Africans In China

by Riaan Meyer*

THE dramatic events of the past few weeks, starting with one of the world’s most powerful investment banks — Lehman Brothers — going to the wall and insurer AIG teetering on the brink, has left a wounded western financial world licking its wounds and looking anew at its model of global finance.

Western finance is bound to change dramatically in the next few years. With depleted balance sheets and heightened credit adversity, the void will probably be filled by new players, notably from China and Japan. This could have important implications for Africa, where the resource boom could lead to attractive opportunities for Chinese banks.

While China has already bought into a number of international financial institutions (including Barclays, Morgan Stanley, JC Flowers), Japanese banks moved quickly to take advantage of the carnage on Wall Street to beef up their presence in investment banking. Mitsubishi UFJ has agreed to take a 10%-20% stake in Morgan Stanley, and Nomura says it will buy the Asia Pacific operations of Lehman Brothers for $225m. And with cash not a problem and subprime exposure a relatively alien concept, Asian banks are poised to expand their global presence further.

For China, expansion into the developed world is fraught with political danger, especially in the US, where suspicion of foreign (and particularly Chinese) investment in big US corporations runs deep. So the alternative is to follow patterns of trade, and this points in one direction: emerging markets, particularly Africa.

The case for China’s rapid expansion of trade relations with Africa ($72bn at the end of last year) is premised on the need for resources security to ensure continued rapid economic growth. Hence, its biggest trading partners are commodity rich countries of Africa: Sudan, Angola, Nigeria and SA.

The format of getting to the commodities has been innovative, but based mostly on the Chinese extracting resources alone or forming joint ventures with governments, such as the Chambishi copper mine in Zambia, or taking stakes in existing projects, such as a 45% stake in an offshore Nigerian oil field by China National Offshore Oil Corporation.

Deals financed in Africa have been mostly through the China Exim Bank in trade finance and project finance. While details of the financing terms are not readily available, it appears from a World Bank study that a great many, if not most, were priced on favourable terms for the recipient countries, and function essentially as an extension of Chinese aid.

But in some cases China has started co-operating with western banks to do project finance deals, including Sinopec (China Petrochemical Corporation) financing for its joint venture with Angola’s Sonangol for offshore block 18. After initial western banking reticence, the deal attracted a range of western and Chinese bank participation and the political risk of Angola was seen to have been mitigated by the size of Chinese participation.

The China Development Bank assumes an even more important role, in concert with the China Exim Bank, through investment in the $5bn China-Africa Development Fund. It will be used mainly to support African countries’ agricultural, manufacturing and energy sectors, and the development of Chinese enterprises in Africa. The fund signed its first deals with four Chinese companies in Beijing in January to invest in infrastructure and housing projects in Africa.

Traditionally, the presence of banks in emerging markets can be traced to colonial ties. Proximity is an important factor, and this refers not only to geographic proximity but also to proximity in terms of cultural, linguistic and economic ties. These factors seem to rule out a Chinese banking foray into Africa. At the same time, China has no colonial baggage to render — at least until recently — its economic decisions subject to political controversy in Africa, and it could well be in a good position to exploit growing opportunities.

But the banking market in Africa remains underdeveloped, and poses challenges for institutions hoping to land increasing market share. Banks will need to develop payment and processing systems to handle international transfers and data-capturing and management information systems to process such data. Crucially, operational and credit risk systems will need to be enhanced.

One of the main aims of the Chinese government in opening the banking system to foreign investment has been to gain the necessary expertise to become highly competitive. But in local markets, and especially emerging markets, local banks may well have an advantage in market information given superior access to corporations, superior relationships and a better understanding of local market conditions.

This implies that a foreign bank with little experience in entering foreign markets will need to take a cautious approach. It is likely to start with a fundamental understanding of the key players in the local market, and to approach such institutions with an understanding to co-operate, start joint ventures and eventually to make equity investments. This has been the approach of foreign banks in entering the Chinese banking market.

It came as a surprise, then, when one of the first meaningful investments of a Chinese bank was the 20% stake in SA’s Standard Bank, for $5,5 billion. This was a significant outlay, even for ICBC, as the finance equates to 8% of its capital. The reasoning seems sound from a strategic point of view; ostensibly, Standard Bank will help ICBC serve its corporate customers in Africa, while Standard Bank will gain a foothold in China. The funds that Standard Bank obtained will be used in its further expansion in Africa — Angola and Nigeria in particular — and a private equity fund will be set up.

It is apparent from this that Standard Bank will target growth outside its home market, and will be well placed to target Chinese corporate customers operating in Africa. This presents it with a significant opportunity to consolidate its operations in Africa, and take a large share of business from Chinese clients who will increasingly be important in this area. This puts it at a significant advantage to many other competitors. The timing of the deal also appears to be fortuitous; for many of the potential competitors, risk appetite will decline as liquidity remains under strain.

In China, however, liquidity remains abundant. It seems the Standard Bank deal will be the benchmark investment approach for Chinese banks in emerging markets; target the bigger, better developed institutions with multi-country presence first. For Chinese banks, continuing to acquire stakes in well managed and bigger African banks will seem the most likely strategy to exploit trade ties and project investment.

Merger and acquisition activity involving the major Chinese banks is likely to lead to a new era in African banking, and cement the Chinese banks’ position as the new kids on block.

*Meyer is a London-based financial analyst and a research associate for the China in Africa Project at the South African Institute of International Affairs.

(TradeAfrica)

Trade union leaders of China and several African countries met here Tuesday afternoon, and the two sides expressed the hope to further advance their cooperation.

“The trade unions of China and African countries are trusty good friends and partners. The China visit are believed to further promote an in-depth development of our relations,” said Wang Zhaoguo, chairman of the All-China Federation of Trade Unions (ACFTU).

Highly appraising the African trade union’s stance of upholding the principles and justice in international workers movement, Wang expressed gratitude for the support of African trade unions to China’s trade union in international labor affairs as well as their sincere condolences for the massive earthquake China suffered this year.

Leaders from 11 African countries’ national trade unions and industrial trade unions depicted China’s trade union as good comrades and brothers, and thanked for the support and assistance from the Chinese government and trade union for years.

They said they would work with the Chinese side to bring their friendly cooperation to a new stage.

Wang also briefed the guests on China’s current political and economic situation and the work of ACFTU.

The African trade union leaders are here for a seminar jointly held by the ACFTU and Chinese Ministry of Commerce, which has been held for four rounds since 2004.

Altogether 26 leaders from 11 African countries’ national trade unions and industrial trade unions attended the seminar, which washeld from Oct. 13 to 14 in Beijing. Besides the Chinese capital, the African trade union leaders will also visit Tianjin Municipality in north China, and Zhejiang Province and Shanghai Municipality in east China.

