China and Africa

DavidChou

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If you drive an EV, remember to thank Lao Yang and his crew.
Indeed! And the locals should make him a chief -- according to SCMP (article this summer, with pics), there are like twenty-two Chinese African Chiefs! All were honored for economic development work.
I mean you said it - Russian mercenaries aren't the same as Chinese businessmen. There isn't really much else to it. They are in places like CAR, Mali, Sudan, Libya and Niger, which are in the middle of civil wars and anything goes there. China can't touch those.
So the DRC ain't tryna shake down the Russians cuz they guns -- that's all?? And why ain't the Russians afraid of any diplomatic fallout, even before the Ukraine War -- nothing to lose anyway?

I wonder if Xi can coordinate with Putin to shake down Tshisekedi back LOL -- SCMP ran an article (with photos) during the Niger coup about a handful of Chinese workers, engineers, getting rescued by Wagner earlier in the Congo!

(Very interesting the diametrically opposite but seemingly mutually convenient styles of African interaction between Russia and China -- I really do wonder if it isn't actually coordinated...!)
The most uncomfortable thing Chinese companies have done in Africa was to hire Eric Prince's Blackwater. They provided security to the Chinese firms' Congolese operations for a while.
Wonder how come them Chinese keep getting killed in Pakistan then (does Black Water not operate there)??

And why's China all shy sending in some PMC of its own; years ago when that Dijubouti base first made the news, SCMP had an article on Chinese PMCs and how they were being trained by Black Water -- in China!!
 

Biscuits

Major
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I'm curious...how's Russia able to have the Wagner Group, of all people, running gold mines and such without any problems???

Unless I'm missing something, it seems like they're doing good ol' fashioned resource extraction without incident whereas China's forever forgiving African loans that were low or even no-interest to begin with...sorry for being a Nervous Nelly but I just don't see what China's plan is with these welfare cases: They can't seem to ever do anything properly themselves for some reason but if China takes over then they complain about all the Chinese influence...I mean okay China had no choice but I really don't have any confidence in China's African "friends"...I really think they'll be on the Chinese dole forever (like how thirty years later Poland is still the biggest E.U. welfare case despite moaning and groaning about the E.U.).

Yes yes Russian mercenaries isn't the same as Chinese businessmen but you know what I mean..my understanding is that China's African engagement is for geopolitics and business (export its excess capacity, secure natural resources, and develop new markets) so how's it doing by those criteria?
I mean Russians are getting maybe millions and a few sources of gold, while China is getting billions and working towards majority or plurality in every sort of mining activity.

Not many people/resources are affected by Russian presence, while China has the ambition to create infrastructure through which nearly all types of resource can be moved to developed Asia, which would in return send back processed goods meant to cover the entirety of the host country's market.

Overall the Chinese mission to Africa is highly profitable, hence why China's enemies try to sabotage it.
And any chance of China shipping at least light manufacturing to Africa eventually due to its own shrinking workforce (demographic decline) -- say by 2050? Because that seems to be the hope of all the B.R.I. signatories, to not just get "one-time" infrastructure but Chinese investment, including in the form of relocated Chinese light industry.
A marginally smaller workforce decades down the line is not gonna pressure the industrial sector. Especially since most of China's working class isn't employed by industry sector, but by service sector. So the cuts would probably hit service sector (in the form of increased automation) first.

To get industry, they need to prove they can be more efficient and create better products. In some categories, that might be the case once interest drops in China, but I don't think across the board that it will be a significant effect.

What China needs from these countries are stuff that can't be done solely by technology. Mining, farming, consuming Chinese products, and eventually migrant labor.
 

DavidChou

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I mean Russians are getting maybe millions and a few sources of gold, while China is getting billions and working towards majority or plurality in every sort of mining activity.

Not many people/resources are affected by Russian presence,
I would think rape and murder make for bad relations with the locals and will boil over eventually...yes I'm sure I'm missing something but I can't see for the life of me why there's no uproar, almost at all. And how's it that China gave up the African gold market to Russia -- comparative advantage or politics?

