, let him sleep, for when he wakes, he will astonish the world.”
Some 200 years later, that giant has awoken and Napoleon was right: China is now astonishing the world. In the past three decades, it has roused itself from a slumber to a state of almost unimaginable vibrancy. The roll-call of economic trophies it now claims is daunting: largest exporter, importer, foreign exchange reserve owner, commodity consumer, luxury goods market, most car sales, most internet users, even (in purchasing power parity terms) biggest economy. Read more
The decision of several European countries to join the China-inspired Asian Infrastructure Investment Bank has created a widely believed narrative as follows. Beijing, frustrated by its exclusion from the centres of power in existing international economic institutions, creates its own. The accession of the UK to the bank, followed by (to date) five other European countries, is a powerful testament to China’s role as a rising hegemon.
This narrative is not wrong, but is far from the whole story. First, China’s decision to bypass multilateral institutions and go it alone with development lending was hardly forced on it. Second, Beijing’s willingness to allow western nations to join the AIIB is also an admission that its bilateral efforts have often not worked well. Read more
By Ryan Olson, The Heritage Foundation
For several years, now, Sub-Saharan Africa’s largest oil producing states have been working to create sovereign wealth funds (SWFs). But as oil prices and production decline, such funds may not be able to deliver the benefits they once promised.
Since 2007 Angola, Ghana, Nigeria and Mauritania have joined Equatorial Guinea and Gabon in the club of oil-producing countries with SWFs. Currently, four of sub-Saharan Africa’s five largest oil producers maintain some sort of SWF.
Attracted, perhaps, by the success of similar funds in the Middle East and North Africa (MENA) region, sub-Saharan governments are looking to capture oil revenues in rainy day funds in order to smooth fiscal expenditures during suppressed commodity cycles. Read more
By David Humphrey, Standard Bank Group
Sitting around a fire in the middle of the Namib Desert, western tourists can sample the twin delights of African cuisine and its staggeringly beautiful night sky. The Milky Way is a vibrant arc of white, the stars five times brighter than in Europe. It is one of the few places in the world where light pollution does not exist, which is another way of saying most of Africa lacks power.
Africa’s population of roughly 1bn people accounts for over a sixth of the world’s population, yet it generates just 4 per cent of global electricity supply. Excluding South Africa, the continent’s most advanced economy, the entire installed generation capacity of sub-Saharan Africa (SSA) is only 28 gigawatts, roughly equivalent to that of Argentina. The result is that just 24 per cent of the population of SSA has access to electricity compared to 40 per cent for other low income regions. Read more
Following a decade in which Chinese largesse has helped to transform Africa’s prospects – and challenged the supremacy that western companies once enjoyed over the continent’s natural resources – Beijing has sent word to Washington that the world’s two biggest economies might combine their efforts to generate some much-needed electricity in one of the poorest.
The Democratic Republic of Congo, an expanse the size of western Europe that perennially ranks among the worst countries in which to do business, has known little but conflict and penury for decades. World Bank-backed plans to build a third dam at Inga are part of a broader vision for a dam complex capable of generating 40,000MW – twice the size of the Three Gorges dam in China. Read more
Nearly fifty African heads of state are due to kick off the first U.S.-Africa leaders’ summit in Washington DC today. Over the last two decades, Africa has made great gains in global economic integration and poverty reduction. Its importance as a trading partner is likely to grow in the future. American leaders should keep that in mind and help to forge a relationship between the United States and Africa that focuses on mutual gains from trade, not aid.
Sub-Saharan Africa, a region once synonymous with war, poverty and mismanagement, is back in the news as one of new millennium’s success stories. Since 2000, growth has hovered around 5 per cent per year, increasing the average per capita income by 32 per cent.
Africa’s improving economic performance is partly attributable to the high price of commodities and partly due to the continent’s economic liberalisation. At the end of the Cold War, for example, Africa’s rating was 4.71 out of ten on the Fraser Institute’s Economic Freedom of the World index. By 2011, the data from the Canadian think-tank shows, it grew to 6.12. Read more
For Chinese, Africa is the new El Dorado. An estimated 1m Chinese have moved to Africa in the last two decades in pursuit of a more prosperous life. They are opening shops, buying land, and exploiting mines. But how welcome are the Chinese in Africa? And is their arrival a force for good?
Looking for answers to these timely questions, Howard French, a former Shanghai bureau chief of the New York Times, undertook a grand voyage through the African continent. He met with a diverse array of Chinese merchants, entrepreneurs and business men and asked them about their practices, methods, and outcomes. Read more
China Kingho Energy Group, one of China’s largest privately owned energy groups, remains optimistic it can make progress on a US$6bn-10bn Sierra Leone iron ore mining project as early as next year in spite of China’s slumping appetite for the metal ore.
