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Investment

China, India court Africa for resources

BRICS countries are partners, but also rivals when it comes to access to natural resources and global markets. Nowhere is this dilemma as apparent as with China and India in Africa.

The numbers are more than impressive: Trade between China and South Africa has climbed from a meager 1.5 billion dollars 15 years ago to 60 billion dollars today. On top of that, Chinese direct investment in South Africa now totals 10 billion dollars.

South Africa is, by far, China's largest partner on the African continent. For Beijing, South Africa's first-class banking and financial system, coupled with its excellent infrastructure, is the ideal gateway to a booming Africa. China's economic portfolio and overall involvement between Cape Town and Cairo is growing steadily. These include: a trade volume of some 100 billion dollars, gigantic infrastructure measures and a variety of academic scholarship programs.

India is China's biggest competitor

This Oct. 11, 2009 photo shows Chinese workers building a wall at a housing project funded by the Algerian government and built by a state-owned Chinese firm near Algiers, Algeria. While still struggling with the aftermath of a decade-long Islamic insurgency, oil-rich yet impoverished Algeria is getting a makeover: a new airport, its first mall, its largest prison, 60,000 new homes, two luxury hotels and the longest continuous highway in Africa. (ddp images/AP Photo/Alfred de Montesquiou)

Some view China's approach in Africa as 'neo-colonial'

China still maintains the edge in Africa, but coming up fast is India, in second place, with 33 billion dollars in trade volume across the continent today; a figure that is expected to increase to 90 billion by 2015.

When India's Prime Minister Manmohan Singh praised the "new era in African-Indian relations" last year, he could not resist directing a little jab at his rivals from the Middle Kingdom. His country, Singh said, "wanted to employ local labor" - a not-so-subtle allusion to the Chinese practice of bringing its own personnel to Africa. Brazil's president at the time, Luiz Inacio Lula da Silva, had made similar comments earlier, saying his country did not want to be an "imperial power" in Africa but rather "a partner."

China's policies have awakened criticism, even in Africa. In early March, Lamido Sanusi, president of Nigeria's central bank, told the Financial Times that China was contributing to Africa's "de-industrialization and underdevelopment."

"That was also the essence of colonialism. Africa is currently opening itself up voluntarily to a new form of imperialism," said Sanusi, which was why "Africa's romance with China must be replaced by a hardcore economic bottom line."

The growing criticism has alarmed Beijing to the point that it has begun to promote a more positive image of its endeavors in Africa. Certainly, there have been growth problems, admitted China's ambassador in a guest commentary for South Africa's "New Age" newspaper; however, the Chinese-African relationship should be viewed "objectively" because, after all, it can choose its development partners "on its own." And suddenly, that sounded a lot like the original Chinese attitude.

DW-Grafik: Peter Steinmetz

Brazil, Russia, India, China and South Africa are the BRICS

No trade among equals

South African economists have recently warned that the country was developing an unhealthy trade balance. China was extracting natural resources out of Africa, processing them in China and then selling the products back to South Africa. This loop, they said, was leading to an imbalance.

South African President Jacob Zuma is expected to broach this subject with his Chinese counterpart, Xi Jinping, prior to the start of their BRICS summit in Durban on Tuesday, March 26. South Africa would like to see China invest in the processing industry, in technology transfer and the environment sector. "However, the political relationship between the two countries is asymmetrical," notes Mzukisi Qobo, a BRICS analyst and political scientist. "South Africa is not pushing hard enough for concessions."

Old friends: ANC and CPC

(L-R) Brazil's President Dilma Rousseff, Russian President Dmitry Medvedev, India's Prime Minister Manmohan Singh, Chinese President Hu Jintao and South Africa's President Jacob Zuma pose for a photograph during the BRICS summit in New Delhi March 29, 2012. (REUTERS/Yekaterina Shtukina/RIA Novosti/Kremlin)

BRICS leaders demonstrated unity at their last meeting in 2012

The fact that the new Chinese president is using the BRICS meeting in South Africa for his first big international appearance has to do with close ties between the governing African National Congress (ANC) and the Communist Party of China (CPC), which go back a long way. The CPC played a significant role in the ANC's anti-apartheid struggle.

The ideological bond between the two parties is much older than the mere 15 years in which the two countries have had diplomatic ties; reason enough for Xi to underscore his dictum - "good brothers, good friends, good partners " - at the Durban summit.

India, of course, has a certain historical advantage in Durban. India's national hero, Mahatma Gandhi, lived and worked many years here - and he was not alone. The Indian community is large and Durban is often jokingly referred to as the largest Indian city outside India. The Hindu temples, rickshaws and restaurants around the summit venue serving hot curries are a reminder of the influence Indian immigrants have had in Durban over the last 150 years. The Chinese seafarer, Admiral Zheng He, sailed to Africa in the 15th century, but his descendents did not discover the economic potential of the continent until the late 20th century.

DW.DE