Speaking of which: How closely do you think Xi and Putin are coordinating their African interests??
while China has the ambition to create infrastructure through which nearly all types of resource can be moved to developed Asia, which would in return send back processed goods meant to cover the entirety of the host country's market.

Overall the Chinese mission to Africa is highly profitable, hence why China's enemies try to sabotage it.
I sure hope so! But how do you know this? Are you simply surmising profitability given continued Chinese presence (since people vote with their feet and ain't nobody movin') or do you have some actual data?

Me, I just assumed that the project (China's overall African mission) is mainly geopolitical and only economic secondarily -- and even then, the economic components are really geostrategic given the need to export excess capacity and develop new markets -- which is why loan after loan is just written off; the Party knew all along it would have to recoup "profit" in other ways (diplomatic support, P.R., sourcing non-national [private individual] customers).
A marginally smaller workforce decades down the line is not gonna pressure the industrial sector.
I don't think China's in danger of demographic "collapse" but the decline is certain and large enough to give Party planners work to do for years to come, which I gather by all the little tinkering here and there with policy (three children) and messaging ("to get stuffed is glorious" LOL)....
Especially since most of China's working class isn't employed by industry sector, but by service sector. So the cuts would probably hit service sector (in the form of increased automation) first.
But isn't it the case that China has a weak service sector?? And isn't it the case that that's actually intentional???

And I don't see why you don't seem concerned given that the movement from manufacturing to services is often faulted as a reason for Westoid decline!
To get industry, they need to prove they can be more efficient and create better products. In some categories, that might be the case once interest drops in China, but I don't think across the board that it will be a significant effect.
Dambisa Moyo said years ago that Africa has the largest amount of fertile soil in the world but was hampered by protectionism all over from developing its agricultural sectors -- and I remember seeing news clips of Chinese companies trying to market African produce to China...any idea how that's going? Would probably start with that if anything, no?
What China needs from these countries are stuff that can't be done solely by technology. Mining, farming, consuming Chinese products, and eventually migrant labor.
MIGRANT LABOR????

How can you say that if you actually feel the Chinese demographic decline to be only marginal???
 

gelgoog

Lieutenant General
Registered Member
Dambisa Moyo said years ago that Africa has the largest amount of fertile soil in the world but was hampered by protectionism all over from developing its agricultural sectors -- and I remember seeing news clips of Chinese companies trying to market African produce to China...any idea how that's going?
For cattle, Sub-Saharan Africa is a disaster. Because of tropical diseases like the African Sleeping Sickness transmitted by flies.
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Most foodstuffs consumed in the Northern Hemisphere also won't easily grow there. The climate is different. You also have tropical plant diseases. You won't be growing wheat in large amounts that's for sure. You basically need to grow tropical foodstuffs. And those have typically worse productivity due to lack of development of cultivars.

South Africa has a more temperate climate, but it isn't that large to begin with.

To turn Africa into a major agricultural producer would take decades of investment into cultivars and growing techniques.
 

DavidChou

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For cattle, Sub-Saharan Africa is a disaster. Because of tropical diseases like the African Sleeping Sickness transmitted by flies.
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Surely whatever worked for other tropical locales can work in Africa, too...? And it looks like the solution is simply to collar affected stock with that natural repellent....
Most foodstuffs consumed in the Northern Hemisphere also won't easily grow there. The climate is different. You also have tropical plant diseases. You won't be growing wheat in large amounts that's for sure. You basically need to grow tropical foodstuffs. And those have typically worse productivity due to lack of development of cultivars.

South Africa has a more temperate climate, but it isn't that large to begin with.
Now that's really odd -- since Rhodesia was once known as the Bread Basket of Africa...and Moyo was a World Bank consultant and Goldman Sachs economist...and it really doesn't seem like Africa's devoid of agricultural potential but only quality capital (namely, human -- bad managers and unmotivated labor)....
 

DavidChou

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That's where that docu was shot, in 2011, near Kolwezi where our intrepid CREC contractor Lao Yang got his first taste of working in Congo. Pretty much all the copper and cobalt that was shipped out of Congo in the subsequent years, traversed that road...remember to thank Lao Yang and his crew.
That reminds me -- how's it possible that they didn't know how to construct a road in all of the Congo, such that they had to import a Chinese crew????