(xinhuanet)

Soaring food prices, supply fears among import-dependent countries and rising demand for biofuels have driven up investment in agricultural land, notably in Africa. The meltdown in financial markets has slowed some of these flows, but some analysts say there are still good opportunities in African land, where investment in infrastructure, fertiliser and equipment has traditionally been lacking.

Here are some facts about farming and foreign investment on the continent:

*The Food and Agriculture Organisation (FAO) says only 14 percent of Africa’s 184 million hectares of arable land is under cultivation, with some 21 million hectares in a state of accelerated degradation.

* It said agriculture accounted for 17 percent of gross domestic product in Africa, 57 percent of employment and 11 percent of export earnings.

* Agricultural imports have increased more rapidly than exports in the last 30 years with Africa becoming a net importer of agricultural commodities, 87 percent of which were food products in 2005.

* In 2003, African governments agreed to allocate at least 10 percent of their budgets to agriculture and rural development. The African Union said only one country in five has reached or exceeded that level.

* It is estimated that if the current plateau in agricultural productivity continues, the amount of additional land required just to meet projected food demand in 2050 would be about 3 billion hectares, nearly all from developing countries.

* The China Development Bank has granted loans worth several hundred million dollars to agricultural processing firms, mostly in East Africa. Governor Chen Yuan told African finance ministers in August the bank plans further investments and urged Africans to grow cereals as well as cash crops.

* In 2006, China agreed with some African countries to help raise grain production by using Chinese rice seeds and technology. It has also agreed to set up demonstration farms.

* Cash-rich, water-poor Middle Eastern and Gulf nations are also looking to secure food supplies. Import dependency in food will reach 60 percent in the Gulf Cooperation Council countries by 2010, according to the FAO. Oil producer Abu Dhabi announced plans in July to develop over 70,000 acres of farmland in Sudan to grow alfalfa, used as animal feed, and probably corn, beans and potatoes. The United Arab Emirates has farms in several Sudanese provinces, including a 40,000-feddan (1 feddan is 4,200 square metres) farm where wheat and corn are grown. Saudi Arabia said last June it was in talks with Sudan to allow Saudi companies to establish projects for wheat, barley, soya beans, rice and animal fodder.

* U.S.-based Dole Food Co. and Chiquita Brands International are talking with Angolan authorities to help rebuild the once prosperous banana industry in Vale do Cavaco. Brazilian building giant Odebrecht also recently announced plans to invest in Angola’s sugar and ethanol sector.

* The pressure to develop biofuels and non-food oils has resulted in an explosion of foreign-owned plantations in developing countries. Land in emerging markets can cost one-tenth the price of land in industrialised countries. But the global financial crisis means some players believe funding for new biofuel projects may be hard to come by, at least in the near-term.

* Germany’s Flora EcoPower is investing $77 million in Ethiopia’s Oromia state as part of a purchase of over 13,000 hectares of land for biofuel production. Sweden’s Sekab Group, one of Europe’s leading ethanol producers, plans to produce 100 million litres of ethanol a year in Tanzania by 2012 at a cost of $200 - $300 million. British-based energy firm CAMS Group said in September it planned to produce 240 million litres of ethanol a year from sweet sorghum in Tanzania at a cost of up to $600 million. Britain’s Sun Biofuels plans to grow about 5,500 hectares of jatropha in Tanzania. The company also grows jatropha in Ethiopia and has similar projects in Mozambique.

* Grain yields in sub-Saharan Africa are 40 percent below those in other developing countries, with a hectare of Zambian farmland providing roughly a third of the maize that a comparable Chinese plot would yield.

It may be hard for Africans or outsiders to accept the idea of food being grown for export when local people go hungry. This has been cited as a concern by China, among others. The potential for conflict or upheaval is real. In countries where there are sensitivities to foreigners owning land, some investors fear they may be vulnerable to nationalisation or labour disputes.

INVESTMENT FUNDS: A FEW EXAMPLES — UK-based Emergent Asset Management said in May it was planning to launch a fund to buy farmland in sub-Saharan Africa. The African Land Fund would initially invest in 12 countries. UK-based investment company, cru Investment Management, has already piloted a farming scheme in Malawi and launched a fund called Africa Invest on the back of that success. Agri-Vie, a new private equity fund, plans to invest in agricultural processing, with backing from a foundation linked to cereal maker, Kellogg Co. It will focus initially on South Africa and neighbouring states; on Kenya, Tanzania and Uganda in East Africa and Ghana and Nigeria in West Africa.

CASE STUDIES: DEMOCRATIC REPUBLIC OF CONGO — The International Food Policy Research Institute says DRC, could become a breadbasket for the developing world. It has 80 million hectares of arable land, ranking it seventh in the world, and 80 percent of the land that could be farmed is either unused or underutilised. ZAMBIA — Zambia has demarcated thousands of hectares of land into farm blocs for sale to foreign and local investors. Zambia uses only 10 percent of its more than 40 million hectares of arable farmland. Huge tracts of land remain uninhabited.

(africanagriculture blog)

Though the world financial crisis will impact trade between China and Africa, the crisis may also allow China to increase its influence in the country at a time when Western investment in Africa is declining.

Today, a South African navy ship is scheduled to make its first official visit to China, as part of a year-long celebration honoring 10 years of China-South African diplomacy.

China’s investment in Africa has grown exponentially in recent years, with the total value of trade between China and Africa increasing nearly 40 percent every year.

Despite Chinese officials characterizing the relationship as “win-win” proposition, there are questions about the effects of cheap Chinese goods on the African job market.

Recently, British conservative author Peter Hitchens penned a scathing article about China’s exploitation of Africans. He calls the relationship a “slave empire,” saying that Africans fear speaking ill of Chinese businessmen despite producing their raw materials in poor living conditions.

The “Tibet Rights” blog posts a response to Hitchens’ article, calling it hypocritical and reminding readers of the impact of Western intervention in Africa.

Grace Augustine argues on Stanford’s “Social Innovation Blog” that despite China’s claim of reducing poverty in Africa, poverty and inequality are not the same and Africa should be wary of China’s human rights record.

The blog “I have no tribe, I’m Sudanese” writes that China has helped Africa. The blogger defends China against colonization claims and says the relationship is mutually beneficial.

Blogger “Keeplefty” writes that while most reactions to China’s presence in Africa fall under categories of paranoia or praise, their real relationship falls somewhere in between.

American blogger David Mixner urges increased involvement in Africa to compete with China.

The “Windy Harbor” blog writes that the financial crisis may be an opportunity for Africa to more fully engage in the global economy.

