The NY Times posted an article regarding China's increasing "investment" in Africa, specifically, Angola. I have been sporadically writing about China's involvement in Africa such as in Sudan, where despite the war, China's oil interests there are well protected. This particular report, China’s African Adventure Is particularly detailed, and sheds some light on what is wrong with this so called "investment."
In November 2003, Angola’s finance minister traveled to China to discuss a financial package. One year later, China announced that it had extended to Angola a $2 billion oil-backed loan, an Angolan specialty in which credit is secured by future oil production — just the kind of risky gimmick the I.M.F. had preached against. China uses its foreign aid as a means to promote opportunities for private investment, and the two countries agreed that Chinese construction companies would build the giant infrastructure projects financed by the loans.
China immediately began to increase its purchase of Angolan oil; by early this year, Angola had replaced Saudi Arabia as its single-largest source of oil. The extent of China’s commitment to Angola became stunningly clear this spring, when Sinopec, a Chinese state-owned energy company, bid $2.2 billion for the right to develop two deep-water blocks — a sum that shattered all previous records anywhere in the world. Sinopec made its investment in partnership with Sonangol. The billions China offered astonished the Western oil companies, which had already explored adjacent areas and had submitted only modest bids.
One should look at this very carefully. China loans Angola $2 billion secured by future oil production. Angola would use a portion of that money on development projects, the rest to disappear into the ether. Of that money going to development projects, Chinese companies get the contracts to do the development. Thus the Chinese have in effect paid the Angolans to pay the Chinese back. Plus interest. based on Oil production that the Angolans largely have little expertise in. How so you say? Check it:
Tu explained that they had been teaching the Angolans technical skills. “We taught them how to mix concrete,” he told me. When I expressed amazement that he had had to impart this skill, concrete being pretty much the only building material used in Angola, Tu said, “They didn’t even know bricklaying.” Apparently, there had been so little building activity until the last few years that even the most basic skills had been lost. Or, alternatively, the Chinese paid so badly that they couldn’t attract qualified workers.
Hence the hollowness of the so called "revolutionaries" who cannot think beyond their own selfish wants that they would decimate the country of modern technocrats and skilled artisans but are quick to teach young men and women how to kill. So bad is this situation that the Chinese are being paid to do just about everything:
I came across a high school being built by a Chinese company. It was Sunday morning, but the project manager, Tu Qingkui, was hard at work. He and the 180 workers he supervised had already built three dormitories to house 265 students (another 500-some-odd would commute) and had framed up the main academic building. Tu and his 30 Chinese employees worked for Sinohydro, one of the world’s largest construction companies; it was, Tu said proudly, responsible for half the work on the Three Gorges Dam. Sinohydro had projects all over Angola and across Africa. Once they were done here, they would move on to the central hospital in Huambo.
No local or continental African company can do this? Not something I even believe. Ultimately the Chinese are in this for themselves. As I said earlier, first they want to the oil. But as a nice side tack they get their loans back by Angola's use of Chinese construction companies. it is a win -win for the Chinese. Ultimately though Angola is going to have to raise the education level in that country it is clear that they are behind by at least 100 years in terms of technical know how. They are set to have elections soon. Hopefully there will be some change.