China 'buying out' Africa: Top 5 destinations of Chinese money
On a quest to secure raw materials and energy resources to support the exponential growth of its economy, China has become the fastest-growing investor in Africa. As of July 2010, China overtook the United States as the worldâ€™s largest energy user, according to the International Energy Agency (IEA), and much of that energy comes from African countries such as Sudan and Angola. Critics argue that China undermines democracy, human rights, and transparency by signing business deals with authoritarian leaders. They also point to the â€ś$10 billion imbalance in Chinaâ€™s favor in 2010â€ť as a type of African recolonization.
But many African leaders welcome the unconditional Chinese largesse. â€śThere are people who still consider Africans like children who can be easily manipulated," Faida Mitifu, Congo's ambassador to Washington told Reuters. "The good thing about this partnership is that it's give and take.
Here are the top five destinations of Chinese capital, in order of estimated Chinese investment.
Angola is endowed with resources such as oil, diamonds, gold, and copper, but it has only begun to rebuild after decades of crushing civil war. Oil and diamonds constituted 60 percent of the economic output in 2008 and Angola is expected to surpass Nigeria as the biggest oil producer in sub-Saharan Africa, The Economist reports.
Angola is China's top African supplier of crude, and China buys 43.8 percent of Angolaâ€™s total oil exports. The bilateral trade between the two countries exceeded $120 billion in 2010, according to China Briefing, a business magazine and news agency. The majority of the oil deals "are characterized by loans and credit lines in connection with infrastructure projects," China Briefing says, including three major deals financed by Chinaâ€™s Export-Import Bank, totaling more than $7 billion since 2004.
In addition to oil-related projects, China is heavily involved in Angolaâ€™s reconstruction effort, after a devastating 27-year civil war that ruined much of its infrastructure. One of the main investments is the rebuilding of the Benguela Railway, a 840-mile transcontinental railway that links the Atlantic port of Lobito in Angola with rail networks in the Democratic Republic of Congo and Zambia. The project is expected to cost $300 million, the Japanese Institute of Developing Economies reports, but it will provide a much-needed cheap outlet for Congolese and Zambia copper, tin, and coltan. Angolan-Chinese bilateral trade was roughly $25 billion in 2010, Asia Times reports.
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