Hungarian radio reported that the government’s spokesman said it was “not a secret” that Hungary wanted to become the regional hub for Chinese railway construction. Negotiations were underway with the Chinese and Serbian governments to upgrade the Budapest-Belgrade railway at a cost of $3 million.
In the last year, regulatory challenges against Chinese companies in Africa have become increasingly commonplace, part of what seems to be a trend of greater African state assertiveness in dictating the terms of business with China as well as a more open competition between Chinese companies. In telecommunications alone, Chinese companies have faced investigations over corruption related to telecom tenders in Kenya, Uganda, Nigeria and Algeria, with both ZTE and Huawei being banned from tenders for two years in Algeria as a result,.
Nonetheless, the fact a $218 million telecom tender awarded Huawei to supply equipment to Zimbabwe’s state-owned telecoms operator NetOne has been challenged in an administrative court with allegations of corruption is significant because it questions the assumption that large Chinese companies do well in undemocratic states politically allied with China by integrating into the patronage networks of the ruling elite.
Today, at the workshop “Fifty Years of China-Africa Cooperation,” held in Harare with FOCAC funding and organised by the Southern African Research and Documentation Centre, Zeng Aiping of the China Institute of International Studies, the Foreign Ministry’s think tank, gave a talk on how Africa can learn from China’s development experience. In addition to the usual discussion of agriculture, industry, opening up to foreign investment etc., he foregrounded social stability and the leadership of the Communisty Party, and suggested that African parties, especially ruling parties, can learn from the CCP’s experience in party building, party-state-society relations, and party-military relations.
There has been much discussion of whether China actually wants to export its political model to poor countries in Africa and Southeast Asia; i.e. whether it is consciously strengthening authoritarian regimes or whether this is an unintended by-product to which the Chinese government is largely indifferent but is sometimes forced to become sensitive to, as in the case of Burma. Most people, including myself, hold the latter opinion, but this talk makes me wonder whether at least some parts of the Chinese political establishment are in fact in the former camp.
The symposium’s main organiser, Phyllis Johnson, a long-time Mugabe supporter who blames the country’s problems on Western interference, also pointed in her talk to China’s National People’s Congress as a model of decision making, and specifically suggested that Zimbabwe should learn from China’s approach to having the military under Party control but still allowing it to play a political role.
Just had an interesting conversation with a white Zimbabwean shipping manager in Harare. He told me some of the white farmers who were thrown off their farms by Mugabe in 2002 have come back and are planting tobacco under contract for Chinese companies, which provide seeds and technical support. Would be interesting to know if anyone has done any reserach on this.
As PKU African Tele-Info reports this week (issue 159), the new Ethiopian president, Mulatu Teshome, an Oromo, has a PhD in international relations from Peking University, a department best known for the assertive nationalist Yan Xuetong. This must be the first African head of state — though ceremonial — trained in China.
The 49-year-old general manager of Suzhou Orient Investment, based in Wujiang, a district of Suzhou, is investing $10 million (7.5 million euros) in a factory on the Eastern Industrial Zone in Addis Ababa, making headdresses for both Muslim men and women.
The company is taking advantage of a seven-year duty free period and will eventually employ 200 people on site. The investment came as a result of meeting Africa officials at a China-Africa forum in Suzhou last year.
“We will be closer to our key markets in the Middle East such as Dubai, Qatar, Yemen, Egypt, Iraq, Iran and Sudan,” he says.
Some 70 percent of Muslim headwear globally is now made in Wujiang, near where a number of chemical substances required in their manufacture are located. The company intends to use its new Addis Ababa base as springboard to operate in 20 other African countries over the coming few years.
“We were the first to introduce headdress making techniques here and the district has since become a major global production center for them,” he says.
So not only is Suzhou the global centre of “Muslim headdress” (kefiya?) manufacturing, but it will now outsource to Ethiopia! In some ways, Chinese globalisation progresses faster than I could think.
“China Finds Resistance to Oil Deals in Africa” by Adam Nossiter is in today’s New York Times. The article says that governments in Chad, Niger, and Gabon have all either shut down, taken back, or imposed major penalties against Chinese oil projects, and that this seems to represent a turn towards greater assertiveness in Chinese-African investment relations. This in itself is not particularly surprising and indeed fits with what some Chinese politicians and commentators have been saying, namely that African governments should take greater responsibility for regulating investments in ways that benefit their countries. It also makes sense that with some investments already in place and incomes (including those of oil ministers) growing, they would begin fighting for better deals.
What caught my attentions are two claims: First, that Chad expelled the GM of an (unspecified) Chinese oil company’s local operations in response to environmental violations — this seems a highly unusual and very face-damaging step for China. Second, that one of the points of contention in Niger is that a refinery built by CNPC and jointly owned with Niger has been overcharging the Niger side, particularly for a bloated and “benefits-freighted” payroll of Chinese employees. Now this is interesting because one would usually think that the relatively low salaries and modest living conditions of Chinese expats distinguish them favourably from Westerners, at least from the perspective of locals.
On the face of it, it may simply be that Chinese big oil is becoming (or has always been) much the same as any other big oil, but I am curious about the inside story in these two cases. Can there be a connection to the arrest of several CNPC executives in the current anti-graft crackdown in China?