Chinese President Hu Jintao has promised to reduce China's $3 billion trade imbalance with Africa by increasing imports and promoting Chinese investment in African industry. He claims to be sincerely committed to Africa's long-term development, a true friend of the African people.
That's a lot of hooey--and Hu knows it.
China's Africa policy is a model of modern-day mercantilism with Chinese characteristics. Chinese investment and trade--and China's flag and arms--are all wrapped up in a single package. One does not follow the other.
Economic aid, including grants, loans and credits, and various forms of technical assistance, go hand in hand with commitments to develop oil fields, build refineries, roads, and railroads ... and, as shown by China's deepening involvement in genocidal Sudan, supply weapons regardless of a nation's human rights record or lack of transparency.
Prestige projects--a presidential palace here, a football stadium there--are also offered, along with no-strings arms deals, except for supporting China's position on Taiwan. Human rights and transparency are simply irrelevant.
State owned companies are key to China's Africa policy. In contrast with Western firms, Chinese companies answer to China's ruling Communist Party, not stockholders, even if some of the firms have sold minority stakes to investors in order to float and list shares in Hong Kong or New York.
Like Chinese capitalism--or Chinese socialism, for that matter--the state-owned behemoths that have gone public only resemble the real thing. Commissar-style spies and executives are assigned to every company to watch over senior management; and the State-Owned Assets Supervision and Administration Commission of the State Council, which holds controlling interests in roughly 200 large Chinese companies, monitors performance.
In other words, China's state-owned companies are tools of the state. As such, they do not invest overseas simply to make money; rather, they invest to augment the power of the state and support state policies. In Africa, this mainly means investing (a) to lock in longterm access to oil and minerals, and (b) to open up and expand markets for cheap Chinese goods.
All told, Africa is now home to more than 1,000 Chinese investment projects.