Africans In China

It’s hard to find something not impacted by our current financial crisis. Here are 12 examples of what the recession means for specific things, from Spam to sex addiction.

1. Spam

It looks like meat, it tastes like meat, but it’s a far cheaper substitute for meat. It’s Spam! And it’s booming. Though Hormel’s share price has fallen with the overall market, Spam sales are soaring as the economic crisis leaves consumers strapped for cash. Interestingly enough, Spam, the “crazy tasty” mix of ham, pork, sugar, salt, potato starch and a sodium nitrite, was invented during the Great Depression and became a staple for Allied troops overseas in the 1940s.

2. Marriage and Divorce

Breaking up is hard to do, especially in this economy. While it may be too early to know the impact of the crisis on divorce rates, it appears divorces may have slowed down since the financial crisis began. That’s because despite most arguments being over financial issues, it may just be too expensive to pay the legal fees of a divorce and support two households. In fact, during the Great Depression, divorce rates dropped sharply, though they picked back up immediately thereafter.

3. Recycling

The plunge in commodity prices has taken a toll on recyclers. In fact, the whole movement may come to a halt as oil and metal prices fall. Used newspaper, used cardboard, and scrap metal prices have also seen a drop, partially due to dwindling home construction and slower automobile production. Some recyclers are closing their doors, and in the UK entire city councils are abandoning their recycling efforts, as they are no longer economically feasible.

4. Psychics

“There is no rhyme or reason to the way the market is trading,” says a personal trader. “When conditions are this volatile, consulting a psychic can be as good a strategy as any other.” Psychics, astrologers, palm readers and “professional advice-givers” say business is booming as clients come to them seeking financial guidance. Clients will typically pay $75 to $1000 for an hour’s worth of insight!

5. Holiday Parties

Just as you suspected, companies are cutting back on their holiday galas. ABC News announced the cancellation of its annual celebration. American Express did the same and then some – announcing the cancellation of 2009’s celebration as well.

But what about the caterers? 56% of party planners say that their corporate holiday party numbers will be off more than 10% this year compared to last. They’re scrambling to come up with innovative, more somber types of gatherings like luncheons, pot-lucks, and receptions rather than galas, caviar, and glam.

6. Used Car Sales

The used car business is flourishing! Specifically, used car companies that offer buy-here/pay-here financing for lower credit individuals who have been locked out of traditional lending.

But if used isn’t your thing, it may still be a decent time to buy new. That’s because even steady growth car makers like Honda and Toyota have seen 24% and 32% declines, respectively. Car dealers are desperate to get rid of inventory and are offering invoice and below invoice prices. Look for dealers that have a lot of inventory, because they’ll likely offer the best deals.

7. Iceland Tourism

Looking for a good holiday or spring trip? Look to Iceland!

Once an economic success story, this small country is now, well, bankrupt. If you were attune to Fannie and Freddie and the big Wall Street break-up, you may have missed Iceland’s fall. Its three largest banks were oversized and highly leveraged, and seemed ready for collapse in early October. Iceland’s currency, the krona, is essentially valueless, and foreign trade has come to a halt. Luckily, the IMF and its Nordic neighbors have stepped in, lending $2.1 billion and $2.5 billion respectively to help the country recover.

But tourism appears to be on the rise. Airfare search engines report a 400% increase in Iceland flight searches. A recent search of round-trip flights from New York found tickets at a record low of $471.

8. College Endowments

Ivy League schools aren’t immune to the financial crisis. Since many college endowments are invested in alternative asset classes, which have lost value, they’re seeing unprecedented losses. Many college and university endowments are projected to have decreased by 30% this fiscal year. For Harvard, that may mean an $11 billion drop.

That may mean a decrease in financial aid – especially because lenders can no longer sell their securitized loans in the secondary market to get new money to offer new student loans. Despite Congress’ Ensuring Continued Access to Student Loans Act of 2008, which authorizes the Education Department to buy federal student loans from education lenders for the 2008-09 and 2009-10 school years, there’s a chance financial aid may fall short.

9. Lipstick & Hosiery Sales

The Lipstick Indicator is an economic theory proposed by Leonard Lauder, the chairman of Estée Lauder Companies. The theory states that a direct relation exists between rising sales in tubes of lipstick and a falling financial market – the worse the economy, the more women indulge in small purchases, like $10 tubes of lipstick. There are conflicting reports as to whether Lauder’s theory is holding up this downturn. Perhaps hosiery sales will supplant lipstick as the indicator of choice. Overall hosiery sales rose 2.3% this year, with Spanx seeing a 77% increase in sales compared to last year.

10. NASCAR

Very few sports have been hit harder by the economic crisis than NASCAR. From ticket sales to souvenir sales to team sponsorship from large companies, racing is reeling. That’s because an average NASCAR team relies on corporate sponsors for 80% of its budget. That’s four times the percentage of an NFL franchise’s budget. And many of those corporate sponsors, including the Big Three – GM spent $578M in sports advertising in 2007, including NASCAR – are facing high-profile hard times of their own. As a result, some NASCAR teams, including Chip Ganassi Racing and Dale Earnhardt Inc., have merged in an attempt to attract corporate sponsors.

11. Personal Maintenance

According to the International Health, Racquet and Sportsclub Association, gym memberships have been on the decline since 2007. There’s no sign that these former gymrats are instead opting for cosmetic surgery – 53% of plastic surgeons of the American Society for Aesthetic Plastic Surgery say business has slowed.

12. Sex & Sex Addiction

Will the financial crisis spark a baby boom? It just might. According to the Telegraph, sales of sex toys, pregnancy tests, maternity clothes, and baby equipment are soaring. But that’s not the only place sex may have increased. Jonathan Alpert, a Manhattan psychotherapist, has seen a big jump in the number of Wall Street workers who seek help for the sex addictions. Apparently, the economic crisis has sparked “maladaptive coping mechanisms” among bankers, according to Jodi Conway, a sex addiction therapist in New Jersey.

