China has been a latecomer to African aviation. Even though Ethiopian Airlines started flying to China in November 1973, there were few other air links between Africa and China for 30 years.
The involvement of former colonial powers such as the British, Dutch and French goes back to the 1920s; former Soviet bloc countries began to show interest during the height of the Cold War. And in the last 20 years, Persian Gulf petro-states and their airlines – Emirates, Qatar and Etihad – have become major offshore hubs for a huge range of commercial flights serving Africa.
In my recently published paper I track how China’s involvement has been different.
Official data about the scale and pace of China’s airport projects in Africa are hard to find. In the absence of primary sources, journalistic reporting on current affairs and public projects is the main source of information. These sources can be at variance. And keeping up with developments is evidently difficult.
Despite the absence of accurate, clear and consistent information, the picture that emerged during my research shows considerable Chinese activity directed at modernising, extending and building new airports in Africa. The grandest projects are in resource-rich countries.
None of China’s biggest three airlines (Air China, China Southern, China Eastern) are prominent in African skies.
It is on the ground that China has been flexing its aviation muscles in Africa. This is consistent with China’s 50-or-so years of infrastructure funding and construction on the continent. Energy, water, road and rail infrastructure projects have been the major spheres of Chinese offshore investment in Africa.
Civil airports there have been a recent addition. China’s experience of planning, funding, constructing and managing airports at home stands it in good stead.
Two 2017 reports noted between US$27 billion and US$38 billion currently being spent on or earmarked for spending on 77 construction and associated hardware projects at airports in Africa. China was named in relation to Angola, Ethiopia, Kenya, Nigeria, Rwanda, Senegal and Zambia. The average price for all projects was US$440 million.
At a rough estimate, China accounted for between a quarter and a third of this total airport spending. Excluding unknown expenditure in Ghana, Zimbabwe and the Democratic Republic of Congo, it spent some US$5.7 billion on these airport projects: US$3.8 billion on a new airport outside Luanda (Angola), US$615 million in Maputo, US$360 million in Zambia, US$345 million at Addis Ababa, US$260 million in Mauritius, US$190 million in Sierra Leone, and US$136 million in Mauritania.
The Chinese investment model involves loans and grants, but also, it would seem, part-exchange deals over oil and minerals. These arrangements have more of a resources-for-infrastructure or barter quality.
At the same time Turkish, French, Italian and British contractors have been bidding for airport improvement projects in Africa, and for terminal or runway new-build schemes. These, it would appear, are at a lesser scale, and have greater transparency.
China’s approach may change in the future. That’s if it can neutralise the pivot of Persian Gulf airports at Dubai, Abu Dhabi and Doha. And if it can out-manoeuvre their airlines in global long-haul markets.
It may be more likely that China’s penetration of African civil aviation will occur via partnerships with African airlines, and taking equity shares.
Some of this has already happened. For example, the Hainan corporation in China has reportedly made forays into airlines in Ghana and South Africa, and into a Kenyan all-freight carrier.
Sales to Africa of Chinese-manufactured aircraft have also started. Attendant spare parts stocks are being pre-positioned. In addition, there are plans for Chinese-led aviation technical and managerial training schools in Africa. These will reduce risk of wasted physical infrastructure and of any associated reputational damage.
Some African countries are gearing airport capacity planning to a predicted 5% annual growth in continental passenger numbers by 2035. By that time Africa is expected to be home to eight of the world’s 10 fastest-growing aviation markets. Most African countries don’t have the capacity to prepare for this and will need overseas funds and engineering expertise.
But there are concerns. Any arguments against rampant airport investment in Africa could begin with familiar worries about cost overruns in mega-infrastructure projects, the long-term burden of loan repayments (or default loss of control to foreign owners), the unaffordability of unanticipated maintenance charges, and the inappropriateness of prestige and political vanity projects.
Concerns about corruption, due diligence, accountability, social and environmental disruption plague transport projects wherever they occur.