As the debate continues, interest in Africa is on the rise elsewhere. The “China Comment” blog predicts that China will face competition from the U.S. and EU in South Africa, where it has deep economic and diplomatic ties. Alex Belida of “Regrets Only” discusses Iran’s interests in Africa, while Pambazuka News examines India’s role in the region.

Following a recent World Bank report [PDF] on China’s essential financing of sub-Saharan African infrastructure, the “African Politics Portal” blog assesses the thoroughness of the study and outlines the benefits and pitfalls of these Chinese investments.

(worldfocus)

A museum meant to help Chinese learn more about life and culture in African has been built in Shanghai.

The Museum for An Experience of African Lifestyle, which is now in open to the public, is Located on Xianggang Road near the Bund.

An opening ceremony will be held in November, according to Cheng Hui, chairman of the board of Into Africa Cultural Development Co. and also one of the museum’s investors. He was unable to provide an exact date.

“African art is quite different to our taste, it takes time for ordinary people to accept it,” said Cheng.

Refurbished from an old warehouse, the museum has 400 square meters of floor space and a budget of one million yuan (146,495 U.S. dollars). It houses artwork from more than 20 African nations, including wood and stone carvings, an Egyptian water pipe and tea from South Africa.

“Africa is definitely a potential rising overseas tourist destination for Chinese people as Sino-African ties continue to warm up,” Cheng said. “Chinese tourists may come and visit our museum to learn more about Africa and get well prepared before they travel to the African continent.”

Mfana July Gininda, political consul of South Africa’s consulate in Shanghai, said the museum reminded him of his hometown.

(XINHUA)

To the consternation of U.S. trade officials, policymakers and private-sector trade groups, trade between Africa and China not only has exploded, but also continues to grow at a pace that eclipses the growth in trade between Africa and the U.S.

“It’s a subject that is attracting a considerable amount of attention among members, but there is no one opinion as to whether it is detrimental to U.S. interests, neutral, or if it’s a good thing,” said Tim McCoy, vice president at the Corporate Council on Africa, a Washington-based trade association that focuses on commercial relations between the United States and Africa.What it underscores, many say, is the need for a different U.S. commercial strategy in Africa.

“If we want to compete with China, we can build railroads, put in power infrastructure and telecommunications infrastructure,” said Shelvin Longmire, a veteran Washington-based international consultant. “We may not like the way they’re doing it, but I see China’s activities delivering substantive capital-intensive projects that are going to benefit (African) countries, versus what the West was doing: extracting resources without putting infrastructure in place.”

Among the winners? The breakbulk and project cargo industries.  Many Chinese ports are experiencing a boom to and from Africa, from mega- and breakbulk shipments to containerized reefer and heavy-lift cargo.In July, Safmarine Container Lines started a monthly multipurpose vessel service from Zhangjiagang, China’s largest river port, and Tianjin, the country’s second-largest general port after Shanghai, directly into West Africa. The service calls at ports in Angola; Cameroon; the Republic of Congo; Cote d’Ivoire; Equatorial Guinea; Gabon; Ghana; Sao Tomé and Principe; South Africa; and Togo.

“With so many infrastructure projects under way in West Africa, this multipurpose offering gives us a real edge,” Verner Hammeken, Safmarine’s multipurpose-vessel manager in China, said at the launch of the service.Three African countries — Angola, Sudan and the Republic of Congo — are among China’s top 10 oil sources, with additional crude imported from Chad and Equatorial Guinea. But China’s huge appetite for Africa’s commodities goes beyond crude oil. There’s cobalt and other strategic minerals from the Democratic Republic of Congo; timber from Mozambique; copper from Zambia; and iron ore and manganese from South Africa. South Africa is China’s fourth-largest supplier of iron ore.In agriculture, Burkina Faso, Benin and Mali supply China with 20 percent of its cotton imports, Cote d’Ivoire is a key source of cocoa, Kenya provides significant amounts of coffee beans and tea and Namibia, large shipments of fish and fishmeal.In return for this great takeout of raw materials and commodities, African countries, including those with governments that Washington deems corrupt, undemocratic or abusers of human rights, get no-strings-attached investment and 20- to 30-year low-interest loans with which the U.S. cannot compete.

African countries, whose economies have been growing at 5 to 6 percent a year for the last decade, need new transportation, power and telecommunications infrastructure, manufactured goods and technical know-how, and China is happy to provide them. With $1.6 trillion in cash reserves, compared with the United States’ $62 billion, Beijing has much more leverage for deals in Africa than Washington.

China has launched large-scale infrastructure projects, including roads, bridges, airports, housing, ports, hospitals and schools, in addition to energy cooperation with African countries; signed framework agreements with 19 African countries on loans with favorable terms; and forgiven debts of 32 African countries.

The Export-Import Bank of China has planned $20 billion or so in infrastructure and trade financing to Africa over the next three years, outstripping the $7 billion or so in combined pledges from traditional Western donors, including the U.S., toward a special fund to tackle sub-Saharan Africa’s shortfalls in electricity supply, roads and other infrastructure. That $20 billion comes on top of China’s previously announced $5 billion development fund for Africa.

Figures on China’s commercial foray into Africa are mind-boggling. According to U.N. and International Monetary Fund statistics, China’s two-way trade with Africa surged past $70 billion in 2007 from less than $1 billion in 1980, while U.S. trade with Africa grew to about $85 billion from about $23 billion during the same period. At $73.3 billion in 2007, two-way China-Africa trade was up 32.2 percent over the previous year, bigger than the jump in China’s trade with any other continent.Between 1998 and 2006, Africa’s exports to China increased 2,126 percent against 402 percent in exports to the United States. To facilitate those exports, Beijing set up most-preferential-treatment agreements with 20 African countries, including tariff-free treatment on 454 products imported from the least-developed nations. China is now Africa’s third-largest trading partner after the U.S. and France, with about 800 cash-flush Chinese companies operating on the continent.By contrast, eight years after the inception of the Africa Growth and Opportunity Act, the main platform for U.S. commercial engagement in sub-Saharan Africa, exports from that region to the U.S. have barely moved beyond oil. U.S. trade officials consistently complain about the “low participation” of U.S. companies in the region.

Exports from the 39 AGOA-eligible countries in 2007 totaled $51.1 billion, more than six times the amount in 2001, the first full year of AGOA, but petroleum products accounted for the bulk of those exports. While more than double its 2001 figure, non-oil AGOA trade totaled a paltry $3.4 billion in 2007.

To be sure, Washington has stepped up its commercial activities in Africa, particularly through the Export-Import Bank of the United States, the Overseas Private Investment Corp., the Trade and Development Agency, and the U.S. Agency for International Development. Activities this year alone range from new trade and investment agreements and the creation of sector-specific development funds to new Ex-Im Bank facilities and conferences on support for U.S. companies that invest in infrastructure development. In addition, Commerce Department and other agency officials are fanning out across the country, promoting Africa as a good place to do business.