(mentalfloss)

The African Union (AU) is hoping to set up a communal fund to pay for education, science and technology programmes on the continent.

The fund would be held by the African Development Bank (ADB), and be open to contributions from international donors as well as from African governments.

Many millions of dollars are pledged in support of science and technology development in Africa every year. But fears over how money will be managed are making donors reluctant to fund projects, says Hakim Elwaer, director of science and technology at the AU Commission.

“The moment you have a fund structure, with an efficient, transparent and credible management system, this gives more credibility for donors to put money in - especially the big development partners from Europe, Japan, America and the World Bank,” Elwaer told SciDev.Net.

In addition to putting donors’ minds at rest, the fund would also help the AU coordinate science and technology programmes on the continent - something that is problematic at the moment (see AU takes controversial lead in African S&T programmes).

Elwaer said that an important step towards establishing the fund came last week (3-5 December) when the ADB sent an envoy to the African Ministerial Council on Science and Technology (AMCOST) in Abuja, Nigeria, to express the bank’s willingness to host the fund.

But much of the detail has yet to be worked out - such as how the fund will work, how much money it might hold and when it might be established. Moreover, the ADB told SciDev.Net that it is awaiting the outcome of a feasibility study expected by March next year (2009).

Angola was the second-biggest supplier of oil to the People’s Republic of China in November of this year, behind Saudi Arabia, according to information published in Beijing by the Chinese Customs service.

According to the same source, China acquired 1.06 million tonnes of oil (503,000 bpd) from Angola, a fall of 27.1 percent against November 2007.

Saudi Aarabi provided 3.84 million tonnes of oil (939,000 bpd) to China, which was a 69.8 percent rise against November 2007.

The third biggest exporter of oil to China was Iran followed by Kuwait.

Chinese crude oil imports in November totalled 13.36 million tonnes (3.27 million bpd), a drop of 1.9 percent on the same month of 2007. (macauhub)