Another argument against airport mania in Africa – including one that may be levelled against the seductively shiny steel-and-glass ‘aerotropolises’ touted in Nigeria and South Africa – is that these opportunist projects are firmly nation- or city-led (indeed, even regime-led). As such, they don’t necessarily fit into any long-term regional or pan-African programme of integrated infrastructure development.
At a time of chronic resource shortages and stress this is irresponsible. What can be accomplished technically is not always what should be done. There have always been white elephants and rogue elephants in Africa.
The economic and political geography of China’s airport consulting, financing, construction, and management programme in Africa is only now beginning to surface. In future, better statistical information, and richer local information will make for better analysis.
Ghana’s Atewa forest is one of the most beautiful and scenic landscapes in the country. It is seen as the better of only two Upland Evergreen forests left intact in the country, forming part of the six dominant vegetation zones of Ghana based on different climates zones.
The Atewa forest is part of the Guinean Forests of West Africa which stretch from southern Guinea into eastern Sierra Leone and through Liberia, Côte d'Ivoire and Ghana into western Togo. Deforestation has massively reduced the size of the forests and the Upper Guinea Forest is now restricted to a number of more or less disconnected reserves and a few national parks acting as man-made refuges for the region’s biodiversity.
The Atewa forest landscape is remote and pristine, providing the habitat for a major collection of Ghana’s biodiversity. It has been named as one of Ghana’s 30 globally significant biodiversity areas.
But the forest is under threat. Last year Ghana signed a memorandum with China to explore Ghana’s deposits of bauxite – the primary ore in aluminium. The deposits are found in two locations – Awaso with very high deposits in the moist semi-deciduous forest zone of western region of Ghana, and Atewa, with minimum deposits and located in the Upland Evergreen forests in the Eastern Region of Ghana.
Under the memorandum Ghana will cede 5% of its bauxite resources to the Chinese. In turn, Beijing will finance $2billion worth of infrastructure projects that include rails, roads and bridge networks. The Ghanaian Parliament has passed the Ghana Bauxite Integrated Aluminium Industry Act which would provide a legal framework to exploit country’s bauxite deposits.
Yet the government says it still has to validate the true worth of the bauxite deposit in the forest.
As a botanist I view the Atewa landscape as a scientific gold mine. A recent impact assessment by the US Forest Service corroborates the concerns of several conservation groups about the potential damage that mining would cause.
I believe strongly that Atewa is not for mining and that it must be preserved. Firstly, it needs to be preserved as a living natural history laboratory. Secondly, it should be protected because it provides a vital resource – water. Thirdly, it is a precious gift whose value cannot be quantified, but which must be lived, felt and appreciated. Finally it is a naturally bequeathed heritage that must be protected for future generations to enjoy.
An interesting characteristic of the Atewa forest is that the canopies of its trees are not easily visible as they merge with the surrounding clouds creating a beautiful cloud cover line. This is very rare in the Ghanaian landscape. This feature is described in local parlance as the phenomenon in which the trees are in direct communication with the firmament of the heavens and bring good tidings to the ground underneath.
Scientifically, the phenomenon is responsible for the daily condensation of water vapour which falls as precipitation. As a result the mountain top is kept permanently moist. This in turn explains the interesting hydrological networks beneath the soil surface. The water percolates down to create under ground water ways as well as water falls and many streams and tributaries that coalesce or combine to form Ghana’s famous three rivers. These are the Ayensu, Birim and Densu.
The three eventually drain their basins as they meander through the forests and farm fields providing essential water resources to over 5 million inhabitants. They also deposit suspended clay and silt materials as fertile alluvial for crop production during the rainy periods when they burst their banks and overflow.
The Atewa landscape provides rich forest cover for climate regulation, a show piece to illustrate climate adaptation to avoid drought, reduce poverty and enhance sustainable livelihoods and improve human well being in its catchment area.
The landscape has been the subject of research by geologists, hydrologists and geo-morphologists. A geologist studies studies the solid, liquid, and gaseous matter that constitute the Earth while a geo-morphologist studies the earth’s surface. A hydrologist is a scientist who researches the distribution, circulation, and physical properties of the earth’s underground and surface waters.
