In this week's emerging powers news roundup, Chinese investment outstrips the ability of state-run banks to provide low-interest finance, Africa leads the way on climate change, and China faces allegations of hoarding rare earths and precious metals.
Chinese investment is now flooding into Africa on such a scale that it has outstripped the ability of state-run banks to provide low-interest finance, according to a report from Reuters. As a result Chinese investors are forced to turn to commercial lending at higher rates, and therefore require more guarantees from African governments before committing themselves, the report claims. More
At the same time the Financial Times reported that China Development Bank has turned away from its previous strategy of transforming itself into a commercial bank. In future, according to an anonymous CDB official, the bank will ‘continue its "central task" of lending to favoured government infrastructure projects and supporting Beijing's key policies’. More
Voice of America gave a generally positive advance account of this weekend’s FOCAC meeting in Egypt. More
A new study argues that he increasing investment, foreign aid and diplomatic ties with China will hurt Kenya in the long run because of limited joint ownership or local capital in Chinese investments. More
Two Ethiopian academics have a more positive view of China’s impact on their country. More
In the West ‘We still like to see ourselves as saviours, and anxiety about Chinese investment is bound up with the politics of aid’ argues Peter Guest in ‘Why the west fears China in Africa’. More
A black contestant on a Shanghai TV talent show has attracted a barrage of internet abuse because of her skin colour. More
Qatar Holding, the direct investment arm of the Qatar Investment Authority, will soon open an office in China as it seeks to boost its growing investment portfolio in the Far East, its chief executive says. More
In India there are complaints of illegal Chinese workers ‘flooding’building sites. More
Africa leads on climate change
The industrialised countries came under fire on the first day of Barcelona climate talks with African countries, in an unprecedented move, blocking all negotiations on Kyoto Protocol unless the rich nations provided concrete and unconditional targets for greenhouse gas emissions for the mid-term. More
China has warned the European Union not to abandon the principle that rich nations bear a heavier burden in tackling climate change than their developing world counterparts. Chinese Premier Wen Jiabao telephoned European Commission President Jose Manuel Barroso on 2 November to say that for a successful deal to be reached at December's UN climate conference in Copenhagen, technology transfer and sufficient funding from the global north is required. More
Brazil’s president has challenged other world leaders to attend next month’s climate talks in Copenhagen to break the deadlock in negotiations to cut greenhouse gas emissions. Luiz Inácio Lula da Silva said he would speak to Barack Obama, US president, next week to urge him and other leaders to go to Copenhagen on December 16-17, the final days of the talks, to save them from failure. Lula also called on rich countries to promise more money to help poorer countries cut their emissions. More
However a German activist is challenging the assumption that vast sums are needed to pay for poor countries to adopt ‘green technology’. Many of the patents for today's low-carbon technologies -- including some used in wind power and hybrid cars -- are already in the public domain, David Martin argues
‘To big business, Martin is a nuisance because he questions the very validity of some of the vast profits expected from a new climate deal. To governments, his truth is inconvenient because it threatens a delicate relationship with corporate giants they want backing their climate goals’. More
Global economy and China
China is accused of hoarding its stocks of rare earths and precious metals.
Deng Xiaoping, China's legendary reformer, is quoted on a plaque in the lobbyof the main Chinese company in this sector as saying: "The Middle East has oil, China has rare earth."
But there is another side to the story As an article in the German magazine Spiegel points out; ‘It is not, however, due to some quirk of geology that China enjoys a virtual monopoly on special industrial metals. These sought-after resources are also found buried underground elsewhere in the world. In fact, geologically speaking, there should be no shortages at all. The availability of rare metals is more of a question of price. Smelting companies in the West are reluctant to make the substantial investments needed to obtain a few tons of exotic metals, in processes that are both labor and energy intensive. China, with its cheap labor force and lax environmental laws, can afford to extract the materials, however.’ More
Nonetheless, as the Financial Times reported on 5 November, the US, European Union and Mexico have asked for a World Trade Organisation dispute panel to investigate Chinese restrictions on exports of specialised raw materials used in industry. They claim that China’s restraints on exports of bauxite, magnesium and other raw materials, which are used to make steel, aluminium and some chemicals, is driving up the price of end products.
China continues to be slated for tying its currency to the Dollar, thus ensuring that it devalues along with the US currency, with negative inpacts for the EU and for poorer countries. The Financial Times quoted one EU official as summing the situation up thus; “The Americans get the toys, the Chinese get the Treasuries and we get screwed.” However China’s central bank governor Zhou Xiaochuan argued again this week that the policy was a temporary one during the current economic crisis, and reform would continue when it was over. More
The US hit China with another big trade action as it imposed preliminary anti-dumping duties on $2.6bn worth of Chinese pipe imports.The commerce department’s decision to impose duties of up to 99 per cent on imports of some steel pipes is the latest in a string of trade spats between over tyres, cars and chickens. It comes less than a fortnight before President Barack Obama’s first visit to China.
The decision was a victory for steel companies, including US Steel Corporation, that petitioned for the duties in April. The United Steelworkers union said the decision was “an overdue message for thousands of American laid-off workers that trade laws are being enforced”. It says nearly half the domestic industry’s workers have been laid off. More
BROUGHT TO YOU BY PAMBAZUKA NEWS
* Stephen Marks is research associate and project coordinator with Fahamu's China in Africa Project.
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