"Am I therefore become your enemy,because I TELL YOU THE TRUTH...?"
(Galatians 4:16)

China digs deeper into Africa

Johannesburg - China has served notice it is accelerating its investment drive in Africa towards full throttle with the planned $5.6bn cash purchase of a major stake in Standard Bank by Beijing's biggest lender.China's ICBC bank said on Thursday it is to buy 20% of South Africa's Standard Bank, the biggest foreign acquisition by a Chinese commercial bank yet.So far, China has focused its African ventures on mining companies as well as oil to feed its exploding economy.The planned acquisition - which will also be the largest foreign investment in Africa - leaves no doubt that China has bigger things in mind."It opens our eyes to the fact that China's strategy is about more than state-owned mining companies. A big investment in a major South African financial institution in Africa is a step up," said Philip Alves, an economist at The South African Institute of International Affairs (SAIIA).ICBC's stake in Standard Bank will give it sustained leverage to penetrate financial networks in South Africa - the continent's biggest economy - as Beijing pushes major state firms to expand abroad, particularly in developing countries.
Benefits will flow both ways
Johannesburg-based Standard Bank operates in 18 African countries, including South Africa, and 21 other countries across the world.Benefits will flow both ways, an idea that China has been pushing as it expands its economic base in Africa.Standard Bank will gain access to the world's fastest-growing economy, boost its capital base and its ability to finance trade flows between Africa and Asia, Standard Bank chief executive officer Jacko Maree said.China's relentless investment offensive in Africa has been welcomed by impoverished countries. But it has drawn fire from Western nations and aid groups, who accuse Beijing of turning a blind eye to misrule, corruption and human rights abuses.China argues it is spreading prosperity in the world's poorest continent where the West has failed."Their engagement with Africa is not dominated by this discussion of how to transform the continent. They are willing to deal with Africa on its own terms and that has been very successful for them," said Chris Alden, director of the China in Africa research project at SAIIA.
Pump cash, avoid politics
China's tactics in Africa have been straightforward: hotly pursue commercial deals and try to avoid politics.It has demonstrated skills in manoeuvring around political minefields in countries such as Sudan, where critics allege its military aid and oil investment has fuelled the Darfur conflict.Investing has proven risky on the ground. Rebels in Ethiopia killed nine Chinese workers in a raid on an oil installation in April.A Darfur rebel group which said it attacked Sudan's Defra oil field on Tuesday - killing 20 government soldiers and taking two foreign hostages - described the assault as a message to China. Sudan's government denied any such attack, though China's embassy in Khartoum confirmed it.China's CNPC has the biggest stake in the group that runs the field, alongside India's ONGC.But a steady flow of big deals since President Hu Jintao announced a drive to boost relations with Africa in 2004 suggests rewards may outweigh risks in the foreseeable future.
'Why should China not be good for Africa?'
Chinese loans, donations and debt relief have been made along the way.Some African government officials wonder why countries like the United States invest in China while questioning the country's record in Africa."The Chinese investments are not tied to too much (political or economic) analysis compared with the West, they move quickly," Zambian Commerce and Trade Minister Felix Mutati told Reuters."If China is good for the West, why should it not be good for Africa? We want to harvest the same benefits the West is getting from China," he said.Lack of transparency from Beijing on details of its investments and aid in Africa has also alarmed Western donors, who have watched China become a player in countries such as oil-rich Angola, where Chinese credit is believed to be between $4bn and $11bn."Angolans will probably generally like it. It helps to a degree to alleviate the international pressure regarding the Angolan government arranging its finance facilities from China," said a banker in the Angolan capital Luanda."After all, if the scion of South African banking in sub-Saharan Africa takes on a major Chinese bank as 20% investor, that sort of gives the good housekeeping seal of approval to the Chinese in Africa."

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