At the U.S. Ex-Im Bank, efforts are under way to improve its financing competitiveness. In March, the bank granted special delegated authority to the African Export-Import Bank to provide up to $40 million in Ex-Im Bank short- and medium-term financing, making it easier and faster for African buyers to obtain U.S. Ex-Im Bank support for their purchases of U.S. goods and services.

Early in the year, OPIC launched five Africa investment funds aimed at developing health care; commercial and residential real estate; technology, media and communications; capital markets and small and midsize enterprises. And since 2006, USAID’s African Global Competitiveness Initiative has been providing technical assistance to sub-Saharan enterprises to enhance their export competitiveness, with a view toward expanding U.S.-Africa trade.All that still is not enough to counter China’s clout, many contend. “Emphatically, ‘yes,’ we do need to be doing more. If you look at the engagement of the U.S. Export-Import Bank, the overall engagement when compared to others, including China, is not where we want it to be,” said McCoy of the Corporate Council on Africa. “If we do see China as a source of increasing competition, we are looking at such things as loan guarantees, available capital for investment — there we do see that the U.S. could be doing more,” he said.

(breakbulk)

You expect to see something a little strange from time to time while traveling through Asia, but one establishment has something to really shock you.

Kayabuki, a Japanese tavern in Utsunomiya, recently employed 2 Macaques monkeys to act as waiters. Fuku is 12 years-old and Yat is a young 4 years of age and both seem to enjoy their new work.

Kaoru Otsuka, owner of the tavern, says the 2 monkeys are their household pets, but one day he noticed one of them mimicking a waiter by giving the customer a hot towel in the restaurant.

Mr. Otsuka thought it would be an interesting idea to have them actually serve the customers.

Both monkeys works 2 hours a day, serving drinks and handing customer hot towels.

They don’t seem to mind the work and are happy to do it in exchange for some Edamame (soybeans) from the customers as tip.

The monkey waiters have done such a good job and brought so much business to the restaurant, Mr. Otsuka admits they’re better than his real son at the job.

(weirdAsianNews)

The Industrial and Commercial Bank of China (ICBC, SHSE: 601398 and SEHK: 1398) and Standard Bank of South Africa are upgrading their strategic cooperation.

Standard Bank of South Africa, in which ICBC holds a 20 percent stake, is about to set up a representative office and a consulting firm in Beijing before the end of 2008,. It has established a representative office and an investment consulting firm in Shanghai several years ago. The consulting firm provides consulting services in bulk commodity, precious metals and carbon emission trading.

The Beijing representative office will consist of over 20 professionals. They will be divided into seven teams, and each will specialize in investment operation, merger & acquisition, project financing, source banking, cash management and global market, and custody and trade finance, said a top executive from Standard Bank of South Africa.

Some of them will work in the same office building as ICBC to take charge of the strategic cooperation.

The upcoming representative office is contacting over 80 Chinese companies that have expressed interest in doing business in Africa. All of the potential clients are recommended by ICBC, the nation’s largest commercial lender by assets. Its local operations in 17 African countries have set up special units to serve Chinese clients.

All of the preparations progress well at present, added the top executive.

The Beijing consulting service firm will principally provide consulting services related to overseas merger & acquisition, financing and other financial activities for ICBC and its clients, Chinese companies that show interest in doing business in Africa and even other Chinese banks. So far the Import and Export Bank of China, China Development Bank and China CITIC Bank (SHSE: 601998) have extended presence into the African market.

The executive expects that the cooperation with ICBC in the year from July 1 can bring USD 50 million additional incomes. It is anticipated that about 10 percent of Standard Bank of South Africa’s global incomes would be derived from the cooperation.

Being the largest bank in South Africa, it is willing to partner with other banks such as Bank of China, Import & Export Bank of China and Agricultural Bank of China and will continue to cooperate with China Development Bank.The executive does not rule out the possibility to apply for a banking license in China.

(USD 1 = CNY 6.83)

(tradingmarkets)

The Chinese Consul General in Lagos at the weekend said a 28-year-old Nigerian who died in China on Tuesday fell on a staircase contrary to allegations that Chinese security men killed him.

In a follow-up to its response to Daily Sun’s query published on Friday, the Consulate General spokesperson Mao Yizong said local authorities in Guangzhou, China have said Ojide John Ekene fell on the staircase of Yulong building as he tried to run to urinate, adding that in the process he got a heavy hit on his head. Mao, however, did not elaborate.

“We have contacted the local authority in Guangzhou and got the report of this case according to the records provided by many parties. The fact is: September 25th, Ojide John Ekene wanted to urinate somewhere inside Yulong building but had been refused by the security men of the company. The two parties quarreled for a while before Ojide chose to run to answer nature’s call in the D exit of Sanyuanli metro station. Unfortunately, he fell on the staircase and got a heavy hit on his head.”
What happened thereafter. Mao says somebody took Ojide to a nearby military hospital. “Then somebody took him to the military hospital nearby but the two weeks treatment given him could not save his life. He passed on October. 8th”.

Mao says the management of Yulong building was responsible for payment of Ojide’s medical bill. “That afternoon, Ojide’s relatives gathered for mourning and demanded to know the truth about his death. They held talks with the Nigerian Chamber of Commerce in Guangzhou, represented by Mr Ojukwu Emma and the Chinese police and immigration officials.”

According to Mao, the relatives of Ojide “left after getting the report including Ojide’s death certificate,” while “the management of Yulong building paid all the medical fees on moral basis.” It will be recalled that Daily Sun’s source in China had earlier said Chinese security men killed Ojide after he was clubbed with heavy iron rods as he tried to urinate where they were on duty.
“There was a mild exchange of words between the security men and Ojide over where or not to urinate. The security men objected to his urge to answer ‘nature’s call,’ while “abusing him and calling him derogatory names,” the source said.

The incident occurred around the subway to the metro station in Lihua Sanyuanli, near Dragon Hotel in China. According to our source, Ojide was descending the steps leading to the subway metro station to look for another place to urinate when the security men rushed him and began to beat him. He was “hit on the head with heavy iron battens, knocking him to the ground in a pool of his own blood.
“Ekene was rushed to the intensive care unit of a military hospital near China hotel in Lihua Lu where doctors tried to save his life by draining blood from his already battered skull.” The incident was said to have triggered off a wave of anger and sorrow among Nigerians resident in China.

(onlinenigeria)

The SAS SPIOENKOP, a warship from the South African Navy, will arrive in Shanghai Thursday. The trip marks a milestone in Sino-African relations as the first African Navy ship is to pay an official visit to China.

