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Daily Telegraph: Monday view: The West must handle with care China’s growing interest in Africa

EXTRACT: Pity poor Shell, which had its own plans for Block 18. Shell’s chief, Jeroen van der Veer, griped about the cut-throat competition last week, though he was careful not to accuse the Chinese openly of abusing state aid. “There are new players, some of them state-owned, prepared to pay top dollars,” he said.

THE ARTICLE

By Ambrose Evans Pritchard
Last Updated: 12:20am GMT 05/02/2007

The new Cold War between China and the United States is taking shape, in Africa. Last week the US Defence Department quietly launched its first military command dedicated to black Africa and the Sahara – until now a forgotten annex of the Pentagon’s European and Mid East operations.

Known as “AFRICOM” it is ostensibly designed to fight al-Qa’eda and cope with natural disasters. It is equally aimed at Beijing, a warning that the Communist regime will meet resistance if it tries to bottle up a large chunk of the world’s oil, gas, and mineral reserves – not to mention its arable land, the strategic prize a decade hence as food runs short.

Over 10pc of America’s oil imports now come from Africa, a figure expected to rise to 25pc in short order. Much of the world’s scarce uranium, platinum, chromium, cobalt, and copper are to be found there.

Yet China needs the stuff too. It is now the world’s second biggest market for oil, consuming 7.5m barrels a day – up from around 4.5m five years ago. By 2020 it will have some 140m cars, needing 13m barrels a day.

China has not hidden its designs on the continent. It hosted 48 African leaders in Beijing last November, pledging a fresh $5bn of investments in mines, roads, railways, and oil rigs. Trade with Africa ballooned 40pc last year to $55.5bn.

Chinese president Hu Jintao is currently on a 12-day tour of Africa, culminating in a visit to the pariah regime of Sudan – Sharia-law zealots accused of instigating genocide in Darfur, and practising slavery against Christians. Sudan sells half its total oil output to China.

In Angola, the Marxist government escaped the irksome constraints of an IMF loan – with its demands on transparency and fraud – when China’s Eximbank offered $2bn at 1.5pc interest rates over 17 years and promises of more to come. It came with a “non-intervention” clause, a despot’s dream.

This paved the way for China’s state oil company Sinopec to bid for oil Blocks 17 and 18, together containing reserves of 4.5bn barrels of crude. Angola now provides 7pc of China’s oil.

Pity poor Shell, which had its own plans for Block 18. Shell’s chief, Jeroen van der Veer, griped about the cut-throat competition last week, though he was careful not to accuse the Chinese openly of abusing state aid.

“There are new players, some of them state-owned, prepared to pay top dollars,” he said.

China is playing the same game in Gabon, Equatorial Guinea, and above all Nigeria, where Beijing has agreed to spend $4bn revamping the Kaduna oil refinery and building a string of factories, shopping malls and roads. For this it won right of first refusal to four oil-exploration blocks.

Wherever crude is to be fund, and dodgy leaders rule, Beiijing is at hand with soft credit – ethics be damned. But then China, lest we forget, is itself a Maoist autocracy kept in power by police repression and politicised loans.

“We’ve spent 15 years working on conventions against corruption and now the Chinese come in and they haven’t signed up to any of it,” said Zainab Bangura, head of Sierra Leone’s National Accountability Group.

All the efforts of Bono, Geldof, Oxfam, and a chastened World Bank, to stop African development going off the rails again are being undercut at a stroke.

Europe is already preparing to throw in the towel. “The competition of the Chinese banks is clear. They don’t bother about social or human rights conditions. We have to think about the degree of conditionality we want to impose,” said Philippe Maystadt, head of the European Investment Bank, the EU’s giant lending arm.

For Africans it is a giddy time. Long patronized, or neglected, they are now being courted avidly by the great powers, with every chance that they could start to enjoy the stellar growth rates of Asia’s tigers.

If they can resist the “Resources Curse”, and if they can preserve civic rigour as the easy money showers down on the elites.

South Africa’s president Thabo Mbeki has warned against the slide into a new “colonial” subservience, while Zambia’s elections last autumn were more or less fought over Beijing’s role in the country.

Opposition leader Michael Sato accused the Chinese of propping up the ruling party and exploiting Zambia as a dumping ground for cheap goods, driving local producers out of business. Mobs rampaged through Lusaka after he lost – by fraud, they said, burning Chinese-owned shops.

Beijing is now seeking discreet advice from the Foreign Office over how to manage its projects in Africa and cause less offence to world opinion.

But this is the same government that is fast building an offensive navy spearheaded by 50 attack submarines – unsettling Japan – and that has just smashed a satellite in space with a kinetic missile – unsettling America.

Those wise old birds Bismarck and Disraeli prevented the last scramble for Africa escalating into conflict, soothing tempers at the Berlin Conference in 1884.

It did not last. Europe came to the brink of war over Fashoda in 1898, and again when Kaiser Wilhelm sought to test British naval power by sending a warship into Agadir in 1911.

Rising powers become dangerous when they try to build empires, especially if they are militaristic dictatorships. The world must handle China with great care.

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http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/02/05/ccview05.xml

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