03-06 Africa

It would not be hard to declare China’s strategic interest in Africa as being oil. After all, China is the world’s largest consumer of energy. And in terms of major exporters of energy in Africa we are looking at Nigeria, Angola, Algeria, Egypt and Libya. The photo shows a Chinese investment in crude oil production.
But the more you study the Chinese interests in Africa, the more you begin to see a pattern that is pure China. Investments in infrastructure that facilitate the export of resources and the import of Chinese products.
But, more importantly, investments made quickly compared to western investments because the Chinese do not worry about the environment, the rule of law or issues of corruption.
And something else I am learning about Chinese investment in Africa or in any developing region of the world. They cleverly combine investment in infrastructure loans designed to facilitate trade, with investments in the form of aid designed to improve the lives of the poor.
My recent visit to Grenada was instructional. Loans were made to facilitate trade like roads and ports, as well as aid to fund a sporting complex. The locals love China. It’s a trade and aid formulae.
I remember my basic course in geology as an engineering student. And discovering Africa as a major source of the resources necessary to fund industrial expansion. We all know about Africa’s gold and diamond reserves, but we also have Africa as a major supplier of uranium, platinum, nickel, bauxite and cobalt.
The attached map gives an indication of the scope of the Chinese investments underway in Africa. Something like $60 billion in planned infrastructure investments. Its all about railways, hydroelectric power dams, copper mines and cement plants.
The Chinese strategy behind its foreign investment is not unlike foreign direct investments made by all the major powers. It all starts with state investments which encourages private investment. Then this opens the door to trade, followed by tourism. And it is tourism spending which reaches the street level. Tours, souvenirs, hotels, restaurants and that sort of thing.
The Chinese are also strategically investing in areas of manufacturing like clothing where Chinese labour costs are too high.
I admire the Chinese. They have a clear goal to surpass the US as the dominant power in the world, and yet they are doing it so stealthily that Americans do not know it is happening.
The cold war with Russia was competition out in the open. It was about space and the military. But Russia is a nation that cannot produce quality goods that everyday Russia needs. And with a rapidly shrinking population, it is a declining power.
During our visit in 1987, we were amused that they could not even make a door in a so-called four-star hotel. Our hotel room door was not square, so the light came in from across the top.
In China everything they make and sell is of high quality. And as a growing world power, they are using their great wealth to put the majority of the nations of the world in their debt.
Oh, by the way, China is also America’s biggest banker, and the US debt to China is something like a trillion dollars.