In all of fifty years they never built any more roads after the Belgians????? Or was Lao Yang and company coming in anyway as a part of the mining deal....
 

N00B

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So the DRC ain't tryna shake down the Russians cuz they guns

Russia has almost no presence in DRC.

And how's it that China gave up the African gold market to Russia

Russia doesn't 'own the African gold market' lol. WAGNER is a small fry. They don't control even 1% of African gold. The reason you think they are somewhat large is due to Americans being hysterical. Africa's gold has been solidly under Western control since forever, with national govts having a minority stake. China is largely locked out. As is the rest of the world.

Not to justify it, but Russia role in Sudan's gold trade is in no way different, in size and scope, from Americans looting Syrian oil (
going on for a decade now). The only place where Russia and China came into direct contact in Africa is in CAR where WAGNER restarted production in a gold mine after Chinese companies left due to the civil war. In fact they
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there a few months ago. I think this is the one you confused with Congo.

Me, I just assumed that the project (China's overall African mission) is mainly geopolitical and only economic secondarily -- and even then, the economic components are really geostrategic given the need to export excess capacity and develop new markets

That's American copium.

If Beijing wanted to absorb 'excess capacity', they don't need to send workers to the interior of Ghana. They can just sanction an additional 10,000 km of expressways to be built in China itself.

China's geostrategic focus is largely concentrated in the SCS.

China's interest in Africa is primarily economic. Steady supply of raw materials and access to market.

I remember seeing news clips of Chinese companies trying to market African produce to China...any idea how that's going? Would probably start with that if anything, no?

African exports to China increased from <$5 billion in 2000 to $100 billion in 2022. But 90% of it is commodities.

That reminds me -- how's it possible that they didn't know how to construct a road in all of the Congo, such that they had to import a Chinese crew????

In all of fifty years they never built any more roads after the Belgians????? Or was Lao Yang and company coming in anyway as a part of the mining deal....

Basically yes. Not just highways, they asked China to fix even city streets and build schools. Yes, schools.

Before the deal with China, Congo's road and rail network was kept in somewhat usable condition by American aid (until 1990 when all hell broke loose).

Even by third world standards, Congo is particularly badly governed. Doing a cross country road trip in Congo is considered the ultimate challenge in off-road expedition circles.
 
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DavidChou

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Russia has almost no presence in DRC.
Do you think Tshisekedi could play China off against them or had Xi and Putin worked out their respective "spheres of influence?"
...Been solidly under Western control since forever, with national govts having a minority stake. China is largely locked out. As is the rest of the world.
Hmm...so now, surely Westoids covet Chinese contracts for African resources too -- but how come they ain't made a play for them yet?

Seems the easiest thing to do, to cause massive trouble for Chinese operations in Africa. Or ate things quiet due to backroom horse-trading ("you keep the gold, I take cobalt since I can process it anyway")?
Not to justify it, but Russia role in Sudan's gold trade is in no way different, in size and scope, from Americans looting Syrian oil (
going on for a decade now).
That's an interesting comparison; helps make sense of things -- thanks.
The only place where Russia and China came into direct contact in Africa is in CAR where WAGNER restarted production in a gold mine after Chinese companies left due to the civil war. In fact they
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there a few months ago. I think this is the one you confused with Congo.
Yeah, that's it; thanks for finding it!
That's American copium.
How so?? Especially if it's primarily economic as you believe -- why would they need to "cope"...what was ever lost for there to be a need for copium?
If Beijing wanted to absorb 'excess capacity', they don't need to send workers to the interior of Ghana. They can just sanction an additional 10,000 km of expressways to be built in China itself.
No, not "absorb" but export -- the idea being to not only maintain expertise but upgrade it, since working under such different circumstances (like poor Lao Yang shocked to sh!t at what he had to deal with every f'king day) really improves the skillset...it's something of a quest for knowledge for China in that sense.