“The difficulties we have faced so far are the macro-economic and market conditions,” said James Chang, director of external affairs in the Kingho chairman’s office told beyondbrics. Read more
After a decade-long resource push into Africa, the Chinese government is still struggling with an image problem.
The accusations come thick and fast: Chinese foremen overwork or abuse their labourers, immigrants are guilty of poaching and illegal mining, and merchants are undercutting local traders as they flood markets with cheap goods. As economic and diplomatic ties between China and Africa go from strength to strength, something’s still missing in the realm of cross-cultural relations.
China is not known for its moral scruples or sensitivity when it comes to investing in dangerous countries. It may help to build schools, hospitals and railways as a quid pro quo for getting access, but what it mostly seems to want is to get in and out with its raw materials and without interfering in local politics.
Erik Prince and China could be made for each other. The former Navy Seal who founded the hugely controversial private security group Blackwater is pitching to run logistics for Chinese mining and energy companies in Africa. Read more
The IMF may have outlined the risks to sub-Saharan Africa from tighter monetary policy in the US and other shocks (read the FT’s Javier Blas for the full story) – but as the report makes clear, it’s not just the US that has an impact on Africa’s fortunes.
There’s China too, of course. In a section titled Africa’s Rising Exposure to China: How Large Are Spillovers through Trade?, the Fund looks to quantify and group the countries most exposed to a China slowdown. Read more
By Andrew Brown of Emerging Capital Partners
Last week the International Monetary Fund (IMF) predicted a further drop in China’s growth to 7.3 per cent in 2014, the lowest figure that the country has experienced in the last 23 years.
China’s continued economic slowdown as it shifts from export-led to consumer-driven growth has prompted speculation as to the knock-on effect on economies that have benefited from China’s rise. Debate has centred on whether many frontier economies, including those of sub-Saharan Africa, are reliant on continued rapid growth in China’s demand for commodities to drive their own economic development. Read more
When it comes to natural resources in Africa, coverage tends to focus on the problematic (see Rio in Mozambique), the awkward relationships (see China), the political risk (see Congo) and the collapse in labour relations (see South Africa).
But despite the setbacks, Africa still has vast untapped reserves and lots of potential. So what should investors look out for in the next few years? Research from Ecobank has identified six themes. Read more
Much has been written about China in Africa – a relationship that has been described as neo-colonial as China’s appetite for African resources has boomed and China has embarked on landmark projects such as the headquarters of the African Union in Addis Ababa (pictured left).
But quantifying the China-in-Africa story has been hard. There are official projects, aid donations, gifts, credit lines and more. Adding all that up is tricky – but a new database from AidData shows just how vast and sprawling Chinese investment in Africa has become. Chart of the week has run the numbers. Read more
The China-Africa debate is never far away. Lamido Sanusi, governor of Nigeria’s central bank, recently wrote in the FT of a whiff of colonialism. Much has been said about the two countries’ unequal relationship, based on China’s supposedly insatiable desire for African raw materials and for control of its mining assets.
But perhaps a bigger problem is not China’s dominance but China’s slowdown. What happens when the country doesn’t want so many of Africa’s exports? That moment may be coming sooner than you think. Read more
The railway linking Lagos, Nigeria’s commercial capital, to Kano, the country’s second largest city, has reopened after more than 10 years thanks to Chinese loans and investment. Xan Rice, the FT’s West Africa correspondent, makes the 31-hour journey and asks whether the train line is a sign of progress in Africa’s second biggest economy.
Leading Africans are finally getting tough with China. They are becoming increasingly concerned that economic engagement with China comes at a price – and that the price is sometimes too high.
The latest to speak out is Lamido Sanusi, Nigeria’s central bank governor, who warned on Monday in an FT guest column that China takes Africa’s primary goods and sells manufactured ones and says: “This was also the essence of colonialism.”
He could hardly be clearer. Read more
Zambia announced on Wednesday that it had revoked the licences for a controversial Chinese-owned coal mine in the south of the country in response to violations of safety and environmental laws and a failure to pay mineral royalties.
Mining minister Yamfwa Mukanga said the government had taken over the mines and would operate them “until a suitable investor is found”. The decision highlights the sometimes troubled relationship between China and Zambia. Read more
Is the honeymoon of the unofficial Africa-China wedding over?
Last week, the Nigerian Central Bank voiced its discontent about the unfavorable trade balance with China – and made it clear Nigeria was already looking elsewhere for friendship (and maybe more). Read more
To date, the story of China’s growing presence in Africa has been mostly narrated by western media, African newspapers, and a universe of blogs, websites and social media outlets. Often, it is framed in the context of land-grabbing, resource-snatching, neocolonialism and invasion.
So perhaps a different perspective might be provided by China Daily? The state-run paper is launching a weekly Africa edition, and is keen to put its side of the story. Read more