Risky Business: Is China Wavering in Africa?

South Africa’s president arrives in Beijing for a Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC). Photograph by GovernmentZA.

Chinese companies and banks were once seen as bold and fearless as they invested in countries Western investors deemed too risky. But this may now be changing.

By Jacob Kushner

In 2007, when two Chinese state-owned companies struck a deal with the Congolese government to build the biggest mine the country had ever seen, all involved were riding high. In a mega-deal originally worth some $9 billion, Sinohydro and the China Railway Engineering Corporation (CREC) would gain access to 6.8 million metric tons of copper, the future profits of which were to underwrite the prior building of hospitals, roads and other infrastructure.
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At the time, the China’s involvement in Africa was booming and the Sicomines deal embodied much that was symptomatic of Sino-African relations: it was massive-scale, involved vast infrastructural construction linked with similarly vast mineral resources, and was taking place in a country many other investors would have deemed too unstable.

It was not long, however, before confidence in the deal began to wane, especially amongst the deal’s financiers, China’s Export-Import Bank (Exim).

Read the full article at Think Africa Press.

African Influence (interview)

This segment appeared on CUNY’s Independent Sources with Gary Pierre-Pierre in December, 2013.

RADIO: BBC World Service on “China’s Congo Plan”

China’s economic rise in Africa has brought a whole army of managers and engineers to the continent. Many of them have come with state-owned companies to extract minerals and build infrastructure. One example where this is happening is the Democratic Republic of Congo. Newsday has spoken to journalist Jacob Kushner who travelled around the country meeting different communities of Chinese immigrants for his book “China’s Congo Plan”

 

Listen to the interview at BBC World Service Newsday.

Corruption in the Congo: How China Learnt from the West

To single out Chinese companies for entering into shady business in the DRC is to miss a fundamental point: Western firms have been at it for centuries, and still are.

Last January I was in the Democratic Republic of Congo (DRC) to research Sicomines, China’s controversial $6.5 billion megadeal in which Chinese companies will construct roads, schools and hospitals in exchange for mining and untold billions of dollars worth of copper and cobalt with Congo’s state mining agency.

On a sunny morning in the south-eastern mining city of Lubumbashi, I called a Congolese official to pose some hard questions about the deal – particularly, what happened to the $350 million ‘signing bonus’ that was handed over by the Chinese. But I hardly got a word in before his response betrayed his fear as to the more sensitive concern on his mind: “Is this about COMIDE?”

It wasn’t, of course. But perhaps it should have been, because the corruption scandal that burns hottest among Congolese officials today has nothing to do with the Chinese. In 2009, the International Monetary Fund started a $551 million loan to improve the DRC’s business climate through a series of projects. As a condition of the loan, Congo’s government would have to make all its mining contracts and transactions public.

So it must have come as a surprise to the IMF when Bloomberg revealed the DRC had sold its 25% stake in a copper mining venture called COMIDE SPRL – a trade the Congolese government hadn’t disclosed. The IMF responded to the news by refusing to renew the loan, meaning the DRC will essentially forfeit an incredible $225 million because a few Congolese officials didn’t want the world to know what they were up to.

Read the full story as it appeared at Think Africa Press. 

As Africa welcomes more Chinese migrants, a new wariness sets in

As Africa welcomes more Chinese migrants, a new wariness sets in

In Congo, Chinese are settling in with businesses and bargains that locals love. At one copper smelting plant, Chinese and locals work together but live apart.

LUBUMBASHI, CONGO — Some 6,000 miles away from his home in China, Robin Wei awakes on a cot beneath a white mosquito net. He gets dressed, opens the door of his bunker, and walks out into the rainy season toward the factory where he works.

Four years ago, Mr. Wei bade goodbye to his wife and daughter in Shanghai and boarded a flight to the heart of Congo’s mineral belt. He lives and works at a Chinese-owned smelting plant that extracts copper from the rich ore, which is then sold for wire and pipes that go into building skyscrapers and cargo ships.

Congo also holds nearly half the world’s known reserves of cobalt. It has vast reserves of high-grade copper, tantalum, and tin. Just 10 years ago, a ton of copper could fetch $1,700 on the world market. Today it goes for about $8,000.

Wei is one of hundreds of thousands of Chinese men and women – as many as 1 million by some estimates – who, at least for now, call Africa home. (Wei goes home to visit his wife and daughter once a year.) China has been investing heavily in Africa for more than a decade, and both China and its migrants are in what could be called a settling-in period as the story of a fast-growing Africa and a rising China unfolds.

Read the full story as it appeared at the Christian Science Monitor. This story was adapted from the new e-book China’s Congo Plan.

eBook: China’s Congo Plan, now available

 

 

 

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What does China see in the world’s poorest nation? An opportunity for big business. Congo is known for poverty and conflict, but it is home to an enormous wealth of buried minerals such as copper, whose value is rising on the world market. Already, tens of thousands of Chinese men and women have left their families behind to live in Africa to dig and process ore.

Now, two Chinese state-owned companies are opening the biggest mine Congo has ever seen. In exchange, they’re spending billions of dollars to build new roads and modernize Congo’s infrastructure.

But will Chinese mines and roads help transform Congo in a way Western aid and business has not? Or will Chinese businessmen and Congolese officials get rich while the people continue to live in poverty?

In “China’s Congo Plan”, Jacob Kushner takes us street-side to a grand, Chinese-constructed boulevard in Congo’s capital Kinshasa, to a mountain range where Congolese men, women and children dig for minerals with picks and shovels, and to a factory where Chinese immigrants melt aqua-blue rocks into molten copper lava. Two years after China overtook the United States as Africa’s largest trading partner, Kushner brings us inside the world of China’s rise in the continent.

Kushner’s reporting was supported by the Pulitzer Center on Crisis Reporting, and his research was advised by faculty at the Columbia University Graduate School of Journalism. “China’s Congo Plan” was awarded the Grand Prize in the Atavist Digital Storymakers Award for Graduate Longform, sponsored by the Pearson Foundation.

PHOTO: Congo’s subsistence miners

VIDEO: Jacob Kushner on Income Inequality in Congo

Video produced by Emily Judem for GlobalPost.