Plus building up their corporate c.v. (LinkedIn profiles LOL) for other foreign work, I imagine.
China's interest in Africa is primarily economic. Steady supply of raw materials and access to market.
Primarily?? Curious: Is there anywhere in the Global South where Chinese interests are *not* primarily economic but political? I can only imagine some place like the Solomon Islands or Maldives, outtaway kinda places where it doesn't seem like there's really a lot of major business opportunities....
Before the deal with China, Congo's road and rail network was kept in somewhat usable condition by American aid (until 1990 when all hell broke loose).
So that's the thing I'm curious about; was it Americans/non-African foreigners actually doing the infrastructure work (even if "only" planning and managing things) or are there actual native/local Congolese companies and general contractors that exist in country?
Even by third world standards, Congo is particularly badly governed. Doing a cross country road trip in Congo is considered the ultimate challenge in off-road expedition circles.
You seem really knowledgeable about Chinese activities in Africa. What might you advise Xi Jinping if you had the opportunity -- "keep on keepin' on Comrade Chairman" or is there anything you would change somehow (and why or why not)?

Any problems you think is on the horizon? Like climate catastrophe, et cetera. How would you handle treachery like Tshisekedi's? Would you try coordinating with Putin?
 

N00B

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Do you think Tshisekedi could play China off against them or had Xi and Putin worked out their respective "spheres of influence?"

Not Russia, but Tshisekedi is basically playing China off against the West. Russia is not relevant in Congo in any way and Putin can't help China here.

This isn't necessarily unmanagable. If Tshisekedi asks for a greater cut, it's not a big deal, as long as he is reasonable. His asking price is too high but I think that's just a negotiation tactic + signalling to domestic audience (elections coming up this December). He knows fully well that Congo needs China. Talks are currently ongoing. Let's see.

But I still think the China's Congo ventures are risky in the medium to long term. But that's not because of Tshisekedi per se but due to the overall political climate in Congo. It's really, really bad. Despite two decades of relative peace, the central govt hasn't managed to build any state capacity. Not even in the Kinshasa region which is entirely under their control. Regional politicians/warlords are all looking at the mines and licking their chops. One misstep by Kinshasa and suddenly you have another civil war flaring up.

Hmm...so now, surely Westoids covet Chinese contracts for African resources too -- but how come they ain't made a play for them yet?

Seems the easiest thing to do, to cause massive trouble for Chinese operations in Africa. Or ate things quiet due to backroom horse-trading ("you keep the gold, I take cobalt since I can process it anyway")?

Right now, it is not Western companies that are picking up Chinese assets. It's the other way round. Chinese companies are gradually acquiring shares in Western operations. Zijjin mining took half of the Kamoa-Kakula mine from Canada's Ivanhoe. CMOC took over TFM from American Freeport-McMoran. Business is good, for now.

In future the same may happen for gold as well. Simply put, China is more powerful than the West when it comes to mining in Africa right now and the gap will keep on increasing. Barring an outright millitary invasion (like Libya 2011), they can't do much, only wordcelling.

How so?? Especially if it's primarily economic as you believe -- why would they need to "cope"...what was ever lost for there to be a need for copium?

That's what they have been doing since 1949. It's probably an unconcious habit now. It's not even like they refine any of these metals that much.

Primarily?? Curious: Is there anywhere in the Global South where Chinese interests are *not* primarily economic but political? I can only imagine some place like the Solomon Islands or Maldives, outtaway kinda places where it doesn't seem like there's really a lot of major business opportunities....

North Korea. Technically not global south though. And then of course there is Taiwan. These are the two places where China simply won't care about economics if push comes to shove.

Next would be Russia and Pakistan - for these two too, geopolitical factors are more important for China than money. China can't allow either of them to go down.

Then the central Asian 'stans and the ASEAN countries. The railway line to Laos was essentially a gift, and a signal to Vietnam - "You can have this too if you bow."

I just don't think SSA falls into this category yet. Even American geopolitical interest in SSA is quite low compared to what it used to be during the cold war.

So that's the thing I'm curious about; was it Americans/non-African foreigners actually doing the infrastructure work (even if "only" planning and managing things) or are there actual native/local Congolese companies and general contractors that exist in country?

Back in the 1980s? Same as Chinese today I guess. Foreign managers + local labor.

