Sunday, February 15, 2009

Hu tour deepens China-Africa trade, investment ties

By Tiemoko Diallo - BAMAKO, Feb 12 (Reuters)

Chinese President Hu Jintao said on Thursday he wanted to deepen Beijing's trade and investment links in Africa despite the global economic slowdown.

Hu made the comment on his arrival in Mali on the first leg of a four-nation African tour.

China's trade with Africa has shot up 10-fold since 2000, soaring 45 percent to nearly $107 billion last year alone.

China's investments in and imports from Africa are dominated by minerals and oil -- Angola is China's single biggest crude supplier -- yet Hu is visiting four countries which are not among Beijing's big sources of oil or minerals.

Crowds of people and traditional drummers greeted Hu when he touched down in Mali. Next he will travel to neighbouring Senegal, Tanzania and the Indian Ocean island of Mauritius.

"These are not classically resource-rich countries so this is a message to Africa that (China) will engage with all sorts of countries," said Patrick Smith, the editor of Africa Confidential.

"The other message is that, amid a crisis, when many Western economies are talking about cutting aid budgets, China is travelling the world talking about trade and investment."

On Friday Hu will lay the first stone of a third bridge linking the two halves of Mali's capital Bamako across the broad Niger River, which snakes through Africa's arid Sahel region.

"We will deepen economic and technical cooperation between our two governments, encourage and support cooperation between the two countries' businesses in telecommunications, agriculture and infrastructure," Hu said after meeting Mali's president.

His delegation signed various accords but their contents were not immediately available.

Chinese companies are expanding sectors such as mobile telephones as well as food and agricultural businesses, such as fisheries and sesame production in Senegal.

Tanzania and Mali are also Africa's third and fourth biggest gold miners and Senegal has a burgeoning gold and iron ore sector. China's Sinopec is looking for oil in northern Mali, while the state-owned China National Petroleum Company signed a $5 billion deal to produce oil in neighbouring Niger.


Human rights groups denounce China for failing to use its influence to end abuses in countries where it invests.

Sudan says China is working with it to head off a possible International Criminal Court arrest warrant for President Omar Hassan al-Bashir for alleged war crimes in Darfur. China, whose firms pump Sudan's oil, says a warrant would worsen instability.

Smith said Hu's four destinations reflected such concerns.

"These are more or less functioning democracies. This is to counter the accusations that they only do business with resource-rich autocracies," he said.

The global slowdown and sharp falls in world prices for oil and metals has weakened the short-term case for some of China's resource investments. In Democratic Republic of Congo dozens of mineral treatment plants, many Chinese-owned, have shut down.

Hu's visit is widely seen as a show of confidence to soothe fears that China may turn its back on its allies in Africa.

"I would read this as an effort to assure Africans of China's continuing and sustained interest in Africa despite the global economic crisis," Christopher Alden of the London School of Economics, who co-edited 'China Returns to Africa' last year.

Such a stance contrasts with some traditional investors.

"Beijing takes advantage of French weaknesses in Africa" headlined an opinion article on Hu's visit in right-leaning French daily Le Figaro this week.