The China in Africa Podcast

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China Turns up the Pressure on eSwatini to Abandon Taiwan Mar 03, 2020

Show notes

The tiny landlocked kingdom of eSwatini, formerly known as Swaziland, is now the last country in Africa to maintain diplomatic relations with Taiwan. This is a very big sticking point for the Chinese who are adamant about isolating Taiwan in Africa and elsewhere around the world.

The Taiwan issue remains highly contentious and among Beijing's so-called "red line issues" that are among its most sensitive and important in its overall foreign policy agenda. Although not an independent country, Taiwan is nonetheless a thriving democracy that still retains diplomatic ties with 15 countries around the world. China, for its part, asserts that Taiwan is a renegade province that is inseparable from the Mainland. The Taiwan-China divide remains among the most contentious geopolitical issues in Asia and considered to be among Beijing's highest foreign policy priorities.

South Africa was the last major African country to switch its diplomatic allegiance from Taipei to Beijing back in 1994. Since then, the Chinese managed to use the promise of lucrative investment contracts and massive infrastructure spending to lure the last remaining states over to its side, that is, except one.

Now it appears that the Chinese government is running out of patience with eSwatini and is turning up the pressure on the kingdom. Last month, Chinese Ambassador to South Africa, Lin Songtian, published a sharply worded statement that clearly spelled out the consequences of eSwatini's intransigence.

"No diplomatic relations, no business benefits," said Ambassador Lin's statement that concluded with a veiled threat to the kingdom's plans to host an African Union summit later this year: "It is very hard for the friendly African countries of China to attend any AU summit hosted by a country refusing to recognize One China Principle and maintaining so-called "diplomatic ties" with Taiwan."

The issue gained international notoriety soon after that statement was published when the South African newspaper Daily Maverick published a story by freelance journalist Carien du Plessis about the Chinese embassy's efforts to pressure the eSwatini government. Similarly, the story is also being covered in eSwatini by Nation magazine editor Bheki Makhubu who interviewed Ambassador Lin recently about his statement.

Both journalists join Eric & Cobus to discuss eSwatini's foreign policy and why the kingdom is seemingly adamant about its diplomatic ties with Taiwan.

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Africa Not Prepared to Deal With the Consequences of Economic Disruption in China Feb 21, 2020

Show notes

The Chinese economy is undergoing unprecedented economic disruption due to the ongoing COVID-19 crisis and African countries are largely unprepared for the impact that it's going to have on their economies. The prices of most major commodities oil, timber, copper that sustain many African economies are all down significantly as Chinese demand has plummeted in recent weeks. And with the outbreak still not under control, there's no indication things are going to improve any time soon.

While the drop in trade with China due to the contagion is now being felt in many African economic sectors, the fact is that a lot of the changes that are now taking place in China-Africa trade were already well-underway even before this health crisis emerged.

China simply doesn't manufacture anywhere near as much as it did 5 or 10 years ago as the economy has become more focused on technology and services. A growing amount of that industrial output that defined China's early stage of economic development has been offshored to lesser developed countries in Southeast Asia and elsewhere.

But the problem in Africa is that policymakers across the continent still think of China as a place to sell raw materials, buy the finished goods and then tap Chinese credit for affordable development financing. All three of those categories are no longer as relevant as they were in the past, but that message doesn't seem to be getting through to decision-makers in most African capitals.

"I don't think African [leaders] are particularly well-prepared for what is a fundamental change in the way China's economy attaches itself to the rest of the world," said Jeremy Stevens, Standard Bank Group's Chief China Economist. "There's a widespread "lack of understanding [in Africa] as to what's really driving China's economy," he added.

Jeremy joins Eric & Cobus to talk about how the Novel Coronavirus outbreak is impacting the Chinese economy and why these changes present enormous risks for African economic stability.

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Email Jeremy at Jeremy.Stevens@standardsbg.com to sign up for his excellent Inside China newsletter that features insightful analysis on the latest Chinese economic trends.

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China Takes on a More Prominent Role in Mideast & Gulf Politics Jan 10, 2020

Show notes

Chinese Foreign Minister Wang Yi kicked off his annual tour of Africa in Cairo this week where he met with senior Egyptian leaders to discuss the growing instability in North Africa, the Mideast, and the Persian Gulf.

Wang also found a receptive audience in Egypt for China's controversial policies in its far western province of Xinjiang where hundreds of thousands, possibly even millions of Chinese, are being "re-educated" (the Chinese version of events) or forcibly interned (the Western assessment).

Beyond geopolitics, China also has a lot at stake economically in these regions as countries like Iraq and Saudi Arabia are among its largest suppliers of crude oil.

Camille Lons follows these issues from Bahrain where she is a Research Associate at the International Institute for Strategic Studies. She was also the Project Editor on the October 2019 paper "China's Great Game in the Middle East" that was published by the European Council on Foreign Relations.