Western companies are not entirely absent in Congo today either. World Bank has done multiple projects in recent years, although smaller than Chinese.

Congo does have local contractors too but still smallish, compared to other African countries (like say Julius Berger in Nigeria). The reason why local Congolese contractor can't grow is due to extreme corruption.

You seem really knowledgeable about Chinese activities in Africa. What might you advise Xi Jinping if you had the opportunity -- "keep on keepin' on Comrade Chairman" or is there anything you would change somehow (and why or why not)?

Any problems you think is on the horizon? Like climate catastrophe, et cetera. How would you handle treachery like Tshisekedi's? Would you try coordinating with Putin?

Honestly, advising Xi Jinping is above my pay grade lol. Basically I want people not to pay *any* attention to what Western media says about China in Africa/BRI and keep the eye firmly set on the balance sheet.

Not *less* attention. I want you to ignore it in its entirety. It's 100% focused on doing FUD and if you so much as touch that crap you will learn something wrong. There are very few Western outlets that are somewhat honest in their reporting but none in MSM.

I do think China over-invested/loaned in Africa and some of these are bound to go bad. But it's managable. For its part, Beijing already seems to have learned the lesson and Chinese investment/loan in Africa has gone down drastically since 2020. Some consolidation is due.
 

TK3600

Major
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Standard third world problem. I won't blame Africa alone on this.

Europe/America learned this lesson early on (by late 1980s) which is why they largely disengaged from Sub-Saharan Africa as soon as the cold war ended. Mobutu was chucked out. A large number of dinosaurs were sent to retire. HIPC loan write off was completed. Having throughly burnt their fingers, they packed their bags and left. In some cases, like Somalia, they were sent packing.

By 2000, the only engagement the west had with Africa was a modest amount of aid and UNHCR run refugee camps.

I mean take TAZARA itself. It was an almost free gift from China at a time when China itself was poor. They later got aid from USA too, for maintenance of this line. End result? Zero.



On the resource front, China is doing excellent, for the moment. In one of the largest mineral resource rich country in the continent, DRC, Chinese companies owns nearly 50% of all mines. It started with the SICOMINES deal (2008) and soon many other Chinese public and private companies have followed.

The associated risk is also rising, fast.

Like, really, really fast. DRC's new president, Felix Tshisekedi picked a fight with China the moment he came to power. First target was CMOC which owns 80% of the giant Tenke-Fungurume mine. It's the world's largest cobalt reserve. Felix gave CMOC a proper shakedown, to the tune of an additional $2 billion, to be paid over the next decade.

At the same time he targeted SICOMINES. The demand on this venture is an eye watering $17 billion, and he wants the Congolese govt share in the venture to be raised from current 38% to 70%! Truly the deal of the century.

Other than DRC, China has decent presence in the oil sector in Angola, Nigeria, Sudan and South Sudan. And a new plan is now afoot in Guinea, for iron ore.

The DRC situation however, is probably becoming a gray rhino for China. Chinese mining companies have poured in ~$10 billion so far into this fragile country. They are far from recovering their investments. Kinshasa knows this and I think the shakedowns will continue.



So far, only Ethiopia has managed to make sizable progress on this front. A good number of Chinese companies have opened production units there. But then they had to start a civil war (of course). Simply put, the business environment in SSA is so poor that China will most likely focus on SSA dead last. If and when Chinese manufacturing moves overseas, it will most likely go to ASEAN, South Asia, North Africa or LATAM long before it goes to SSA. Right now India alone has captured more Chinese electronics assembly investment (Xiaomi, Oppo etc) than entire SSA and India and China aren't exactly sympatico with each other (India isn't a member of BRI).

I think China way overestimated the potential of SSA and poured in too much money in too short time. To give an idea of the scale of Chinese largesse, over the last 20 years, China has funded some 30+ hydropower projects all over the continent. Hydro dams are typically very large deal. They have funded 30+ of those.

One major debtor, Zambia, has already tanked and right now China, IMF and various private lenders are having a slapfight over who will take the fall.
Europeans has long learned this while doing early global trade. Always bring guns while trading. Will China learn from its mistake? Dont be another Zheng He.
 
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