Studies of the fauna and flora of the area have brought up new scientific discoveries of species like the critically endangered white-naped mangabey Cercocebus lunulatus. This shows that the knowledge of the faunal and floristic diversity and to a large extent the microbial diversity is still at the exploratory stages.
I would strongly argue that the Atewa landscape is an important species discovery destination, awaiting extensive research and studies. It should, therefore, not be disrupted or destroyed by mining.
Google and its operations in China have come under the spotlight in the past few days.
Billionaire investor Peter Thiel last week accused the U.S. technology giant of working with the Chinese military and called for the U.S. government to investigate Google. In response, President Donald Trump said his administration will “take a look” into Google.
The tech giant has denied working with the Chinese military.
Still, the controversy has sparked interest in what Google is doing in China. CNBC took a closer look at Google’s business dealings in China.
Google ended its search product in China in 2010 and is effectively blocked in the country. However, a report emerged last year that the search giant was looking to launch a censored version of its search app in China. The initiative, which the company acknowledged publicly, was in its early stages. In China, all internet services are required to censor information which the government deems sensitive.
However, Vice President for Government Affairs and Public Policy at the company, Karan Bhatia, said this week that Google had abandoned plans for “Project Dragonfly,” the name of its China search product initiative.
So right now, Google is still blocked in China and can only be accessed via a virtual private network (VPN), which helps mask a user’s internet location.
One of Thiel’s accusations is that Chinese spies have infiltrated Google’s artificial intelligence (AI) projects, but he did not provide any evidence.
Google does have AI projects in China though. In 2017, the company opened up an AI research center in China.
On its website, Google says AI research in China is focused on education and so-called natural language understanding — which refers to an AI technique focused on getting machines to understand human language. Google is looking to apply AI to auctioning so that the bidding process for ads can be more efficient. This could be important for Google, which operates an advertising marketplace.
In China, the work is also contributing to AI products that Google makes available globally, such as TensorFlow. This is an open source library that can help other companies develop AI products.
Technology giants such as Alibaba and Tencent dominate the cloud market in China. So Google’s tactic is to try to sell its cloud products to Chinese firms that have international operations in Southeast Asia and elsewhere.
A search of Google job postings in China showed the company is looking for cloud computing engineers, data managers, sales and business development roles across Beijing, Shanghai and Shenzhen.
The company is also hiring people to target customers in specific industries — from media and entertainment to manufacturing.
Google sells a number of hardware products including smartphones, smart speakers and thermostats, under the Nest brand that it owns. Some of that is manufactured in China.
The company is currently advertising roles for engineers to test products and for manufacturing and supply chain managers. On LinkedIn, a number of Google employees in Shenzhen, a key technology hub in China, listed their jobs as hardware-related.
However, Bloomberg reported in June that Google was moving the production of some Nest thermostats and server hardware out of China to avoid tariffs from the U.S.
App developers and the Google Play Store
The Google Play Store, the company’s app store, is blocked in China. So Google is trying to work with app developers in China to help them bring their products onto the Play Store in international markets.
Under its job listings, Google advertised for two roles for a business development manager related to the play store.
“As a Business Development Manager of Google Play, you will empower developers to build successful businesses on Play/Android globally, and inspire the ecosystem to innovate on/invest in Android and Play,” the job description reads.
Google also has individual roles for the gaming section of the Google Play store. Games are a huge part of its app store.
Advertising is a core part of Google’s revenue but because its services are blocked in China, it can’t really sell ads on those platforms there. So the company focuses on Chinese businesses looking to advertise on Google platforms abroad, whether that is on its search engine, YouTube or something else.
One job that’s being advertised is for a business development consultant in Shanghai who will be “responsible for driving business growth and attracting new medium to large size advertisers for Google.” There are also people focused on getting advertisers from specific industries like retail or entertainment.
Overall, Google’s business in China is mostly aimed at getting Chinese companies to use its products outside of China.
Credit: CNBC AFRICA
The Chinese government convened top tech companies this week and warned them of consequences if they cut off technology sales to the country, US media reported.
The meeting followed US President Donald Trump's move last month to blacklist Chinese tech giant Huawei over national security concerns, threatening the firm's global ambitions and ramping up the months-long trade battle between the two countries.