Camille joins Eric & Cobus this week to discuss whether China will among the key beneficiaries of the ongoing crisis between the United States and Iran.

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China-Africa Relations in 2020: Key Trends to Watch Jan 06, 2020

Show notes

This week Eric & Cobus discuss what's ahead in 2020 for China-Africa relations. Each shares their views on three key trends to watch out for in the year ahead.

Join us for a wide-ranging discussion that covers everything surging Chinese tech investment in Africa, sustainable energy development to the question over whether African countries will be able to repay their debts to China.

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The Rapidly Growing Market for Chinese Private Security Contractors in Africa Dec 20, 2019

Show notes

The recent kidnapping of three Chinese miners in the southwestern Nigerian state of Osun highlights the vulnerability that confronts the Chinese in many parts of Africa. Chinese companies are well-known for being willing to work in highly volatile regions, even amid civil wars in places like the eastern Democratic Republic of the Congo, South Sudan, and Mali among others.

Until recently, Chinese companies opted to not invest in security measures or contracted with international firms like G4S who've been active on the continent for many years. That's now starting to change as Chinese private security contractors see an opportunity to provide protective services to companies all along the Belt and Road including Africa.

"In light of China's "going out'' policy, the need to support China's State-Owned Enterprises that are investing in high-risk areas has expanded the Chinese market for security services," according to Dr. Alessandro Arduino, Co-Director of the Security & Crisis Management International Centre at the Shanghai Academy of Social Sciences. "Risk assessment and mitigation in the African countries participating in the BRI requires a wide range of security services along both the maritime and land routes," he added in a recent column written for the China-Africa Research Initiative.

Dr. Arduino joins Eric to discuss the growing market for Chinese protective services in Africa and the risks confronting these security contractors who are operating in new, unfamiliar territory.

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Your subscription supports independent journalism. Subscribers get the following:

A daily email newsletter of the top China-Africa news.
Access to the China-Africa Experts Network
Unlimited access to the CAP's exclusive analysis content on chinaafricaproject.com

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The Rare News Interview with a Chinese Ambassador in Africa Dec 12, 2019

Show notes

Chinese ambassadors in Africa rarely grant one-on-one interviews with international journalists. But that's starting to change now, particularly as a few Chinese envoys are making themselves more accessible to the press and on social media platforms like Twitter.

Two ambassadors are especially noteworthy in this area: Lin Songtian in South Africa and Wu Peng in Kenya.

Ambassador Wu recently sat down with BBC journalist Dickens Olewe for an interview at the embassy in Nairobi. During the interview, they discussed some of the most sensitive issues that confront the China-Kenya relationship today.

Dickens joins Eric to provide a bit of background on how he was able to secure the interview and what he thought of Ambassador Wu's responses to questions about transparency, racism and whether China is engaging in predatory lending in Africa.

SHOW NOTES:

Listen to Dickens Olewe's full interview with China's ambassador to Kenya Wu Peng.

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Twitter: @eolander | @dickensolewe

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A daily email newsletter of the top China-Africa news.
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Why Ghana's $2b Resource Deal With China Is Not as Risky as Critics Charge Dec 06, 2019

Show notes

News coverage and social media commentary about the recent deal signed between the Ghanian government and the Chinese state-owned construction conglomerate Sinohydro is almost universally negative.

According to deal, Ghana would exchange 5% of its bauxite reserves for $2 billion of infrastructure. But critics in Ghana and internationally contend the deal doesn't make sense and is just too risky both financially and environmentally. If bauxite prices fall then Accra would be on the hook to make up the difference, potentially costing the country millions of dollars. Equally concerning is the fact that the mines are located in the Atewa Forest Preserve, one of West Africa's most important ecological zones and also a critical source for an estimated 5 million people.

The government, for its part, has struggled to challenge critics and present counter-arguments as to why this deal is in the best of the country and will not jeopardize fragile ecosystems. Ghana, they argue, has been responsibly mining bauxite for years so why all of a sudden is everyone so worried that this deal, in particular, is so risky?

Henry Kyeremeh is the Head of the Bank Accounts, Reserves and Interventions Unit at the Treasury and Debt Management Division in the Ghanian Ministry of Finance. He's a strong advocate for this deal as he believes it's the most efficient way for the government to leverage natural resources to build badly-needed infrastructure without taking new loans.

Henry joins Eric & Cobus to provide a different perspective on the Ghana-Sinohydrop deal than what has been portrayed in the news media and online.

IMPORTANT DISCLAIMER:

It's important to note that although Henry is a senior official in the finance ministry, in this interview he's not speaking in any official capacity on behalf of the Ghanian government and only sharing his personal views on this issue.