The Obasanjo Administration (1999-2007) came with increase in the tempo of Nigeria-China relationship. This is understandable since Nigeria had just freed itself from the status of a pariah state which Nigeria’s burdensome military dictatorship forced on it.
Nigeria is doing so much with China today in terms of trade and investments.
But how beneficial is this relationship with China ? Are we learning the ropes from China? Are we leveraging China’s experience? Are we leveraging on its strategies which saw the Chinese out of poverty? Is the Nigeria-China relationship not akin to that with the West? In spite of its South-South nature, is it not similar to the North-South relationship which we have been involved in since the colonial days? Is there any strategic blueprint in place to make China transfer its technology to us?
Background
China, like India, is an emerging economy. The beauty that the Chinese economy is now, its economic progress that many developing countries now admire, began in 1978 after Chinese leaders, led by Deng Xiaoping, concluded that the Soviet style system that had been in place since the 1950s was making little progress in improving the standard of living of the Chinese people and also failing to close the economic gap between China and the industrialised nations.
China has undergone a series of phased reforms, reforms that were designed to solve problems in the Chinese economy. The reforms have taken China from the 1970s through the 1990s to date. It has been quite an experience that, no doubt, has yielded robust results.
The standard of living of most Chinese has improved remarkably, what with rapid modernization of infrastructure, a poverty rate that dropped from 53 per cent of the population in 1981 to 8 per cent in 2001. As of 2005, 70 per cent of GDP has been in the private sector and the relatively small public sector is domiciled by about 200 large state enterprises concentrating mostly in utilities, heavy industries, and energy resources.
Though Sino-African relations date back to centuries, Nigeria’s contact with China, unofficially, only began in the 1950s, 1957 to be precise. Chinese relations with Africa were essentially with North Africa. In fact, Nigeria’s contact with the Chinese was through Egypt. It is on record that Chan Hiang-Kang, commercial officer in the Chinese Embassy in Cairo, established unofficial trade links with Nigeria, along with Ghana, Ethiopia, Tanganyika (now Tanzania) in 1957.
It was a taboo for Nigerians to have anything to do with the communist world which China belonged to. Nigerians like Funmilayo Ransome-Kuti, a frontline Nigerian political and social activist, much to the chagrin of the colonial authorities, secretly visited Berlin and Beijing in the 1950s to attend meetings. Her application for the renewal of her passport was turned down. All contacts with the Eastern bloc countries and China were prohibited and proscribed. All Nigerian students who obtained benevolent scholarships from undisclosed sources and Nigerian trade union leaders who attended international conferences in those countries had to be smuggled out of Nigeria through Ghana.
But this position was reversed in 1958 by the Nigeria Prime Minister, Tafawa Balewa in a policy statement in parliament which states in part:
“We shall, of course endeavour to remain in friendly terms with every nation which promises and respects our sovereignty…”
Nigeria’s untainted support for the discussion of the subject of admission of Red China into the United Nations and our bold retort when the West questioned our action is a case that cannot be glossed over. Nigeria’s Jaja Wachukwu said their reaction was nothing short of intellectual imperialism.
In 1971, Nigeria/China mutually friendly disposition blossomed into the establishment of relations at ambassadorial level. Thus a mutually and reinforcing and rewarding relationship between both countries began in earnest.
Political relations
As third world countries, Nigeria and China see their relationship as mutually reinforcing. They speak with the same voice at the United Nations and its specialised agencies and they are great advocates of South-South cooperation as a means of achieving a new international economic order which has so far remained unattainable.
Whilst China respects and admires Nigeria ’s non-aligned foreign policy application, Nigeria remains a staunch supporter of “One China” policy, that the Republic of China ( Taiwan ) is an inalienable part of China , and that the Government of the People’s Republic of China is the only legitimate Government of China. Nigeria regards Hong Kong as a trading post; it fully supported the return of Hong Kong to the People’s Republic of China in July 1997.
Economic relations
Fang Yi, former Chinese Minister of Foreign Trade and Economic Cooperation, visited Nigeria in 1972, a visit that provided an opportunity for signing the first economic, scientific and technical cooperation agreement as well as a trade agreement. There were several other visits to Nigeria , including that of a team of Chinese engineers from China Civil Engineering Construction Corporation (CCECC) in 1996 for on the spot assessment of the Nigeria Railway Project. This is aside from relations that had to do with agriculture – irrigated rice plantations in Itoikin, Lagos , water resources in Borno State and Nigeria ’s National Electricity Power Authority (NEPA), now Power Holding Company of Nigeria (PHCN), in the 1990s.
The Chinese also had something to do with troubled Ajaokuta Steel project and Delta Steel project Aladja – Chinese experts inspected these projects and the enabling agreement was signed. On May 12, 1997 during the visit of Li Peng, former Premier of the state Council but the project was plunged in the mire by alleged corruption scam in which late Sani Abacha, some of his family members, Anthony Ani, former Minister of Finance and Bashir Dalhatu, former Power and Steel Minister, were involved.
Discussion between Nigeria and China on the rehabilitation of the Nigerian Railways commenced during the Murtala Muhammed/Obasanjo regime of 1975-1979 when deliberate efforts were made to deepen relations between Nigeria and China . The Chinese side was enthusiastic to complete the job having just completed the TANZAM Railway project in East Africa . But subsequent discussions failed because of the alleged greed and corruption practices of some Nigeria leaders who wanted kick-backs the Chinese would not give.
That the Nigerian railways suffered over three decades of neglect is now history. It was against this background that the Abacha regime came in with CCECC. The contract for the project was signed December 9, 1995 with a price tag of US$528.60 million. The contract was for rehabilitation which involved supply of coaches, locomotives, wagons and guard vans, as well as restructuring of rail lines. Unfortunately, the job was not completed on target date because Nigerian contractors did not supply track materials within the stipulated period. The indication though was that over 80 per cent of the job had been completed by September 1998. But the government statement did not say whether this additional task would be undertaken by CCECC.
Information, culture, youths and sports
Relations in respect of information took some time to have a foothold because the Chinese Government, steeped in its revered communist tradition, did not think it necessary to establish a ministry of information as it is found in Nigeria and other parts of the world. Theirs was, and still is, propaganda galore. The Xinhua (New China) News Agency, founded in 1937, started it all and has now been joined by a robust network of television stations and China Radio International. Xinhua News Agency has its African headquarters in Nairobi Kenya , a bureau in Lagos and China Radio International broadcast latest developments in China to the world.
The 1980s witnessed a litany of cultural exchanges such as the Anhui Acrobatic Troupe from China which Nigeria hosted in early 1980, the Nigerian Basket Ball team which undertook a two-week tour of China as answer to the acrobatic troupe challenge, so to speak, and a series of Chinese acrobatic troupes performances at the National Theatre, Lagos in 1983 and 1985.
Regarding sports, it would be recalled that China was instrumental to the development of table tennis (ping pong), volley and badminton in Nigeria either through the attachment of appropriate coaches to the National Sports Council or conducting relevant courses for Nigerian sports men and women in China.
Thus Nigeria-China relations have come a long way. It dates back to the 1950s and was formalised in 1971.
Trade and investments
According to World Bank Weekly Report for July 7, 2008, Sino-African trade has exploded from $2 billion in 1999 to $55.5 billion in 2006 and $73 billion in 2007, growing faster than Chinese trade with the rest of the world, and making a significant contribution to China’s success.
Nigeria comes in big as that part of Africa that the Chinese are interested in. For instance, China’s recent business activities in Nigeria increased to an all-time high figure of $2.83 (N370 billion) in 2005 trade. It is believed in diplomatic circles that the increasing tempo of China’s activities is meant to consolidate her hold on Nigeria as Africa’s most important trading partner south of the Sahara. Hu Jintao, Chinese president, visited Abuja in April 2006 in reciprocity to Nigeria’s Olusegun Obasanjo’s visit to Beijing in 2005. Several economic agreements were signed and a cooperative framework developed for the realization of greater relations. It would be recalled that by mid 2002, Nigeria and China signed four agreements in Beijing when the then vice-president, Atiku Abubakar, paid a six-day official visit to China. The agreements include that on consulate matters, cooperation against illicit trafficking and abuse of narcotic drugs, psychotropic substances and the diversion of precursor chemicals. Others were on exchange of notes on provision of goods between the two countries and agreement on tourism cooperation.