Earlier this week, the Chinese government summoned executives from American firms Dell and Microsoft and South Korea's Samsung, among others, to warn them that any moves to ramp down their businesses in China may lead to retaliation, The New York Times reported.
American companies were told "that the Trump administration's move to cut off Chinese companies from American technology had disrupted the global supply chain, adding that companies that followed the policy could face permanent consequences," the newspaper reported.
Companies based outside the United States were told that as long as they maintained business as usual, they wouldn't be punished, the newspaper reported.
Last Friday, Facebook announced it would cut Huwaei off from its popular social networking app to comply with the US sanctions, further isolating the company that has become the world's second-largest smartphone vendor.
Google made a similar announcement in May.
Washington and Beijing resumed their trade battle last month when negotiations in the US ended without a deal and US President Donald Trump raised tariffs on $200 billion in Chinese goods.
Beijing retaliated with its own tariff hike on billions of dollars worth of US goods.
The US move to cut Huawei off from American hardware came next, but was delayed by 90 days to prevent economic disruptions.
Chinese firms are eyeing partnerships with Turkish construction firms in Africa and are also looking to take stakes in Turkish companies, the head of the Turkish Contractors Association said.
Mithat Yenigun said he had discussed possible acquisitions by Chinese companies with a Chinese business representative, without giving details of which firms could be involved.
“They asked if we could sell stakes or cooperate,” he told Reuters. “They want to partner up with us, they are very willing to work with us. They also have unlimited money. That is what we lack.”
Turkish firms, which thrived in a domestic economy fueled for years by cheap credit and a construction boom, are now faced with economic recession at home. Those that took out foreign currency loans have found their debts soaring as the Turkish lira slumped last year.
Turkish contractors are second only to Chinese companies in terms of international contracts, according to the Engineering News Record (ENR) which carries out annual surveys of the world’s top contractor companies.
Yenigun said Chinese firms had a 10-15 year headstart in Africa. They now see Turkish firms as potential rivals, he said, but are also looking for opportunities to work together. He gave no specific examples of companies or projects but said that Chinese contractors want to work in projects in sub-Saharan countries with Turkish companies.
Turkish contractors had proved themselves in the region, Yenigun said, with large infrastructure projects which provide jobs by employing local workers during construction.
CONFLICT HITS CONTRACTS
At their peak, Turkish companies won around $30 billion worth of international contracts a year in 2012 and 2013, according to the contractors association. Business declined as conflict in Libya and Iraq cut back infrastructure projects there, and strained ties with Moscow affected business with Russia.
Last year Turkish contractors registered $19.4 billion of work abroad, with Russia accounting 25% of those projects and Saudi Arabia another 19%. Since the killing of Saudi journalist Jamal Khashoggi, a critic of Saudi Crown Prince Mohammed bin Salman, in the kingdom’s consulate in Istanbul last year, relations between Ankara and Riyadh have deteriorated.
Approval processes for construction tenders won in Saudi Arabia now take longer than they used to, Yenigun said.
“We feel the coldness when it comes to the relations with the government. An official process that previously took three months, now takes a year over there,” Yenigun said.
Turkish companies now aim to reach an annual volume of $50 billion with potential business in Africa, Russia, and Iraq, where they hope Ankara’s pledge of $5 billion credit for the reconstruction will boost business.
Turkish contractors are expected to build roads, highways, railways, Mosul airport, a hospital as well as mosques and residence projects.
President Donald Trump said on Friday there was "a very good chance" the United States would strike a deal with China to end their trade war and that he was inclined to extend his March 1 tariff deadline and meet soon with Chinese President Xi Jinping.
U.S. and Chinese negotiators had made progress and will extend this week's round of negotiations by two days through Sunday, Trump told reporters at the White House as he met with his top negotiators and their counterpart, Chinese Vice Premier Liu He.
"I think that we both feel there's a very good chance a deal will happen," Trump said.
Liu agreed there had been "great progress".
