CharlesVermeulen.com - Weblog Charles Vermeulen: China Rising

Plea for more European Cooperation · 6 August 2007, 14:39 CET by Charles Vermeulen

In an interview in M (August 2007, pages 10-13), Dutch newspaper NRC Handelsblad’s monthly, British politician / diplomat Paddy Ashdown states that the United States will turn into a disconcerted and inward-looking country after withdrawing from Iraq. What does this mean for Europe? Ashdown provides the opponents for more European integration in the fields of foreign policy and defence with something to chew on:

"(...) In a time of globalization real isolationism is unimaginable, but we must ask ourselves what a more inward-looking America means to us. An assertive Russia and a more and more assertive China are ready to claim all the room the U.S. leaves open. Because of this Europe will end up in an inconvinient position. The days are really over that we could join with the Americans for our security and involvement in the outside world for free. Add to this that the economic power of the Asian world is growing. As European countries we could respond to this in two ways: by continuing to refuse to attune our foreign and defence policy, or by accepting that the world has changed and by seeking each other’s support and pulling together. Unfortunately, I wasn’t able to win the debate about more European cooperation with intellectual arguments – but in a world that is much more chilly for Europe it has taken on a new urgency."

(Note that I had to translate Ashdown’s words from Dutch into English, while the Dutch version of his words is in turn a translation from English into Dutch, because, unfortunately, the Dutch version was the only version that was available to me.)

ashdown, china, europe, european cooperation, european integration, paddy ashdown, russia

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People's Bank of China Buys Stake in BG Group · 2 August 2007, 11:44 CET by Charles Vermeulen

Between June 15 and July 13 the People’s Bank of China (PBOC), China’s central bank, has purchased a 0.46% interest in UK gas giant BG Group, allegedly on behalf of a Chinese sovereign wealth fund, which will be probably named ‘China Investment Corp’ (CIC) and which is ‘being set up to manage $200 billion of China’s $1.33 trillion in foreign exchange reserves’. According to Eurasia Group this ‘CIC will almost certainly increase its very small initial investment in BG Group, raising the prospect of a potential future takeover bid’. Read more about it in ‘China buys 0.46 pct of Britain’s BG Group’, a Reuters report.

bg group, china, china investment corp, cic, pboc, people's bank of china, sovereign-wealth funds

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On the Rise of Sovereign-Wealth Funds · 1 August 2007, 11:33 CET by Charles Vermeulen

"[Sovereign-wealth funds] are getting bigger and bolder. They have some $1.5-2.5 trillion to play with, according to America’s Treasury, a sum expected to grow fast. Although sovereign funds began investing conservatively, the Barclays deal shows that they can provide an attractive source of funding for mergers and acquisitions. Some sovereign funds are also getting into the buy-out business. Yet little is known about these funds." (The Economist, ‘Sovereign-wealth funds. China takes the bank. How sovereign investors plan to operate’, July 26, 2007)

To make possible a higher offer on the biggest bank of the Netherlands, ABN Amro NV, UK bank Barclays has called in the assistance of the China Development Bank (CDB) and Temasek, the investment company owned by the Singaporean government. CDB and Temasek have invested € 3,6 billion and will invest another € 7,6 billion if Barclays actually succeeds in beating the competing consortium consisting of Royal Bank of Scotland, Fortis and Banco Santander and taking over ABN Amro. In ‘Sovereign-wealth funds. China takes the bank. How sovereign investors plan to operate’ The Economist lines up some pro’s and risks of these so-called ‘sovereign-wealth funds’. More interesting reading material on the subject: ‘Barclays Deal Spurs Drive to Limit Government-Fund Investments’, an article by Ben Sills and Simon Kennedy on Bloomberg.com.

abn amro, barclays, cdb, china, china development bank, netherlands, royal bank of scotland, sovereign-wealth funds, temasek

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On Africa's Growing Geopolitical Importance · 16 June 2007, 14:18 CET by Charles Vermeulen

"In 2005, the US imported more oil from the Gulf of Guinea than it did from Saudi Arabia and Kuwait combined. Within the next ten years it will import more oil from Africa than from the entire Middle East." (Christopher Thompson, ‘The Scramble for Africa’s Oil’, New Statesman, 18 June 2007, 24-26)

Instability in the Middle East which threatens to spill over to Africa, ‘resource nationalism’ in Russia and South America, the growing importance of Africa’s west coast oil fields to Europe and the U.S. and China’s rising presence in the region – all compell the U.S. to form a new Africa strategy in which oil and counter-terrorism will be the key components and which will culminate in the establishment of Africom, a unified military command for Africa that must be operational before mid-2008. Read more about it in Christopher Thompson’s ‘The Scramble for Africa’s Oil’, a report in the New Statesman.

africa, africa strategy, africom, china, europe, oil, resource nationalism, russia, united states

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The Economist on the Chinese Presence in Africa · 29 October 2006, 16:20 CET by Charles Vermeulen

"(...) [S]ome Africans look on China as a development model, replacing the tough Washington Consensus with a ‘Beijing Consensus’: China’s economic progress is cited by statists, protectionists and thugs alike to ‘prove’ that keeping the state’s grip on companies, trade and political freedoms need not stop a country growing by 8%-plus a year."