On January 9, 2006, an inter-ministerial Federal government Delegation visited China to negotiate a $2.6-billion for the rehabilitation, bilateral loan meant for rehabilitation, reconstruction and development of the ailing Nigeria Railways Corporation (NRC). This NRC’s job is currently steeped in controversy.
The Chinese have invested heavily in the Nigerian oil sector. In January 2006, China’s national offshore oil company acquired a $2.3 billion majority stake in a major oil field. And while conferring with Olu Adeniji, foreign minister during the Obasanjo Administration early 2006, the Chinese foreign minister, Li Zhaoxing, announced that the new set of economic and technical agreements between Nigeria and China had started yielding results. The Chinese government then released $3.65 million (N600million) grant to Nigeria .
President Jintao’s comments on his country’s relationship with Nigeria give you a rosy picture of the relationship. Jintao, who came to Nigeria with a 40-man delegation, said “China is now desirous more than before to deepen and develop a new strategic partnership with Nigeria”. He spoke about cooperation in the area of satellite which he said has achieved obvious progress” (in fact China has launched the Nigerian satellite it helped build to space).
China has concluded arrangement to build a vehicle assembly plant in Lagos. A site close to the Lagos International Trade Fair Complex has been chosen for the plant.
Nigeria’s relations with China in the areas of agriculture, telecommunications, electricity and general infrastructure has expanded in leaps and bounds, according to Chinese Foreign Minister while speaking to a group of journalists in April 2006. He said the joint efforts of both sides in bilateral relations have maintained the good momentum of anticipated growth, encouraged by high level visits and enhanced mutual political trust and that the strategic partnership has even now pushed up an unprecedented level of cooperation between Nigeria and China in international affairs.
Chinese firms are trooping into the country to do business. In April 2005, ZTE Corporation, A Chinese firm, entered a deal with NITEL to expand Nigeria’s CDMA network following a successful 10,000 line trial in Maiduguri .
Borno State . The project is meant to provide local telecom components and other ancillary services. The Chinese Civil Engineering and Construction Company (CCECC) built the Nigerian Communications Commission building in Abuja and Huawei, a giant Chinese telecom company has started doing business in Nigeria with offices in Lagos and Abuja. A good number of young Nigerian graduates of tertiary institutions have been employed by Huawei. One only hopes the telecom technology is being passed on to them.
And China is the source of the hordes of Okada (motor-cycles) that line Nigerian roads. Shao Huixiang, Deputy Director-General of Shanghai municipality, where many of the motor-cycles come from, confirmed the increase in transactions between China and Nigeria. He noted that the back up trade destination between Shanghai alone and Nigeria amounted to about $172 million, 10.3 per cent higher when compared to the previous year.
The last five years have witnessed some major Chinese investments. They include the following: China National Overseas Oil Company Limited (CNOOC), 45 per cent stake in OPL 246 worth $2.7 billion in offshore deepwater oil field operated by Total - the French oil giant. This is reported as the CNOOC’s largest foreign investment ever. CNOOC will pay $424 million for financing, operating and capital expenses. Profits will be shared with Nigerian National Petroleum Corporation in a ratio 70:30 in favour of CNOOC. In addition CNOOC will refund $600 million already spent to Total. Oil production is expected to commence in 2008 reaching a peak of 225,000barrels a day.
Sinopec also has a three-year contract to develop OML64 and OML 66 jointly with NNPC subsidiary NPDC.
The Borno state government awarded six major contracts to Chinese construction and engineering firms to stem the wave of flooding, drainage construction to also curtail mosquito infestation, construction an all year round water channel called “water fall out”. The two Chinese firms’ China is Geo Engineering Corporation (GEC) and ECC and a Nigerian Construction firm, Sky Technical. The construction package is N6.5 billion.
· Chinese Civil Engineering Construction Corporation (CCECC) has been awarded the contract for the modernization of the Nigeria ’s one-track rail line to standard gauge rail project. The project’s first phase is worth $8.3 billion, China has loaned the Nigerian government $2.5 billion to finance refurbishment of the railway system. The railway is estimated to be 7,800 km in distance, and it will connect all the 36 states and major cities of Nigeria . This contract was signed between Nigeria and CCECC on Oct. 30, 2006. This railway contract is currently embroiled in controversy.
In year 2006, the China Development Bank (CDB) gave a $20 million financial support to Reliance Telecommunications Ltd. (RelTel) to assist the Company. In its bid to position RelTel wireless as the biggest fixed wireless company in Nigeria . Huawei Technologies, a Chinese major telecommunications giant was the facilitator of this facility by CDB.
A Chinese conglomerate, Zhuhai Minghong Group Corporation Limited surveyed the 350 acres moribund Awoomama Resort in Oru East Local Council of Imo State, agreed it would revive the resort.
While the president of the Guangdong Chamber of Commerce noted that the resort bordered between two commercial cities of Aba in Abia State and Onitsha in Anambra State , as well as yet to be realized Oguta inland port would promote effective patronage and provide job opportunities for Nigeria ’s teeming unemployed youths.
A state owned company, Genetic International Corporation of China (GICC) bought its first consignment of 100,000 metric tones of fresh cassava chips from Nigeria in July 2005. It was agreed this deal will continue over a period of six months on monthly basis. GICC expressed readiness to import cocoa beans and rubber directly from Nigeria .
China has increased its volume of agricultural export from Nigeria . Nigeria has shipped 80,000 tonnes of cassava chips to China and thereafter received an order to supply another 102,000 tonnes. China is also buying sesame seeds from Nigeria . There are currently over 500 Chinese experts and technicians in various fields of agriculture in 20 states of the Federation. They are working with Nigeria agriculturists and farmers involved in the construction of small dams.
$2.5 Billion Hydropower plant for Adamawa, to be constructed by the Chinese. Huawei $250m equipment agreement with GV Telecoms/Prestel
Nigeria shipped its ever-first consignment of fresh cassava chips to China in 2004.
Twenty Chinese companies participated in the 2007 Lagos International Trade Fair. Participation of Chinese companies in this most important international trade fair is an annual ritual.
Busty Okundaye, a Nigerian engineer with very strong links with China (he is married to a Chinese), gave a broad overview of Nigeria-China relations in an article titled ‘A template for Westward expansion’ in Business Day. He argued that between 2000 and 2003, the number of Chinese funded enterprises grew from 499 to 638, spread across 54 African countries and regions. According to him, Nigeria is now China ’s second largest export market and third largest trade partner in Africa, after South Africa and Egypt . He mentioned in particular Huawei Technologies, China ’s largest telecommunication equipment manufacturer which signed a deal to provide Nigeria USD$200 million worth of telecommunication equipment to set up a nationwide mobile phone service using CDMA technology.
Okundaye did not leave out the Nigerian communications satellite bid launched May 2007, the first Chinese satellite bought by any African country. The satellite is called Dongfanghong IV.
Put in a nut shell, the volume of trade between Nigeria and China increased from US$178 million in 1996 to US$1.44 billion in December 2001. The trade figure for 2002 was US$1.168 billion and it rose to US$1.858 billion in 2003. In 2004 the figure rose to US2 billion and stood at US$2.83 billion in 2007. China is one of Nigeria ’s top ten trading partners and it has set up 30 companies (some solely owned, some jointly owned with Nigerians) in Nigeria . These companies are involved in construction, oil and gas, technology, service and education sectors of the Nigerian economy. China has signed oil exploration contracts worth over N4 billion and its involvement in the oil sector is tied to its building a power generating station that would add substantial megawatts of electricity to Nigeria’s power sector.
Nigeria approved the purchase of 15 F-7N1 and Ft-7N1 Chinese multi-role combat/trainer aircrafts to boost the defence operations of her Nigerian armed forces in September 2003.