"From China, we believe that (it) is very likely that it will happen and we hope that ultimately we'll have a deal. And the Chinese side is ready to make our utmost effort," he said at the White House.
The Republican president said he probably would meet with Xi in March in Florida to decide on the most important terms of a trade deal.
Extending the deadline would put on hold Trump's threatened tariff increase to 25 percent from 10 percent on $200 billion (153 billion pounds) of Chinese imports into the United States. That would prevent a further escalation in a trade war that already has disrupted commerce in goods worth hundreds of billions of dollars, slowed global economic growth and roiled markets.
Optimism that the two sides will find a way to end the trade war lifted stocks, especially technology shares. The S&P 500 stock index reached its highest closing level since Nov. 8. Oil prices rose to their highest since mid-November, with Brent crude reaching a high of $67.73 a barrel.
Trump and Treasury Secretary Steven Mnuchin said the two sides had reached an agreement on currency. Trump declined to provide details, but U.S. officials long have expressed concerns that China's yuan is undervalued, giving China a trade advantage and partly offsetting U.S. tariffs.
Announcement of a pact aimed at limiting yuan depreciation was putting "the currency cart before the trade horse," but would likely be positive for Asian emerging market currencies, said Alan Ruskin, global head of currency strategy at Deutsche Bank in New York.
"How can you agree to avoid excessive Chinese yuan depreciation or volatility if you have not made an agreement on trade that could have huge FX implications?" Ruskin asked in a note to clients.
In a letter to Trump read aloud by an aide to Liu at the White House, Xi called on negotiators to work hard to strike a deal that benefits both country.
Trump said a deal with China may extend beyond trade to encompass Chinese telecommunications companies Huawei Technologies and ZTE Corp.
The Justice Department has accused Huawei of conspiring to violate U.S. sanctions on Iran and of stealing robotic technology from T-Mobile US Inc.
Chinese peer ZTE was last year prevented from buying essential components from U.S. firms after pleading guilty to similar charges, crippling its operations.
MEMORANDUMS NO MORE
Trump appeared at odds with his top negotiator, U.S. Trade Representative Robert Lighthizer, on the preliminary terms that his team is outlining in memorandums of understanding for a deal with China. Trump said he did not like MOUs because they are short term, and he wanted a long-term deal.
"I don't like MOUs because they don't mean anything," Trump said. "Either you are going to make a deal or you're not."
Lighthizer responded testily that MOUs were binding, but that he would never use the term again.
Reuters reported exclusively on Wednesday that the two sides were drafting the language for six MOUs covering the most difficult issues in the trade talks that would require structural economic change in China.
Negotiators have struggled this week to agree on specific language within those memorandums to address tough U.S. demands, according to sources familiar with the talks. The six memorandums include cyber theft, intellectual property rights, services, agriculture and non-tariff barriers to trade, including subsidies.
An industry source briefed on the talks said both sides have narrowed differences on intellectual property rights, market access and narrowing a nearly $400 billion U.S. trade deficit with China. But bigger differences remain on changes to China's treatment of state-owned enterprises, subsidies, forced technology transfers and cyber theft of U.S. trade secrets.
Lighthizer pushed back when questioned on forced technology transfers, saying the two sides made "a lot of progress" on the issue, but did not elaborate.
The United States has said foreign firms in China are often coerced to transfer their technology to Chinese firms if they want to operate there. China denies this.
The U.S. Chamber of Commerce on Friday urged the U.S. government to ensure the deal was comprehensive and addressed core issues, rather than one based on more Chinese short-term purchases of goods.
China has pledged to increase purchases of agricultural produce, energy, semiconductors and industrial goods to reduce its trade surplus with the United States.
China committed to buying an additional 10 million tonnes of U.S. soybeans on Friday, U.S. Agriculture Secretary Sonny Perdue said on Twitter. China bought about 32 million tonnes of U.S. soybeans in 2017. The commitments are a "show of good faith by the Chinese" and "indications of more good news to come," Perdue wrote.
China was the top buyer of U.S. soybeans before the trade war, but Beijing's retaliatory tariffs on U.S. soybeans slashed business that had been worth $12 billion annually.