This week’s edition of The Economist has dedicated two interesting articles to the pros and cons of the Chinese presence in Africa: ‘In the ‘China in Africa. Never too late to scramble’ and ‘Africa and China. Wrong model, right continent’.

africa, beijing consensus, china, china in africa, the economist

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Chinese Companies in Namibia · 28 October 2006, 16:15 CET by Charles Vermeulen

"There have been reports about unstable labour relations between Chinese employers and their Namibian workers. Workers complain of low wages, verbal abuse and unfair dismissals. Have some of these concerns ever been brought to the attention of the Embassy?" (Mbatjiua Ngavirue interviewing Chinese Ambassador to Namibia Liang Yinzhu, October 25, 2006)

An interview by New Era reporter Mbatjiua Ngavirue with Chinese Ambassador to Namibia Liang Yinzhu gives some insight in the activities of Chinese companies in Namibia and the difficulties sometimes attendant on these activities.

africa, china, kaunda, liang yinzhu, namibia

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Africa's Best Friend or 'Neo-Colonial' Intruder? · 28 October 2006, 10:00 CET by Charles Vermeulen

In the previous posting I mentioned the western criticism, on the eve of the Sino-African Summit, that China ‘ignores environmental standards in Africa and that it deals with governments with poor human rights records’. However, different views on the Chinese presence in Africa coexist as both cases below may show.

On the People’s Daily Online, the web edition in English of ‘the official newspaper of the Communist Party of China’, Kenneth Kaunda, the first president of Zambia dismisses the critism. According to Kaunda ‘China was an all-weather friend to African people and it is still now. African leaders and their people will not be cheated by lies that China’s presence in Africa is neo-colonialism’. Kaunda points to, among other things, the TAZARA (Tanzania-Zambia Railway Authority) railway, built ‘under Chinese assistance both financially and technically in the 1970s’, which connects Kapiri Mposhi in land-locked Zambia to Tanzania’s Dar es Salaam port. The TAZARA railway offered copper-rich Zambia a major, alternative transport conduit as as a result of which the country was no longer dependent on the railways of the neighbouring apartheid regimes for sea-access.

On the other hand, besides from human rights and environmental issues, the South African newspaper Independent Online (IOL) reported that Chinese ambassador in South-Africa Liu Guilin sent a rather harsh message to the South African textile industry during a lecture at the University of Pretoria last Wednessday: China grants it two years to adjust to Chinese competition and it deems import quote unacceptable after that time. The Chinese government had agreed upon import quota earlier this year.

So, then how to value the Chinese presence in Africa? Is China Africa’s best friend or a ‘neo-colonial’ intruder?

africa, china, kaunda, liu guilin, neo-colonialism, sino-african summit, south africa, tazara, zambia

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China in International Trade and Human Rights · 27 October 2006, 08:13 CET by Charles Vermeulen

The article in Voice of America which I mentioned in the previous posting contained, by the way, a short reaction by China’s Vice Foreign Minister Zhai Jun on the allegations that China ignores environmental standards in Africa and that it deals with governments with poor human rights records like Angola and Sudan:

"You should know that we adhere to the principles of peaceful coexistence, the most important of which is to not interfere in other nations’ internal affairs. We believe that by developing trade cooperation with other countries, especially with African countries, we are benefiting their development."

In the fall of 2005 U.S. Deputy Secretary of State Robert B. Zoellick urged ‘China to become a responsible stakeholder’ in the ‘international system’. Clearly the country has a long way to go.

africa, china, human rights, responsible stakeholder, robert b. zoellick, zhai jun

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On China's Role in International Trade · 26 October 2006, 19:45 CET by Charles Vermeulen

Today I came upon two interesting reports which both seem to underline once more China’s role in international trade. To start with a recent survey by Loyens & Loeff, ‘an independent full service law firm with integrated corporate law and tax practices’ based in the Benelux, which showed that Chinese investors ‘favour Europe for expansion (60%) over the United States (43%) and Asia (29%) and that ’[w]ithin Europe, the preferred countries are the Netherlands and Germany (22%), followed by France (18%) and Belgium-Luxembourg (16%)’. Furthermore, it appeared from the survey that ‘Chinese investors hope primarily to acquire distribution networks and access to new markets’.

Secondly, I came upon a report published today by Voice of America according to which China has stated that it ‘is negotiating as many as 2,500 trade deals with some 40 African nations ahead of a Sino-African summit in Beijing next week’. The report also pointed to the fact that ‘China is looking to [Africa] as a source of energy, new markets and investment opportunities’, but ‘unlike with the U.S. or the European Union, China buys from Africa far more than it sells’.

africa, beijing, china, europe, germany, international trade, loyens & loeff, netherlands, sino-african summit, united states

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Wind Energy Use in China and India · 28 September 2006, 07:06 CET by Charles Vermeulen

"Not even on the list of the world’s top 10 wind turbine manufacturers as recently as 2002, Suzlon passed Siemens of Germany last year to become the fifth-largest producer in terms of installed megawatts of capacity."

The New York Times on the ‘Ascent of Wind Power’ in India and China.

china, energy, india, siemens, suzlon, wind energy, wind power

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