(http://www.businessdayonline.com)

Dan Weil

The global economic contagion has spread to China, sending shudders around the world. Chinese leaders are worried about domestic social unrest, while U.S. leaders are worried about whether China will continue loading up on Treasury securities as our budget deficit explodes.

Yet one of the few bright spots is the surprising strength of China’s banking system. Remember when that system seemed on the verge of collapse? That’s where the banks stood until the reforms of the past 10 years.

But now the picture is completely different. As former World Bank official Pieter Bottelier, now a professor at Johns Hopkins, notes, “The irony is that 10 years ago, China’s banks were among the weakest in the world and today they are among the strongest, however primitive their system.”

How did they turn things around?

The short answer is that the Chinese government imposed many of the same market-based principles used in the West. (We’ll get to why they seem to work better in China in a minute.) Officials improved regulations and supervision, introducing risk capital requirements and tightening nonperforming loan criteria and provision standards.

The government allowed banks to be listed on stock exchanges, which meant they had to report their earnings according to Western accounting standards. Now two of the world’s three biggest banks by market capitalization are Chinese: Industrial & Commercial Bank of China, which is the biggest, and China Construction Bank, No. 3.

Beginning in 1998, the government recapitalized them. Several years later, the government used approximately $60 billion of its massive foreign currency reserves to help finish the job. And banks were able to dump their bad loans onto state entities created for the purpose of holding the waste, while the banks received safe Finance Ministry bonds in exchange. Income from these restructured assets accounted for 60 percent of ICBC’s profit in 2006
Under China’s old risk-weighting system, the banks were able to declare that loans to state-owned companies carried zero risk. That allowed the banks to have huge balance sheets with virtually no capital. No more. As of Sept. 30, the average capital adequacy ratio for all of China’s publicly traded banks totaled about 13 percent, well above the government’s required standard of 8 percent.

The treatment of nonperforming loans has changed drastically as well. In the old days, such bad loans were simply rolled over, with skipped payments being capitalized into the loans. Then the government decreed that interest payments on a loan had to be received within 90 days for it to avoid being classified as nonperforming. Initially, the amount of nonperforming loans rose, but as of Sept. 30, 2008, nonperforming loans totaled only 2 percent of the loan total for the country’s listed banks. That compares with 2.3 percent for FDIC-insured banks in the United States.

The provision system, which is how banks account for loans that may go bad, has changed, too. Before the reforms of the past decade, banks didn’t have to create provisions for bad loans, regardless of the quality of their loan portfolios. Now provisions are substantial. As of Sept. 30, provisions for loan losses among the listed banks amounted to an impressive 123 percent of their nonperforming loans.

In 2003, Chinese regulators let foreign investors increase their stakes in Chinese banks from 15 percent to 20 percent. That ruling gave the banks more capital and credibility, paving the way for their initial public offerings beginning in 2005.

It also gave the Chinese institutions access to Western management expertise, though fortunately for the Chinese, they didn’t match their Western brethren’s excessive risk-taking.

And that’s still paying off: China’s publicly traded banks registered a 53 percent increase in net income in the third quarter of 2008 from the same period in 2007.

And perhaps most importantly, Chinese banks skipped the subprime party. They will, at most, have to write off 0.1 percent of their assets as a result of owning toxic U.S. securities, estimates Nicholas Lardy, senior fellow at the Peterson Institute for International Economics
But the global recession puts some of that progress at risk. China’s explosive double-digit economic growth in recent years, powered by its potent export machine, made it easy for banks to glitter. The rapid slowdown of China’s economy represents the biggest problem. China’s economy expanded at an explosive 11.4 percent rate last year. Experts estimate that pace will soon slip to 5 percent to 8 percent. While such a figure would represent nirvana for the United States now, the three- to six-percentage-point decline is similar in magnitude to what the U.S. is going through. Double-digit growth in China sent corporate profits soaring. Pretax profits totaled 11 percent of GDP last year, up from 4 percent in 2001.

“You have to be a pretty bad lending officer to find someone who’s not credit-worthy in that scenario,” Lardy says. “Now the economy has slowed, and profits will go negative very soon. Then we will learn more about the quality of loans.”

As for the financial crisis that began in the West, it hasn’t hurt China directly. But the resulting global recession has crimped demand for Chinese exports. And exports constitute a key component of China’s economy. In addition, the government has protected banks by capping deposit rates and cutting bank taxes. That allows banks to cover up some deficiencies.

So Chinese banks are vulnerable. Nonperforming loans will surely increase. Still, a crisis is unlikely. The government has many weapons to fight the economy’s deceleration—witness the recent announcement of a $585 billion fiscal stimulus plan. And the banks are much better equipped to handle loan losses now than they were years ago.
(http://spoonfeedin.blogspot.com)

ADDIS ABABA

African economic ministers will discuss proposals next week for a continental investment bank and stock exchange to promote development, an African Union official has said.

Maxwell Mkwezalamba, the African Union (AU) commissioner for economic affairs, told a news conference the proposal was to base the investment bank in Libya, restrict share ownership to Africans and get it running within two years.

The African Union is based in Ethiopia’s capital Addis Ababa and aims at promoting peace, security, stability and good governance to help development and cooperation between its 53 member states in the world’s poorest continent.

“The extraordinary conference of African ministers of economy and finance meeting in Addis Ababa on January 14 will discuss recommendations to set up an African investment bank and stock exchange, which would help mobilise resources for the continent’s development,” he said.