The SAS SPIOENKOP, headed by Captain Christopher Manig, will be docked in east China’s financial hub for five days.

“Commanding the SAS SPIOENKOP, on this historical visit to China, is a great personal honor in that we have followed in the footsteps of the great Chinese seafarer Zheng He, who serves as an inspiration to Navy officers all around the world,” Manig said.

The ship’s visit is part of a year-long celebration honoring 10 years of China-South African diplomatic ties.

Commenting on the historic voyage, Captain Manig said, “The South African Navy is extremely proud and honored to pay this first official visit to China and we are looking forward to interacting with our friends and colleagues in the Chinese navy.”

(XINHUA)

Paul Redfern
Nairobi

A new report says that capital flight from sub Saharan Africa reached an astonishing $607 billion between 1970 and 2004 and that total is continuing to the present day to the tune of between $20 billion and $28 billion a year.

The report published by James Boyce and Léonce Ndikumana of the University of Massachusetts, Amherst, estimate that capital flight from 40 sub Saharan African countries from 1970-2004 stood at $607 billion in 2004 (including interest earnings), compared with a total $227 billion external debt owed by those countries in 2004.

In other words, sub-Saharan Africa is a net creditor to the rest of the world in the sense that external assets, as measured by the stock of capital flight, exceed external liabilities, as measured by the stock of external debt.

“The difference is that while the assets are in private hands, the liabilities are the public debts of African governments,” the report says.

“The real counterpart of many assets on the balance sheets of creditor banks is private deposits in many of the same banks by individuals belonging to Africa’s political and economic elites.”

If the figures published are accurate, it would mean that annual capital flight is roughly equivalent to the entire aid flow to the region and that tackling the crisis would in effect double development assistance to Africa.

Another report, “Catching up with corruption” by Raymond Baker, John Christensen and Nicholas Shaxson, mentions some former presidents as among the elites involved.

“Two jurisdictions that happily soaked up the embezzled wealth of such regimes are worth highlighting: Switzerland and the United Kingdom.”

The corruption report says that UK and Swiss authorities, particularly those in the City of London, have done little or nothing to assist investigations into capital flight, and in some cases have actively hindered it.

It also notes that Transparency International’s Corruption Perception Index “ranks the countries of Africa as the primary locus of corruption but it ignores the global infrastructure of international financial secrecy that has helped bleed trillions of dollars in illicitly generated money not only out of Africa but also out of the Middle East, Latin America and Russia into the financial centres of the richest countries in the world.”

But with the financial crisis that is dominating the world headlines, experts are predicting that things must and will change, with increasing powers being given to police to work across borders to track down illegal capital flight.

The World Bank’s own Stolen Asset Recovery initiative estimates the cross-border flow of proceeds from criminal activities, corruption and tax evasion at between $1 trillion and $1.6 trillion per year, about half of which comes from developing and transitional economies in Eastern Europe.

The movement of such large amounts of capital is seriously hindering all countries’ ability to raise much needed taxation, with the loss to governments across the world estimated at least $250 billion annually.

The corruption report says that the world has been slow to wake up to the problem of corruption in developing countries and that the World Bank and world governments “have yet to accept the full and very inconvenient implications of this shift in thinking.

“The task is not just to recognise the importance of a ’supply side’ to corruption, involving bribe-givers as well as bribe-takers; it is also about dramatically expanding our understanding of what the supply side has come to include in a rapidly changing globalised world.

Only after our understanding has caught up with reality will be able to adequately answer a question that has long puzzled economists: Why does so much money flow from poor countries to rich ones, when, for both rational and ethical reasons, it ought to flow the other way?”

“We now know more or less how relatives and associates of former president Moi diverted hundreds of millions of dollars into their pockets through a web of shell companies, secret trusts and other evasive structures,” the report says.

(AllAfrica)

HUANG Yi-sheng retired to SA in 1992. Aged 37, the former manager for Taiwanese semiconductor maker UMC and his wife settled with their two small children in Bronkhorstspruit, north-east of Pretoria.

He left Taiwan because he was worried about the island’s tense relations with the mainland. “Mainland China was threatening Taiwan with missiles,” he recalls.

He was concerned about the education prospects for his children, and also wanted to become a tea farmer.

After five years of learning in Tzaneen, however, Huang gave up on tea. Surging land prices made it unprofitable. He focus ed on something else — Buddhism. In 2004 he moved to Blantyre in Malawi where he built an orphanage, the Amitofo Care Centre, that accommodates 256 children. Huang, now a full-time monk who goes by a Buddhist name, is building a similar orphanage in Malawi’s capital, Lilongwe. He has completed another one in Harare and plans others in Lesotho and Swaziland.

“When we were kids the Christian missionaries came to Taiwan and did a lot of good things to us,” he says. “Now I’m only returning what we got from others.”

Such missionary work by Zhong Ing, as he is now known, is not what most people would associate with Taiwan, a modern economy of 23-million people set up by nationalists who fled the mainland in 1949. But it is harder to say what Taiwan these days stands for or what it wants from other countries.

The issue is relevant in Africa, where, blessed with great mineral resources, the Chinese mainland has become the only story in town. Taiwan’s advanced economy does not need Africa’s minerals. And country after country has swapped recognition of Taiwan for China.

It lost its United Nations seat in 1971. SA switched to the mainland in 1998. Malawi, the latest, did so in January.

Taiwan, which today celebrates the 97th anniversary of the Republic of China (founded on the mainland), is only recognised worldwide by 23 countries, four of them African. What does Taiwan want from them?

“We want to share our development activities with a lot of our African friends. We have the ability to co-operate, to improve the quality of life of African people,” says Taipei’s acting representative in SA, Dick Fu. But not everyone is as diplomatic.

“It’s about international recognition,” says Martyn Davies of Stellenbosch University’s Centre for Chinese Studies. “They’re saying: ‘We need a minimum number of countries to give us some semblance of international recognition. If not, we are seen increasingly as part and parcel of the PRC (People’s Republic of China)’. ”

Davies says the recognition game is “over” in Africa. China has won and Taiwan cannot compete. Fu effectively agrees, saying increasing recognition in Africa “is not our goal right now”.

Despite this, stories abound of the two jostling for influence in Africa. In Zambia’s 2006 election campaign, opposition leader Michael Sata, a critic of Chinese investment in the copper-rich country, was accused by detractors of taking funding from Taiwanese interests. In March, a Chinese diplomat in Malawi said he suspected a local newspaper wrote an unfavourable story under the influence of the Taiwan government. He also alleged Taiwan was sponsoring opposition political parties .

