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FACTBOX-China's growing business in Africa

Published 02/12/2009, 11:04 AM
Updated 02/12/2009, 11:08 AM
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Feb 12 (Reuters) - Chinese President Hu Jintao began a tour of four African states on Thursday to deepen Beijing's trade and investment links with the poorest continent.

His trip will take him to Mali, Senegal, Tanzania and Mauritius.

Here are some details of China's growing business in Africa:

Trade between the two has jumped in the past decade, driven by China's resource needs and growing African demand for cheap Chinese-made products. In 2008, total Sino-Africa trade was $106.8 billion, up 45.1 percent on 2007.

China's imports from Africa were $56 billion in 2008, and its exports to African states were $50.8 billion. China's imports from Africa are dominated by oil and mineral shipments from Angola, Sudan, Nigeria, Zambia, the Democratic Republic of the Congo and its smaller neighbour, the Republic of the Congo.

Chinese and Indian firms have expressed interest in taking over Zambia's top cobalt producer Luanshya Copper Mines since it halted operations in December, according to Zambian state media.

China Non-Ferrous Metals Corporation is opening a copper smelter in Chambishi town, which Zambia has transformed into a tax-free economic zone to attract Chinese investment.

In Liberia, China Union has signed a $2.6 billion contract to develop the Bong iron ore deposit.

However, the global slowdown has forced some Chinese businesses to close operations in Africa and prompted a re-think of some of its multi-billion-dollar deals in the continent.

Democratic Republic of Congo and Guinea are cases in point.

DR Congo rode the boom in commodities to attract foreign investment in its rich but long-neglected copper, cobalt, gold, resources after post-war elections in 2006. Now that dream is fading.

A much-trumpeted $9 billion package of Chinese loans, investment and infrastructure projects in return for Congolese minerals contracts could be cut back to $6 billion, according to a diplomat in Kinshasa, partly to appease the IMF which has voiced concern at Congo taking on such huge debts.

Guinea, the world's top exporter of bauxite aluminium ore, had hoped for its own multi-billion-dollar deal with China to build hydropower dams, roads and bridges in return for mines.

Talks have dragged as the economic climate has worsened, hampered by Guinea's instability and a coup in December after the death of President Lansana Conte, says Ahmed Tidiane Diallo, director-general for mining projects at the Mines Ministry.

Gabon, similarly eager to cement a 1.6 trillion CFA franc ($3 billion) contract to develop the 360-million-tonne Belinga iron ore deposit, has accused its Chinese partners of dragging their feet amid the uncertain economic environment.

Beyond mining, Chinese state companies are pushing ahead with strategic energy sector investments and infrastructure; private outfits are continuing to expand in technology areas.

Trade with Angola, China's biggest source of African crude oil, reached $25.3 billion in 2007 and Beijing has offered Luanda $5 billion in oil-backed loans.

In Nigeria, China's Shenzhen Energy Group plans to build a 3,000 megawatt power plant at an estimated cost of $2.4 billion.

(Writing by James Jukwey; Editing by Keiron Henderson and Richard Balmforth)

(Sources: Reuters; China Monthly Exports and Imports data)

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