He said share ownership would be African, including the private sector and the African diaspora. He said non-Africans would not be allowed to own shares in the bank.

Mkwezalamba said it would take longer than two years to create a continent-wide stock exchange.
He said the ministers would also look at new ways of funding the organisation, which is proposing a budget of $170m this year. Just over a quarter of its funding comes from international partners.

Funding for the African Union is “very unhealthy and unsustainable,” Mkwezalamba said, because some member states do not even bother to pay and some foreign sources did not meet their commitments last year.

“The ministers will also review proposals for alternative sources of funding for the pan-African organisation such as levying taxes on all goods coming from outside Africa, and levying taxes on African airline tickets and insurance premiums,” he said.

Mkwezalamba said the ministers would also exchange views on the global financial crisis with a view of making Africa’s voice heard at the G20 summit in London in April.
Reuters

(http://www.newvision.co.ug/)

The House of Representatives Committee on the Federal Capital Territory on Thursday raised doubts over the competence of China Civil Engineering Construction Company to handle the $800m Abuja Metro-Line project.

Photo file

A railway line

The Federal Government signed the contract for the project in 2006, but more than two years after it took off, the committee learnt that only 12 per cent of work had been done.

It was envisaged to provide alternative and faster means of transportation for residents of the FCT by trains on completion in 2013.

Although, the slow pace of the work was largely blamed on the non-release of funds budgeted for it, the committee noted that it was more concerned about the competence of CCECC to complete the job.

At a 2009 budget meeting with the Minister of State, FCT, Mr. Chuka Odom; the Executive Secretary of the Federal Capital Development Authority, Mallam Sanni Alhassan; and the Secretary, Transportation, FCDA, Mr. Segun Awolowo, the committee recalled that the same firm had handled the failed National Railway Rehabilitation Project under the administration of former President Olusegun Obasanjo.

The committee, headed by Mr. Atai Aidoko Ali, recalled that President Umaru Yar’Adua had to put a hold on the contract owing to the alleged “abysmal” performance of the Chinese firm.

The FCT officials, who vouched for the competence of the firm, told the committee that in 2007, only N500m out of N3bn voted for the project was released.

But, there was a separate provision of N1.6bn in the FCT’s statutory budget in 2008 for the project.

They said that already, a certificate of N2.2bn had been generated.

The FCT had earlier proposed a budget of N22bn in the 2009 budget for the continuation of the project but the Federal Government cut it to N11bn.

The Chairman of the committee, Ali, however, expressed the feeling of the committee that the capacity of the firm to complete the project would have to be assessed before it would support commiting huge funds into it.

He said, “We need to examine the contract documents and the details of the agreement.

“ Nigeria must have some safeguards in the contract agreement so that in the event that the firm is incapable of going ahead with the project, another contractor can be sought for.

“The committee members will also visit the site of the project to assess the work that has been done with the releases made so far.”

Besides easing the transportation problem in Abuja , the committee was told that the project would provide about 18, 000 jobs, which would ultimately lead to “10, 000 permanent employment.”

The Speaker of the House, Mr. Dimeji Bankole, who observed the proceedings at the meeting briefly, advised the FCT administrators to commit public funds to projects they were sure could be completed for the good of Nigeria .

According to him, civil servants in particular have formed the habit of lodging funds appropriated for projects in private accounts to yield interest for them only to return the money as unspent funds.

“Well, the concern is that nobody is accounting for the interest, we need to know where the interest is going to,” Bankole added.

Meanwhile, the Chief of Air Staff, Air Marshal Oluseyi Petinrin, on Thursday told the House of Representatives Committee on Air Force that another Chinese firm was yet to supply 17 aircraft worth $551m after it had received 85 per cent of the contract sum.

Petinrin, who was defending the Air Force’s 2009 budget before the committee in Abuja, said 12 of the planes were the F7 model.

According to the CAS, the government paid $500m out of the total contract sum.

For its operations in 2009, the Air Force submitted a budget proposal of N53. 8bn, covering its capital and recurrent expenditure.

He, however, did not give the name of the firm before the committee, headed by Mr. Halims Agoda, went into a closed-door session for what it called “security reasons.”

Committee sources told our correspondent that the contract was signed by the Obasanjo administration.

The CAS, who informed the committee that it would carry out fewer capital projects this year, appealed to the lawmakers to approve the budget.

He said, “We have decided to take a few projects to be implemented this year in view of the experience in recent times that so many projects are proposed and their eventual execution are always problematic.

“It is only natural that we embark on projects that can be implemented for an efficient oriented Force.”

The committee was worried over the rising cost of maintaining aircraft by the Air Force and suggested that it could channel the money to other pressing needs.

About N270m, according to Petinrin, was spent on the maintainance of two planes by the Kaduna-based Duna Aviation Company Nigeria.

The planes were believed to be presently grounded.

(http://www.punchng.com/)

By Ademola Babalola

A messy cloud today appears over Nigerian government’s N30 Billion deal with a Chinese Firm for the supply of N 17 Aircraft, 12 F7 Aircraft and five other Chinese aircrafts for military flying operations by the Nigerian Airforce.

The deal was signed with the Chinese firm at the height of former President Olusegun Obasanjo’s financial profligacy.

Already 85 percent of the total cost of the deal had been made by Nigeria but the delivery of the aircrafts is still shrouded in uncertainties, the House of Representatives heard today during Budget 2009 defense session in Abuja.

Chief of Air Staff, Oluseyi Petinri, said the contract was awarded to a Chinese aviation firm at the cost of $551 million, equivalent of N30 billion, out of which federal government paid $500 million equivalent of N25 billion, leaving a balance of N5 billion.

Petinri made the appalling disclosure at a 2008 budget defence session of the sector with the House of Representative committee on Air force, saying government urgently needed the Aircraft to carry out its military operations within and out side the country.