Fu says that since Taiwan’s new president, Ma Ying-jeou, took power in May, the island’s relations with the PRC have improved. His government does not use such tactics, he says. Asked if they did it in the past, he finesses the question.

“I think after the new president was inaugurated, the foreign policy is what I told you.”

On the South African side, Davies says, the Pretoria government does not pay enough attention to Taiwan.

“Our foreign policy towards Taipei has been obsolete. It’s too politicised. Recognising the PRC as the truly representative government of the Chinese, which it is, does not preclude us from increased commercial transactions with Taiwan.”

(businessday)

The global financial crisis will hit trade between China and Africa, but Beijing will keep expanding its investment in the continent to maintain strong ties, senior officials said on Thursday.

Sino-African trade reached $74 billion in the first eight months, up 62 percent from a year earlier.

“We cannot be very optimistic about sustaining such growth,” said Zhou Yabin, head of the Africa department at the Ministry of Commerce.

“The current bad financial conditions globally will affect our cooperation with Africa, especially in trade,” Zhou said at a briefing for reporters and African officials.

China would encourage domestic firms to increase their investment in Africa in sectors such as infrastructure, financial services and energy, said Chen Lin, head of the ministry’s department of foreign economic cooperation.

Zhou said the $1 billion China Africa Development Fund, which Beijing launched in 2006 to spur investment in Africa, had already put a tenth of its money to work in six projects, catalysing an additional $400 million from other Chinese investors.

Analysts expect the international financial crisis to weaken Africa’s links with the West and drive it towards other emerging markets, especially China.

Zhou fended off critics of China’s engagement in Africa. The country would not be a new colonialist, he said, adding that most of Africa’s heavy industry was still in the hands of western multinational firms.

“If you look at history, it’s not China but the Western powers that looted Africa,” he said. “China came with a clear record.”

China was training skilled workers for Africa and building hospitals and schools across the continent, Zhou said. “We have proved to be a trustworthy friend of Africa,” he said.

(reuters)

BEIJING: “In this golden October, we welcome you here to study and visit, to see a real China,” Wang Chen, director of the Information Office of China’s State Council, on Wednesday told African officials who are in Beijing to attend the fifth press seminar for African officials.

Thirty-two African officials, including senior press officials, spokespersons of presidential and prime minister’s offices, chiefs of major media organization from 18 countries, came to China to attend the two-week-long seminar. During the period, they will attend lectures and exchange views with Chinese press officials, journalists and experts. Apart from Beijing, they will also visit China’s economic hub Shanghai and the earthquake zone of Sichuan province.

It is expected that through the two-week seminar, the African officials could know more about China’s political, economic, cultural and social development and changes, and more actively promote press cooperation and development between China and Africa.

During the meeting with African officials, Wang Chen called the seminar a platform of China-Africa cooperation forum, and a bridge to connect Chinese and African people. He hopes the media chiefs of China and African countries could strengthen exchanges and cooperation, so as to promote mutual understanding between Chinese and African people.

Though four such press seminars have been held before, this year’s seminar has its own specialties, said the press chief.

He said the year 2008 has been a very special one for China, as the nation both suffered the devastating megaquake in Sichuan province and embraced the festive Olympics and Paralympics. So the organizers have included in this year’s seminar curriculum fresh journeys to visit Olympic stadiums in Beijing and the earthquake zones in Sichuan, he said.

African officials will also visit China’s countryside, which is still poor and backward, said Wang. “You’ll see that though China has made great achievements, we still face many challenges,” he said, adding “we want you to see a real China.”

Many African people get to know China through western media’s reports, Wang mentioned, which are sometimes biased, even wrong. That’s why African people need to make direct contact with the nation to see the real picture, just like what the Chinese people should do to Africa.

Adron Aledji Albada, head of the African delegation, said each of the participants cherishes the opportunity to visit and learn about China. When they return to Africa, they will tell the people there their personal feelings about China.

She also suggested that the Chinese Information Office set up a language center during the seminar, so the participating officials would have a chance to learn the Chinese language. Albada, head of Togo’s national TV station, also wished to have more contacts with Chinese TV stations during her stay to discuss possible cooperation.

The opening of the seminar also attracted some African ambassadors to the scene. Mauritian Ambassador Paul Reynold Lit Fong Chong Leung hoped the seminar would offer an occasion for African and Chinese press officials to share experiences, exchange views, and thus enhance their work capabilities.

Malagasy Ambassador Victor Sikonina said the official press of developing countries should be more obliged to inform the public about the government’s development plans, so the whole nation could stick to them as one.

Diarra Diakite, Mali’s presidential communication advisor wearing a stunning golden robe, a traditional costume named “boubou,” told Xinhua that it’s his first time to visit China so he was quite excited and curious about everything.

“This is actually a great opportunity for me, as I’ve always wanted to come to China to see it with my own eyes, to meet its people, to see its changes,” Diakite said.

“Though I’ve only been here for one day, I’ve already got a good impression,” he said. “I see people working hard to improve their living conditions.”

Cote D’ivoire’s technical adviser to the Prime Minister’s office Aboubakar Toto Ouattara told Xinhua that he was “impressed by the development of the country.”

“It’s important for us to experience all these so we know that it’s possible for us to achieve them too,” he said.

The seminar, founded in August of 2004, aims at strengthening China-Africa press cooperation and cementing

(asianews)

Sunday Williams

The total trade volume between Nigeria and the Republic of China hit about N55 naira (US$472m) from January to May 2008 with Nigeria enjoying a trade surplus of US$238 million.

This was disclosed in Abuja by Dr. Ignatius I. Adaji, National President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) on the trade relationship between the two countries and West Africa sub-region.

He said trade statistics between Nigeria and China and most especially between China and West Africa Sub-region has continued to assume increasing trend since 2004 as a result of Chinese investments in the country as well as West Africa sub-region.

He said, “Trade between Nigeria and China in terms of imports and exports stood at US$290m, US$162, US$281M and US$189M respectively in 2004.The total trade volume between Nigeria and China was over US$541 million in 2007, with Nigeria enjoying a trade surplus of over US$162 million.”

He said trade/investments will far surpass the figures recorded last year and may hit the billion dollar mark, if appropriate enabling environment and infrastructural support are given to businesses by the governments of both countries.

He added that presently, the China direct investment in Nigeria is in over 28 project areas, amounting to over US$250 million, while creating over 10,000 employments for Nigerians.

He said, “Companies such as Omatek computers limited, Zinox computers limited-Link Nigeria and Acer, among other high-tech companies, are currently benefiting from cooperative ventures with China.”

Dr. Adaji said Nigeria welcomes the recent efforts of the Chinese government to encourage the transfer of industrial outfits willing to relocate to West Africa adding that NACCIMA has signed M.O.U with the companies that are willing to relocate.

