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July 5, 2016

China-Africa news: Guangzhou, Congo, tighter loan conditions

We are seeking applications from Chinese journalists to participate in a practical skills and training workshop and reporting exercise in Johannesburg in October 2016. The workshop is open to Chinese print, newspaper, radio and digital journalists, including those working in China, Africa and globally. The Project will provide airfares, accommodation and related expenses, and the selected journalists will all become fellows of the Project and part of the Project’s global community.

China and East Africa’s geopolitical machinations. An intense geopolitical battle is simmering in East Africa over cross-border infrastructure. Wits China Africa Reporting Project’s Bob Wekesa traces the genesis of the intra-East-African strife, touching on the interests of China and other external players.

Kenya, Ethiopia bet on technology transfer in their railway projects. China financed the construction of Ethiopia's light railway system, and is also bankrolling the construction of Kenya's standard gauge railway - which will later be extended to Uganda. But, according to Ethiopian and Kenyan engineers, the project’s benefits go beyond ease of transportation to knowledge acquisition for the engineers and workers from their Chinese counterparts.

A pass out of poverty? Chinese motorcycles are now a common feature in every major town and market centre in Kenya. With an unemployment rate of over 50%, the Chinese motorcycles are a source of employment to thousands of young Kenyans who are dropping out of school without a chance of advancing their education and career prospects.

Brexit, China’s mocking, and impact for Africa. China does not think Brexit was a good idea. More specifically, the Chinese media and certain government officials don't. China's Finance Minister said it will "cast a shadow over the global economy," while the head of China's top planning authority said Chinese companies that had ideas of entering Britain will now "definitely wait and see." The media, on the other hand, was less diplomatic. The Global Times, which usually tells it like it is, said that in voting for an exit from the European Union, Britain was "showing a losing mindset," and that "the focus has shifted to the Pacific" because nations on the Atlantic - like Britain- are shirking their frontleader status on the global stage.

The warnings about less Chinese investments are not coming from China only. One of the more prominent Remain campaigners, billionaire Richard Branson, says some of his Chinese business partners are already pulling their investments from the country or re-evaluating whether to stay.

But whereas Chinese investors might rethink their investments in Britain, for Africa Brexit offers a different sort of challenge. The problems are short term - plunging currencies in reaction to the referendum, and a fall in the valuation of crosslisted companies - as well as long term. A slowing British economy and less trade from Britain will adversely affect Africa's bigger economies, some of which were already in trouble even before the referendum. But most countries, which are not exposed to Britain, have nothing much to worry about: "Africa is more worried about a slowdown in China, its biggest trading partner by far."

The chocolate city is no longer so sweet. China, especially Guangzhou, is no longer the Promised Land it once was for Africans. As a result, many of them are returning to Africa and "telling their compatriots not to go." Business is no longer as good as it was during the boom times following a dip in demand back home, which itself was caused by a slowdown in China's economy. For others, it’s the racism of their Chinese hosts that has them reconsidering their stay.

The link between poverty in Africa and China. According to the World Bank, "a Chinese transformation with both a growth slowdown and a rebalancing will likely have a positive impact on poverty levels in Sub-Saharan Africa. The extent varies by country, but on average, poverty is expected to decrease by approximately 4 million people, and the levels of extreme poverty are expected to decrease by half."

Third China-Africa Media Cooperation Forum held in Beijing. The forum brought together journalists, media executives and government ministers to discuss "new areas of media cooperation, promoting bilateral friendship and common development." You can read the official statement released by the African Union at the end of the forum here.

China is rethinking its lending strategy because of Venezuela. Venezuela's economy has suffered from a fall in global oil prices, forcing its president to seek more credit from China. But China, which has established a trend of giving loans that are repaid by natural resource exports, "is paying greater attention to things like fiscal stability and political risk in overseas lending." This “could complicate President Xi Jinping’s pledge to spread $60 billion in aid across Africa over the next three years."

A huge loan for Nigeria. Nigeria signed provisional agreements worth $80bn with Chinese companies to upgrade its oil and gas infrastructure. Financial Times sees this as "a sign of Beijing’s willingness to bolster Africa’s largest economy as it grapples with its worst economic crisis in decades".

Africa is missing from China's Belt and Roadmap. The roadmap has two routes: the Silk Road Economic Belt, which connects China with Central Asia, West Asia, and Europe via land; and the 21st-Century Maritime Silk Road, which links China with Southeast Asia, Middle East, and Europe via sea. Africa is missing from those two routes, which is perplexing considering the attention paid to it by China, and its potential growth in the decades to come.

Will art lead to better friendships between Africans and the Chinese? African art is the third most popular for Chinese collectors after Chinese and European contemporary art, according to auction houses in London, where most African art is sold. What does this interest hold for cultural exchanges between China and Africa, especially considering the lingering tensions between the two societies in both Africa and China?

Troubles in Congo's mining sector. The global commodities slump has hit the Democratic Republic of Congo - which relies on commodity sales for most of its foreign exchange revenue - particularly hard. Investments by mining giants have been put on hold or abandoned, leading to a drop in production. Even China, whose companies have been picking up mines in the country and are known for a long-term view, might not be enough to reverse the decline: "Chinese companies' preference for imported Chinese labour and supplies means they will contribute less to the local economy than previous big mining projects."

South Africa joins China to vote against internet freedoms. A United Nations resolution that compels member states to protect human rights on the internet was rejected by, among other countries, South Africa, Kenya, India, Russia, and China. The countries which rejected the resolution wanted four amendments to the resolution - amendments which would have weakened it. The resolution however passed, and will be adopted by the UN Human Rights Council (not that it will stop human rights abuses online by nation states).


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