He recalled that the contract proposal was earlier approved by the Federal Executive Council (FEC) with enthusiasm, regretting the lack of political will by governments in Nigeria to implement projects approved projects.

“We have decided to take a few projects to be implemented in this year in view of the experience in recent times so that many projects are proposed and its eventual execution always problematic, its only natural that we embark on projects that can be implemented for an efficient oriented force”.

He however hoped that the Federal Government would make sure the aircrafts are delivered by the Chinese firm.

He told the committee that about N270 million was used for periodic maintenance of two engines and complete overhaul of its N17 Aircraft by Duna Aviation Company Nigeria, based in Kaduna, as the Airforce wants to domesticate its operations and maintenance.

“This is the only company in Nigeria that can do intensive maintenance work on our aircraft, except Duna in Germany that manufactured the aircraft though the German company has liquidated and bought over by a Swiss aviation company”.

Earlier, the House of Representative committee chairman on Airforce, Hon Halims Agoda, condemned the colossus sums of money used by the Airforce to repair grounded Aircrafts, saying such an amount of money can be used for other relevant infrastructure in the Airforce.

He revealed that the company that manufactured the operational aircraft currently being used by the Airforce had closed, meaning that the spare parts for the old aircraft would no longer be available for procurement, posing a dire threat to the performance of the Nigerian Airforce.

The Airforce for its 2009 submitted a budget proposal of N53. 8 billion to cover its capital, personnel and recurrent expenditure inclusive of the balance of N5 billion contract sum for the procurement of the aircrafts from the Chinese firm.

(http://www.thetimesofnigeria.com/)

China has had a number of dealings with South African weapons manufacturers over the past decade, most of which have not resulted in actual weapons purchases. However, several recent China-made military technologies bear suspicious resemblances to their South African counterparts.

In 2008, China acquired a fourth-generation air-to-air missile equipped with a thrust-vector control engine. The PL-10, or PL-ASR, is comparable to the U.S.-made AIM-9X air-to-air missile, or AAM.

According to a representative from the South African Denel Group, the PL-ASR is almost a replica of its A-Darter AAM. The Denel representative told the author during an interview in Cape Town that the Chinese had contacted the company in 2001 to explore the possibility of importing fifth-generation A-Darter infrared-guided AAMs, which included a TVC propulsion system and pilot helmet-mounted displays.

In the end, Denel did not sell the technologies to China, which it regards as its key competitor in selling air-to-air missiles on the African market. Company engineers were therefore surprised to find that the Chinese PL-ASR is nearly identical to the A-Darter in exterior structure, tail engine and even the diameter of the missile body.

The company strongly suspects that China reverse-engineered its A-Darter AAM after acquiring its technological materials.

This fits a pattern that China has followed in acquiring military technologies from many sources. When seeking a new technology, China contacts a foreign manufacturer and requests substantial technical information about its product, supposedly with the intent to buy. Instead, Chinese engineers study the materials and imitate the relevant concepts and designs.

Something similar occurred in the course of China’s development of a combat helicopter. In 1996 China and South Africa signed a memorandum to jointly develop a combat helicopter, when China was in the process of building its ZW-10 helicopter.

After being given a focused inspection of the Rooivalk combat helicopter’s subsystems, China wanted to purchase one helicopter from Denel, but the South African company considered the purchase of a single aircraft the equivalent of giving away its technologies. As a result, Denel decided not to sell China the helicopter and the cooperation came to an end.

Another item that appears to have been copied from South Africa is the optical-electronic pod on China’s ZW-9 combat helicopter, which bears a strong resemblance to the Leo-II serial O/E pods produced by the Zeiss Company.

Technical experts from the Zeiss Company told the author that about seven to eight years ago Zeiss exported two sets of an earlier variant of the Leo-II O/E pods to China, intended for use on helicopters. According to the source, the Chinese side explained that they needed a large number of this type of O/E pods for civilian helicopters, and therefore would like to purchase two sets initially for testing purposes. The source said the Chinese took no further action after receiving the test pods.

Currently, both the ZW-10 and the night version, the ZW-9, are equipped with O/E detectors very similar to those on the Leo-II.

China’s interest is not only in the O/E pod technologies used for helicopters. Chinese manufacturers have also engaged in active discussions with South Africa in hopes of acquiring TV video cameras and second-generation thermal imaging cameras used in Denel’s Seeker II unmanned air vehicle surveillance system.

The top military technology that China aspires to acquire from South Africa is without doubt the unmanned air vehicle. China’s New Era Group Corporation had several rounds of negotiations with Denel on the possibility of producing in China two types of Denel UAVs, which were on display at the 2006 Zhuhai Air Show, called the Golden Eagle and the Seeker II.

China hopes to obtain the technologies to assemble these two UAVs domestically. However, according to a source from the Denel Group, negotiations on the UAV deals have come to a halt and the company has decided that unless substantial progress is made on these negotiations, the company no longer wants to spend time dealing with the Chinese.

Denel had a similar experience in trying to negotiate a deal with Chinese company Norinco for its Mokopa anti-tank missiles. The Chinese company expressed an interest in importing Denel’s technologies, but once again the negotiations ended with no result.

Since 2007, Norinco has attempted to contact the Denel Group again, saying that it wants to import the company’s G5 155-mm howitzer ammunition handling system. But Denel is not eager to enter into an agreement with China on this project; Chinese-made 155-mm howitzers have already appeared in quite a number of countries in Northern Africa, including Algeria, Sudan and Egypt.

The source from Denel did disclose that the company has successfully completed a deal with China for its 35-mm multirole machine gun. This technology in fact was exported to China 10 years ago. China seems to have upgraded this 35-mm gun to an air-defense machine gun.

China’s New Era Group Corporation has also been negotiating with Denel for the transfer of African Eagle UAV technologies. The Chinese introductory brochure of the cooperation program claims that the African Eagle UAV is capable of taking a payload of 500 kilograms, which could be six Mokopa anti-tank missiles or two Umbani MK 81 precision-guided bombs. The theoretical combat radius of the African Eagle is 750 kilometers.

