Li Keqiang, China’s Premier (along with his wife), made an official visit to Africa recently. A surprising face, Chen Hong, a professor of English at the Capital University of Economics and Business, made a guest appearance, as well.
This trip wasn’t business as usual, however. Typically, such occasions are driven by lucrative business contracts for Africa’s rich mineral resources. That’s not entirely true this time…
Lend a Helping Hand
This time around, China’s Premier is investing in the long haul, offering technology and aid:
“Financial support is vital for practical co-operation. China has decided to increase its commitment to providing credit lines to African countries by $10 billion, to reach a total of $30 billion.”
Li has four top African countries on his mind: Ethiopia, Kenya, Angola and Nigeria. He’s already committed to attending Africa’s version of the World Economic Forum (WEF), which takes place in Nigeria’s capital. It goes without saying, those in Africa seeking economic growth will welcome Li with open arms. Aly Khan Satchu, a Kenyan economic analyst, adds:
“The Chinese basically have very deep pockets and are able to put their money to work. So for a leader of a country, China can be a game changer because you could have your projects, which were fantasy projects 10 years ago, but the Chinese can come in and say – ‘Okay we think it’s a good idea, let’s do it.’ And I think that is what the African leaders appreciate. Plus, China has an attitude towards governments that maybe Western policy – Western governments don’t have.”
Chinese money is the backbone for much of Africa’s infrastructure, with $1 billion spent towards Ethiopia alone, focusing strongly on roads, rail and telecoms…
The Real Game Changer
But China’s involvement isn’t always welcomed… as some believe the pursuit of raw materials is a hindrance for Africa’s economic growth. On the other hand, it could be a counterbalance to Western influence, according to some who also expect a more balanced trade relationship to emerge. Aly Khan Satchu speaks a little more on this growing relationship:
“It hasn’t evolved into a grown-up relationship, if you look at the stock market, the stock market still today 52, 54% of the companies are owned by British companies. There is not a single Chinese stock holder that I know, the Chinese investment arm, which is the sovereign investment fund, I don’t know if they have invested on the continent.”
This most recent visit may mark the beginning of a new investment strategy by China. And that’s the real game changer.
And “the chase” continues,
Oil & Energy Daily Research