He said that China should look up to Nigeria as a strong trading partner by encouraging the processing of Nigeria’s raw materials for exportation not only in China, but to other countries in the world.

In order to reduce the incidence of substandard products into the country, he said the government should put in place a deliberate policy insisting that all exports should register with Chambers of Commerce and Industry in their catchment areas and Corporate Affairs Commission (CAC) registration numbers pasted on their products.

He added that there is also the need for the Nigerian government to take a cursory look at the Economic Partnership Agreement (EPA) between the European Union (EU) and ECOWAS in order to come up with a policy statement that will assist Nigerian manufacturers to withstand competitiveness with their counterparts from China and other parts of the world.

He commended the Nigerian government for not signing EPA saying the implementation of the agreement in its present format will de-industrialise the country by collapsing its fledging local industries, lead to loss of government revenue and decrease the welfare of the citizens.

(allafrica)

Angolan oil exports, the country’s main source of revenue, will continue to increase in the near future thanks to growth in demand from China which will compensate for possible setbacks in other markets, according to analysts from Portugal’s Banco BPI.

“Despite certain conditions that could limit the demand from developed economies, China’s strong growth provides guarantees that, in the near future, demand for Angolan oil should be maintained,” say the BPI analysts in the latest report on Angola, published in September.

Throughout this year Angola has boosted its position as the largest and most reliable oil producer in Sub-Saharan Africa, with estimated production of 1.9 million barrels per day, ahead of Nigeria where the Niger delta conflict has seriously affected production.

Over the next few months an important strengthening of Angolan production capacity should take place, with new oil fields such as Saxi and Batuque starting production and Mondo and Cabinda stepping up their output.

“The demand from other emerging economies, and in particular from China, where demand continues to be high, should be a long term supporting factor. Although the USA still has a significant role, China has established itself as an important candidate for the main destination for Angolan exports,” say analysts, Cristina Casalinho, Paula Carvalho, Susana Santos and Joao Sousa.

In 2007, China represented 28 percent of Angolan foreign sales, 10 percentage points up on the previous year; these oil exports were worth US$ 10.605 billion dollars, second only to exports to the US which reached US$12.855 billion dollars.

However, BPI emphasises that oil export fluctuations to the USA and China follow differing tendencies: the first, historically more important, though losing ground, and the second gaining ground. “It is expected that China will consolidate its position as the main destination” thanks to “the increased closeness of [bilateral] trade relations.”

For the first time in June this year, China’s oil consumption rose above the target 8 million barrels per day.
Currently oil represents around 80 percent of Angolan exports and, directly, over 57 percent of its GDP, which is why it is “vulnerable” to a possible inversion of the oil cycle, which has in recent weeks fallen in the international markets, says BPI.

It is above all thanks to oil, exports of which have been steadily increasing in quantity and value, that the Angolan balance of payments# has undergone a “significant improvement” over the last five years, even with imports increasing three-fold to US$11.7 billion dollars last year.

Linked to this increase in buying from abroad is “the enormous reconstruction drive undertaken by the Angolan authorities, which, in view of the non existence of a developed national industry sector, has meant that all necessary machines and equipment have had to be imported, and also the increased buying power of the population, within an economy which is not diversified,” says the report.

Up until May this year, Chinese exports to Angola grew by close to 140 percent, according to the latest available official statistics, reaching US$ 972 million.

The value for the first five months of this year is close to last year’s total (US$ 1,241 million) and is well over the total for 2006 of US$ 894 million.

“China has intensified its relations with Africa. Aware that the growth of China’s economy is dependent on access to raw materials, the authorities have strengthened relations with African countries, particularly exporters of natural materials, namely via credit lines,” says BPI.

With oil exports taking the Angolan economy to grow at record levels, it is difficult to control inflation, which in July reached 12.5 percent, a big leap compared to the previous month and the highest rate since July 2006, requiring exceptional measures from the government which has for a long time been trying to bring it down to 10 percent.

“Faced with the possibility of speculative prices,” particularly for services, catering and in the hotel industry, Luanda announced that it is preparing legislation to “minimize these effects,” although “rejecting the possibility of imposing administrative prices,” and on the other hand “carefully monitoring the price setting” in the relevant sectors, said the analysts.

Prices for the Angolan consumer have been influenced by logistical restrictions, namely difficulties in the unshipping of goods, but also by the so-called “import inflation”, most recently due to food bought from international markets.

BPI is the main stakeholder in Angolan private banking leader Fomento Angola. (macauhub)

THE dramatic events of the past few weeks, starting with one of the world’s most powerful investment banks — Lehman Brothers — going to the wall and insurer AIG teetering on the brink, has left a wounded western financial world licking its wounds and looking anew at its model of global finance.

Western finance is bound to change dramatically in the next few years. With depleted balance sheets and heightened credit adversity, the void will probably be filled by new players, notably from China and Japan. This could have important implications for Africa, where the resource boom could lead to attractive opportunities for Chinese banks.

While China has already bought into a number of international financial institutions (including Barclays, Morgan Stanley, JC Flowers), Japanese banks moved quickly to take advantage of the carnage on Wall Street to beef up their presence in investment banking. Mitsubishi UFJ has agreed to take a 10%-20% stake in Morgan Stanley, and Nomura says it will buy the Asia Pacific operations of Lehman Brothers for $225m. And with cash not a problem and subprime exposure a relatively alien concept, Asian banks are poised to expand their global presence further.

For China, expansion into the developed world is fraught with political danger, especially in the US, where suspicion of foreign (and particularly Chinese) investment in big US corporations runs deep. So the alternative is to follow patterns of trade, and this points in one direction: emerging markets, particularly Africa.

The case for China’s rapid expansion of trade relations with Africa ($72bn at the end of last year) is premised on the need for resources security to ensure continued rapid economic growth. Hence, its biggest trading partners are commodity rich countries of Africa: Sudan, Angola, Nigeria and SA. The format of getting to the commodities has been innovative, but based mostly on the Chinese extracting resources alone or forming joint ventures with governments, such as the Chambishi copper mine in Zambia, or taking stakes in existing projects, such as a 45% stake in an offshore Nigerian oil field by China National Offshore Oil Corporation.

Deals financed in Africa have been mostly through the China Exim Bank in trade finance and project finance. While details of the financing terms are not readily available, it appears from a World Bank study that a great many, if not most, were priced on favourable terms for the recipient countries, and function essentially as an extension of Chinese aid. But in some cases China has started

co-operating with western banks to do project finance deals, including Sinopec (China Petrochemical Corporation) financing for its joint venture with Angola’s Sonangol for offshore block 18. After initial western banking reticence, the deal attracted a range of western and Chinese bank participation and the political risk of Angola was seen to have been mitigated by the size of Chinese participation.

