Africa's trade ties with China in spotlight as President Xi visits

DAR ES SALAAM Sun Mar 24, 2013 8:10am EDT

Chinese President Xi Jinping adjusts his earphones during his visit to the Moscow State Institute of International Relations in Moscow March 23, 2013. REUTERS/Sergei Karpukhin

Chinese President Xi Jinping adjusts his earphones during his visit to the Moscow State Institute of International Relations in Moscow March 23, 2013.

Credit: Reuters/Sergei Karpukhin

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DAR ES SALAAM (Reuters) - Chinese President Xi Jinping faces growing calls from policymakers and economists in Africa for a more balanced trade relationship between the continent and China as he arrives in Tanzania at the beginning of an African tour on Sunday.

China's ties with the continent dates back to the 1950s, when Beijing backed African liberation movements fighting to throw off Western colonial rule. It has built roads, railways, stadiums and pipelines to win access to Africa's oil and minerals like copper and uranium to feed its booming economy.

Many across Africa see China as a valuable counterbalance to the West's influence. But as the relationship matures there is mounting discomfort in Africa that the continent is exporting raw materials while spending heavily to import finished consumer goods from the Asian economic powerhouse.

"He will be looking to tone down the feeling that China is just here to exploit resources. I think that is going to be his main job," James Shikwati, director of the Nairobi-based Inter Regional Economic Network think tank, told Reuters.

China's new leader is due to land in Tanzania's commercial capital, Dar es Salaam, on Sunday for a state banquet before delivering his first policy speech on Africa in a Chinese-funded conference hall on Monday.

Xi will go on from Tanzania to South Africa where leaders of the world's major emerging economies, known as the BRICS, will meet on Tuesday and Wednesday and could endorse plans to create a joint foreign exchange reserves pool and an infrastructure bank at a summit.

The proposal underscores frustrations among emerging markets at having to rely on the World Bank and International Monetary Fund, which are seen as reflecting the interests of the United States and other industrialized nations.

Xi's visit to Africa - which ends in the Republic of Congo - on his first trip abroad is seen as a demonstration of Africa's strategic importance to China, driven by Beijing's hunger for resources and African demand for cheap Chinese imports.

ENERGY

The east African seaboard is hot property after huge gas discoveries boosted Tanzania and Mozambique's combined gas reserves to more than 180 trillion cubic feet.

Mozambique accounts for the bulk of this, with enough to supply world number one importer Japan for 35 years. There have also been oil strikes in neighboring Kenya and Uganda.

Xi will criss-cross a region where China's economic growth and injections of aid offer both hope and cause for anxiety.

Nigeria's central bank chief, Lamido Sanusi, said Africans should wake up to the realities of their "romance with China."

"So China takes our primary goods and sells us manufactured ones. This was also the essence of colonialism," Sanusi wrote in the Financial Times this month. "Africa is now willingly opening itself up to a new form of imperialism."

"We must see China for what it is: a competitor."

In Dar es Salaam, where Tanzanian and Chinese flags fluttered in the coastal breeze, businessman Hamisi Mwalimu said China was flooding local markets with counterfeit goods while stripping the continent of its natural resources.

"We need a smart partnership where both Tanzania and China benefit. Right now, they're getting a much better deal than us," Mwalimu said.

EQUAL PARTNERS?

Beijing has kept under wraps details of new investments or aid Xi will announce, a typical feature of overseas trips by Chinese leaders. Last year, Xi's predecessor Hu Jintao offered $20 billion in loans to African countries over the coming three years.

At that summit, China pledged to help Africa export manufactured products, not just raw materials, and to import from the continent.

But rights groups and some Western governments say China supports African governments with dubious human rights records to get access to resources. Often cited is Beijing's relationship with Sudanese President Omar Hassan al-Bashir who faces international war crimes charges.

The European Union rejects what it labels China's "check book" approach to doing business with Africa and demands reforms and the transparent use of aid.

Such criticism draws rebukes from China that the West treats Africa as though it were a colony.

"Africa wants to be treated as an equal, and this is what many Western countries do not understand, or are at least are not willing to do," Zhong Jianhua, China's special envoy to Africa, told Reuters in an interview this month.

"China at least knows that we have to treat people in Africa as equals."

China is criticized for using Chinese workers on infrastructure and mining projects in Africa. Beijing estimates almost 1 million Chinese are working in Africa.

Zhong acknowledged Chinese companies faced criticism for flooding Africa with Chinese workers.

"We have told Chinese companies that they cannot just use Chinese workers," Zhong said. "I think most Chinese firms now realize this."

Yet not all African governments appear that worried with the use of Chinese workers, especially for infrastructure projects.

"China isn't coming to Congo to create jobs," Republic of Congo Ambassador to China, Daniel Owassa, told Reuters.

(Additional reporting by Ben Blanchard in Beijing; Writing by Richard Lough; Editing by Pravin Char)

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