Deal with Guinea highlights China’s business ties in Africa
BEIJING - A $7 billion mining deal between Guinea’s repressive military regime and a little-known Chinese company underscores China’s full-throttle rush into Africa and its willingness to deal with brutal and corrupt governments.
The deal announced last week by the West African country’s military junta offers the company, China International Fund, access to Guinea’s bauxite and other minerals and could provide major revenues to a government facing international isolation. Guinea’s soldiers opened fire on demonstrators late last month, killing up to 157, and raped women in public.
Human rights groups decried the pact. China’s government has declined to confirm it or answer related questions, and the company also refused to comment.
In many ways, the Guinea deal reflects established Chinese business practices in Africa, characterized by huge investments in a still-poor continent but also secrecy and often scant regard for labor and human rights.
China’s defenders point out that other investors from the West, Japan, India, and elsewhere are also major economic partners with less-than-democratic African governments. In Guinea,
But China’s practices have raised questions about whether the huge sums will hamper the progress of human rights and good governance in Africa, even as they raise the standards of living and line the pockets of some. China has given large chunks of money to corrupt and abusive regimes such as those in oil-rich Nigeria and Sudan, much criticized over abuses in the Darfur region. For example, China has a controversial $9 billion agreement with violence-plagued Congo.
“There’s obviously mixed emotions with regard to China-Africa relations,’’ said Kellie Jane Whitlock, of the South African magazine Corporate Africa.
Unlike companies from the recession-struck West, there are “Chinese companies that are still growing and looking into investing further into Africa,’’ Whitlock said. The Chinese are “quite inclined to look after their investment and build their investment. They are serious about investing in Africa.’’
Scrutiny and mixed emotions are rising in Africa as the volume of China’s dealings soar. Trade has soared 10 times since 2001, passing the $100 billion-mark last year. Estimates of Chinese investment in Africa range upward from $6 billion as China tries to lock up oil, gas, and other key resources for its resource-hungry economy. Estimates for total loans, investment and aid donations - often difficult to distinguish from each other - run closer to $50 billion.
Hong Kong-registered China International Fund has done big deals with another undemocratic African government: Angola. The company, known as CIF, is building housing, highways, and the capital’s airport in Angola, which is one of China’s leading suppliers of oil.
CIF is a private company, though its ultimate ownership is unclear.
But in embarking on these deals, it can count on high-level access to leading Angolan officials and a web of contacts to China’s state-backed industries and companies, especially the Export-Import Bank of China, which funds many of the country’s major overseas investments.