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Chinese and African Agriculture Have a Lot More in Common Than Most People Think Dec 03, 2019

Show notes

It's counterintuitive to a lot of people, but Chinese and African agriculture has a lot more in common with one another than many first expect. For the most part, both are dominated by small family farms that have to battle mightily with the twin effects of climate change and industrialization.

On the climate change front, drought haunts many parts of both China and Africa as deserts expand and rainfall becomes increasingly intermittent in some areas. Similarly, both China and Africa do not produce enough food to feed themselves and therefore depend on imported food to survive, so the stakes for agriculture in both regions are extremely high.

And, in terms of industrialization, in Africa, just as it is in China, the lure of jobs in the cities pulls more and more young people off the land in search of a better life.

Given that China has gone through many of the same challenges that African farmers encounter today, there's a huge opportunity for the Chinese to leverage that experience in its aid and development programs.

To get some perspective on Chinese agricultural engagement in Africa, Eric & Cobus are joined by Xingqing Lu, an Associate Program Manager from the independent non-profit organization Alliance for a Green Revolution in Africa.

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The Rise of Chinese Private Sector Investment in Africa Nov 30, 2019

Show notes

Chinese investors have been wary of the African market. For a long time, China's cash-rich venture capital, private equity, and corporate investors have preferred the stability in the U.S. or the cultural familiarity in Southeast Asia's markets. Africa, in their view, just didn't have the profile they were looking for as an investment destination. Many felt the risk was just too high in fragmented markets where consumers lacked sufficient wealth to generate the kind of returns their portfolios demand.

Well, that's no longer the case.

Now that Chinese money is increasingly viewed as "toxic" in the United States and Africa's consumer markets are beginning to mature, Chinese investors are increasingly getting over the fears they once had about engaging the African market.

Chinese private sector investment in Africa surged this year with hundreds of millions of dollars flowing into a variety of sectors across the continent:

Apparel: manufacturers are fleeing China's rising labor costs to set up new factories in places like Rwanda and Ethiopia.
Electronics: little known Chinese OEMs are setting up small factories in places like Uganda to be able to cut shipping costs and take advantage of Africa's preferential trade agreements with EU and US markets.
Mobile tech: Giants like Shenzhen-based Transsion Holdings are rapidly expanding into new markets beyond hardware including music and fintech among others.
Fintech: Without a doubt, the rush of Chinese investment into Africa's (largely in Nigeria) fast-growing mobile payments space is the story of the year. So far, they've committed around a quarter-billion dollars with more expected.

The list goes on and on... from Huawei in the telecom sector to Beijing-based African pay-TV giant StarTimes that's now making sizable investments in original content production and programming. And these are just the big names who get most of the attention. There are countless other small-to-medium-sized Chinese businesses active in every country across the continent doing everything from running factories that serve local markets to resource extraction.

But in order for Chinese investors, particularly those with large portfolios, to successfully to do deals in Africa, they need help, middlemen who can guide them through these very complex markets. So more banks in Africa are hiring people like Kai Zhu to be those guides. Kai is the China-Africa Corridor Deal Team Leader at Absa Group, the Johannesburg-based financial services company that is also Africa's third-largest bank.

Kai joins Eric & Cobus to talk about what's behind China's increased investor interest in Africa and where he sees the trend going in 2020.

JOIN THE DISCUSSION:

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Twitter: @eolander | @stadenesque

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Your subscription supports independent journalism. Subscribers get the following:

A daily email newsletter of the top China-Africa news.
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Ghana's Risky $2 Billion 'Roads for Resources' Gamble with China Nov 26, 2019

Show notes

Ghana is moving forward with an environmentally-risky resources-for-infrastructure deal with the Chinese state-owned construction conglomerate Sinohydro. According to the agreement, Ghana will provide 5% of its bauxite reserves to Sinohydro in exchange for a $2 billion package of infrastructure that includes roads, bridges, power plants and oil refineries.

While Ghana's need for infrastructure is understandable, critics contend that this deal is too just dangerous as it threatens the water supply of up to 5 million people. Most of the bauxite that the Chinese will mine is located in the pristine Atewa Forest Reserve in eastern Ghana and is internationally recognized as one of the most important ecosystems in West Africa.

The two governments, though, appear determined to proceed regardless of the potential environmental consequences. China recently released the initial tranche of $649 million as part of the deal indicating that both mining operations and construction will start soon.

Emmanuel Amoah-Darkwah, an Accra-based economist and market analyst for IHS Markit, is closely following the deal and joins Eric & Cobus to explain why he thinks it's just too risky.

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Twitter: @eolander | @stadenesque | @Amoah_Darkwah

SUPPORT THIS PODCAST. BECOME A SUBSCRIBER TO THE CHINA AFRICA PROJECT.

Your subscription supports independent journalism. Subscribers get the following:

A daily email newsletter of the top China-Africa news.
Access to the China-Africa Experts Network
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