Sunday, November 05, 2006

China-Africa: A Summary of the Summit

Sources: CNN   Reuters   Washington Post   Times of India

As stated in the previous blog, Chinese and African leaders closed their recent summit with nearly $2 billion dollars in trade deals. There were 16 agreements on trade between African and Chinese leaders, concluding an unprecedented summit between the two groups. China and 48 African nations pledged “a partnership based on political equality and mutual trust, economic win-win cooperation and cultural exchanges.” The event included heads of 35 African nations, top officials from 13 others, as well as Chinese president Hu Jintao, and concluded at the Great Hall of the People in Beijing. This was the largest gathering of national heads in the history of China.

The deals included Chinese commitments to build expressways in Nigeria, a communications network in Ghana, and an aluminum plant in Egypt. These agreements will likely continue to boost the world’s fourth largest economy, as well as continue to fuel the nearly $40 billion dollars of Sino-African trade per year. China is seeking to increase trade to $100 billion by the year 2020. Furthermore, China is attempting to gain more from the Nigerian oil market, as the state-run Chinese oil producer CNOOC recently acquired a 45% interest in a Nigerian oilfield. In conjunction with the summit, a Chinese company also announced an $8.3 billion contract to build a railway in Nigeria.

However, the summit not only included trade agreements but also pledges of aid from China to the African continent. China has extended nearly $5 billion in aid (3 billion in preferential loans, 2 billion in preferential buyer’s credits) to nearly 41 different countries in Africa over the next three years. Furthermore, China promised $5 billion for a fund to encourage Chinese investment on the African continent. This is likely to garner additional support for Chinese reforms to the United Nations, and also place China ahead of the United States as the largest aid-giver to Africa. This practice of “making friends with the help of aid money” is something that the United States and other developed nations have practiced for years, and will likely assist China in gaining an advantage in resource rich nations. China is keen to secure oil, gas, and mineral resources from Africa.

As China continues to grow in economic influence in the world, what sort of political ramifications may this have for other Pacific Rim nations? How does the Chinese influence in Africa (Africa was, according to the Chinese, very important in the official UN recognition of the Beijing government instead of the Taipei government) affect India’s bid for a permanent United Nations seat?

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