The China Development Bank assumes an even more important role, in concert with the China Exim Bank, through investment in the $5bn China-Africa Development Fund. It will be used mainly to support African countries’ agricultural, manufacturing and energy sectors, and the development of Chinese enterprises in Africa. The fund signed its first deals with four Chinese companies in Beijing in January to invest in infrastructure and housing projects in Africa.

Traditionally, the presence of banks in emerging markets can be traced to colonial ties.

Proximity is an important factor, and this refers not only to geographic proximity but also to proximity in terms of cultural, linguistic and economic ties. These factors seem to rule out a Chinese banking foray into Africa. At the same time, China has no colonial baggage to render — at least until recently — its economic decisions subject to political controversy in Africa, and it could well be in a good position to exploit growing opportunities.

But the banking market in Africa remains underdeveloped, and poses challenges for institutions hoping to land increasing market share.

Banks will need to develop payment and processing systems to handle international transfers and data-capturing and management information systems to process such data. Crucially, operational and credit risk systems will need to be enhanced. One of the main aims of the Chinese government in opening the banking system to foreign investment has been to gain the necessary expertise to become highly competitive.

But in local markets, and especially emerging markets, local banks may well have an advantage in market information given superior access to corporations, superior relationships and a better understanding of local market conditions. This implies that a foreign bank with little experience in entering foreign markets will need to take a cautious approach. It is likely to start with a fundamental understanding of the key players in the local market, and to approach such institutions with an understanding to co-operate, start joint ventures and eventually to make equity investments. This has been the approach of foreign banks in entering the Chinese banking market.

It came as a surprise, then, when one of the first meaningful investments of a Chinese bank was the 20% stake in SA’s Standard Bank, for $5,5bn. This was a significant outlay, even for ICBC, as the finance equates to 8% of its capital. The reasoning seems sound from a strategic point of view; ostensibly, Standard Bank will help ICBC serve its corporate customers in Africa, while Standard Bank will gain a foothold in China.

The funds that Standard Bank obtained will be used in its further expansion in Africa — Angola and Nigeria in particular — and a private equity fund will be set up.

It is apparent from this that Standard Bank will target growth outside its home market, and will be well placed to target Chinese corporate customers operating in Africa. This presents it with a significant opportunity to consolidate its operations in Africa, and take a large share of business from Chinese clients who will increasingly be important in this area. This puts it at a significant advantage to many other competitors.

The timing of the deal also appears to be fortuitous; for many of the potential competitors, risk appetite will decline as liquidity remains under strain. In China, however, liquidity remains abundant. It seems the Standard Bank deal will be the benchmark investment approach for Chinese banks in emerging markets; target the bigger, better developed institutions with multicountry presence first. For Chinese banks, continuing to acquire stakes in well managed and bigger African banks will seem the most likely strategy to exploit trade ties and project investment. Merger and acquisition activity involving the major Chinese banks is likely to lead to a new era in African banking, and cement the Chinese banks’ position as the new kids on block.

n Meyer is a London-based financial analyst and a research associate for the China in Africa Project at the South African Institute of International Affairs.

(businessday)

A double-headed tortoise weighing only 17g (6 ounces) was recently found in Wuwei, Anhui Province, China.

Chinese scientists were shocked to discover a rare Mediterranean spur-thighed, two-headed tortoise among a shipment of baby tortoises ordered from a local farm where a worker was said to have bought it from a fisherman some two months ago.

They are currently studying this creature that is in good health and is being cared for by the scientists conducting the research.

Initially worried that the tiny mutant reptile would not survive, their fears have been allayed by the fact that in comparison to its siblings, which are all developing at a steady and very normal rate of growth at their home at the Water World Aquatic Farm in the town of Anhui in eastern China, this little baby is thriving and eating twice as much!

“We got it two weeks ago and it’s growing fast, probably because it can eat twice as fast as the others. It’s very rare to see a turtle with two heads, and we plan to keep it and raise it carefully for future research,” said Jimmy Hu, a Water World spokesman.

Is that old axiom about two heads being better than one really true?

Only time and possibly turtles will tell.

(weirdasianews)

Telkom South Africa has signaled its intention to compete in cellular service provision and the small- and medium-business sector with the rollout of W-CDMA from Chinese telecommunications giant Huawei.

With W-CDMA (Wideband Code Division Multiple Access), Telkom will offer high-speed Internet access, video and high-quality voice transmission. The company appointed Huawei as a technology partner to deploy its fixed-wireless and mobile data network.
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“The new technology is addressing customer needs by increasing investment in customer-centric technology that aims to enhance their experience with Telkom,” said Motlatsi Nzeku, Telkom chief of operations. “Telecommunication services is no longer just about innovative technologies; it is about matching with customer demand.”

Huawei brings to the partnership proven innovation, formidable research capabilities, experience with the speedy deployment of technology in emerging and developed markets, and a highly competitive cost structure, Nzeku noted.
Telkom products have fallen out of favor with small businesses because of the relatively high prices for voice and data calls, which were contributing to high overheads. The company’s revenues have also been under significant pressure from declining voice services further impacted by the effects of copper cable theft, Nzeku said.

Nevertheless, Telkom has declared its intention to challenge the domination of the cellular services market by piloting W-CDMA voice services with select customers. It is testing W-CDMA voice services in Gauteng with 38 base stations in the Gauteng metropolitan area and plans to have more than 200 base stations in the Gauteng, Cape Town and Durban metropolitan areas by March 2009.

The company hopes to fully launch its fixed-mobile service by the end of September 2009.

Kenya Airways has officially confirmed that it will be launching new nonstop flights to CAN-Guangzhou, China from its NBO-Nairobi hub 3 times a week using a Boeing 777-200ER. This flight will be replacing the 3 weekly B 763ER service that is flown via DXB-Dubai. The new nonstop NBO-CAN will be in operation effective November 1st 2008 and will result in the carrier offering a total of 6 weekly flights on the NBO-CAN-NBO route i.e. 3 weekly B 763ERs via BKK + 3 weekly B 772ERs nonstop.

Analysis:

A bold yet important strategic move undertaken by KQ by deciding on flying nonstop NBO-CAN instead of the originally planned NBO-DXB-CAN with 5th freedom rights available on the DXB-CAN sector. This means that KQ will become the first ever “sub-saharan African airline” to fly nonstop from Africa to mainland China. KQ’s new NBO-CAN nonstop flight is timed beautifully to connect with LOS, DAR and ACC via NBO in both directions and will give EK, QR and ET a serious run for their money on capturing market share on the lucurative Africa-CAN-Africa route.

(airline-news.blogspot)