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June 1, 2015

China-Africa in the news: S Africa’s visa laws, mines and medicine in Congo, ivory, Huawei, Ethiopia's slow reforms

Two months ago, the Southern African Tourism Services Association (Satsa) said anxiety about South Africa's new visa regulations was keeping tourists away, especially those from the key markets of China and India. However, those regulations were yet to take effect, and the fall in tourist numbers last year could as well be attributed to concern about the Ebola outbreak in West Africa (Africa is not a country, but not everyone knows that).

Today, with the regulations coming into effect on 1 June, there is more panic as to how the key markets will respond. Already, there is an indication from China. Air China delayed the launch of a direct flight from Beijing to China, cancelling "slots for the season running from August 31 to October 23." Reports say the airline is afraid it won't attract passengers to the flight, some of whom are having second thoughts visiting South Africa in the wake of April's xenophobic violence; the "onerous visa regulations" are also apparently deterring some.

Research commissioned by the Board of Representatives of Airlines in South Africa (Barsa) estimates that bookings on South Africa-destined flights will fall by 20% as a result of the regulations. Barsa says demand from China and India is already down due to the new visa regulations.

DR Congo evaluates China contracts. The government in the Democratic Republic of Congo is bringing in the World Bank and the United Nations to assess contracts worth $6.7 billion signed with Chinese companies. Critics say the Sicomines project was "badly negotiated," with the Chinese companies getting the better end of the deal.

And bans Chinese medicine. DR Congo's Health Ministry announced a ban on entities and practitioners offering Chinese traditional medicine. The ministry says traditional Chinese medicine falls foul of required health standards.

The single greatest measure in the fight against elephant poaching. A surprise announcement by China to phase out its domestic ivory market was greeted with optimism by wildlife campaigners, who say it will provide the greatest relief to endangered African elephant herds. A Chinese official said they "will strictly control ivory processing and trade until the commercial processing and sale of ivory and its products are eventually halted.” The big question however is when the halt will finally arrive.

The sooner China bans ivory, the better. Mozambique provides the best example as to why China should act more decisively. According to reports this week, close to half of the elephants in Mozambique were killed in the last five years by poachers. The biggest market for ivory is in Asia, especially China.

Huawei supplies Zimbabwe telco, Botswana. The state-owned NetOne received the first batch of equipment worth $280 million from Huawei Technologies to expand its mobile broadband project. The equipment is part of a loan deal signed between the Zimbabwe government and Beijing last year, in which China's Exim bank will pay Huawei for the equipment. Meanwhile, Botswana's Ministry of Foreign Affairs has installed video conferencing equipment worth $2.8 million in its offices and in the Botswana High Commission in Pretoria; the equipment was donated by the Chinese government and supplied by Huawei Technologies.

Ethiopia is not China. The Economist looks at the relationship between the Ethiopian government and China's communist party, and points out how far Ethiopia is from replicating the reforms China undertook to grow rapidly. China is also not too pleased with the bureaucracy and inefficiency of the Ethiopian government.

South Africa's biggest steel producer threatened by energy prices, Chinese imports. ArcelorMittal SA says rising energy costs, power shortages and an increase in the price of inputs are making it difficult to compete with cheap Chinese steel imports. Although iron-ore prices elsewhere are at record lows, the company is locked in a fixed-price contract with its main supplier.

Sinohydro signs MOU for power project in Rwanda. Rwanda’s Ministry of Infrastructure signed a memorandum of understanding with the Chinese firm Sinohydro to fast-track development of the Nyabarongo II power project. Nyabarongo II is a multipurpose project envisaged to cater for water supply and irrigation as well as electrical power generation, and is planned to generate 12-17 MW for the national grid.

Chinese contractor to be removed from power project in Botswana. The government is continuing with plans to annul its contract with a Chinese contractor, China National Electric Equipment Corporation (CNEEC), for failures at the newly constructed Morupule B Power Plant. The plant is reportedly failing to operate to its full capacity, resulting in power supply problems in the country.

CECC tax records in Tanzania “unclear”.  Tax records of China Engineering Construction Company (CECC), which has been awarded a contract to construct a Bank of Tanzania branch office in Mwanza in the north of the country, are “unclear,” according to the Tanzania Revenue Authority (TRA). An official with TRA said when investigations are completed “we will take them to court.” CECC also stands accused of failing to abide by Tanzania Business Registration and Licensing Agency (BRELA) regulations for failing to file annual returns.

Japan retreats from African mines, China snaps them up. A commitment by Japan two years ago to provide $2 billion to Japanese firms so they could secure natural commodities in Africa is floundering. Falling commodity prices and an unstable investment environment in African countries have forced the Japanese firms to retreat. This has benefitted China, which has acquired a number of projects on the continent.

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