China also hopes to obtain the South African Angel high-altitude and high-speed UAV attacker system. This attacker UAV is capable of carrying precision-guided weapons and attacking targets 1,400 kilometers away. The UAV is also capable of carrying A-Darter AAMs to launch unmanned aerial attacks.

The Angel attacker and reconnaissance UAV is equipped with aperture radar and is capable of conducting tactical reconnaissance missions. It can also be fitted with Mokopa active laser-guided anti-tank missiles to attack armored combat groups.

Nonetheless, the source from Denel disclosed that no substantial progress has been made on this project, indicating it may end up as one more failed deal. It remains to be seen whether China’s latest explorations with the company will yield technological information it can convert to its own purposes, however.

(http://www.india-defence.com)

Chinese President Hu Jintao Thursday exchanged congratulatory messages with his Djiboutian counterpart Ismail Omar Guelleh on the 30th anniversary of bilateral diplomatic ties.

In his message, Hu said that China-Djibouti ties have enjoyed smooth growth on the basis of mutual respect and sincere friendship since the two countries established diplomatic ties 30 years ago.

Meanwhile, the two peoples have come to know each other better and their friendship have been continuously strengthened, he said.

The two sides have carried out fruitful exchanges and cooperation in areas such as politics, economy and trade, culture, education and public health, the Chinese president said.

China and Djibouti have been supportive of each other on international and regional issues as well as on other major issues of common concern, Hu said.

The friendship between China and Djibouti has brought substantial benefits for both peoples, and promoted the development of a new strategic partnership between China and Africa, he said.

Hu expressed willingness to work with the Djiboutian side to develop their traditional friendship, promote mutual political trust, and strengthen friendly cooperation in a bid to further improve bilateral ties.

In his message, President Guelleh said Djibouti-China relations are built on the solid basis of friendship and unity.

Bilateral cooperation in various fields has borne fruit during the 30 years of diplomatic ties, and China has become Djibouti’s indispensable cooperative partner on the road to development, he added.

The Sino-Africa Cooperation Forum has brought more aid for the development of Africa, and China and Djibouti need to further strengthen their cooperative partnership not only within the bilateral frame, but also in the bigger framework of China-Africa cooperation, Guelleh said.

(http://news.xinhuanet.com/)

By Wang Ying

China Datang Corp., the Chinese power producer with investments in Laos, Cambodia and Kazakhstan, plans to explore the African market as the global financial crisis slows domestic demand for electricity.

China’s second-biggest power producer signed an accord with the China-Africa Development Fund, initiated by President Hu Jintao in 2006, to help develop “electricity and relevant industries” on the continent, China Datang said in a statement on its Web site today. The parent of Hong Kong-listed Datang International Power Generation Co. gave no details.

The global recession has slashed demand for Chinese exports, resulting in a drop in domestic electricity use and prompting generators such as China Datang to look overseas for expansion. Africa needs to attract investments of $300 billion over the next 20 years to build the energy infrastructure required to sustain the continent’s economic growth.

The $5 billion China-Africa fund backed by the government in Beijing was created to help Chinese companies invest in Africa. Shenzhen Energy Investment Co., partly owned by Huaneng Power International Inc., and the fund may build a 1.03 billion-yuan ($151 million) gas-fired plant in Ghana. Sinohydro Corp. won a contract this year to construct a hydropower plant in Kenya.

Power Demand

China may face a surplus of electricity within the next two years as demand falls and more capacity comes online, Wang Siqiang, a deputy director at the National Energy Administration, said last month.

The country’s power consumption rose 5.2 percent last year, down from growth of 14.8 percent in 2007, the Beijing-based China Electricity Council, which represents the nation’s power producers, said on Jan. 5.

Chinese exports fell for the first time in seven years in November while imports plunged and manufacturing contracted by a record as the global recession pushed the world’s fourth-biggest economy into a slump. Investment in domestic power plants fell 11 percent to 288 billion yuan last year, the electricity council said at the time.

Africa needs to add about 13,000 megawatts of generation capacity annually until 2030, which is a rate three times quicker than the 10 years since 1998, Vinod Shrivastava, president of energy consulting firm Core International, said in November.

South Africa, suffering a power crisis that’s limiting supplies to gold and platinum mines, canceled a plan to build a nuclear plant for about 120 billion rand ($12 billion) as the global credit freeze cut financing, Fani Zulu, a spokesman for state-run power utility Eskom Holdings Ltd. said on Dec. 5.

The continent’s economy expanded more than 5 percent a year for four straight years, and growth in 2008 may accelerate to 5.9 percent, the Organization for Economic Cooperation and Development and the African Development Bank said on May 11.

To contact the reporter on this story: Wang Ying in Beijing at ywang30@bloomberg.net.

(http://www.bloomberg.com/)

Chinese Foreign Minister Yang Jiechi will soon pay an official visit to Africa, the government said Thursday, in what has become a New Year ritual amid China’s courtship of the continent.

“At the beginning of every year China’s foreign minister pays a visit to Africa. This a good tradition and there will be no exception this year,” foreign ministry spokesman Qin Gang told reporters.

“Foreign Minister Yang will visit Africa.”

Qin said specifics such as where and when Yang goes would be finalised “soon,” and gave no other details.

China has built close partnerships with African nations in recent years, partly to secure resources such as oil, minerals and timber to help fuel its economic growth.

The courtship has drawn some criticism in the West due to Beijing’s links to regimes with poor human rights records, including those of Sudan and Zimbabwe.

However the World Bank said in a report last year that China’s overtures to Africa had led to a massive infrastructure revolution on the continent that was vital to reducing poverty.

Many African nations have also welcomed China’s no-strings-attached economic policies.

Yang visited four African countries in January last year.

President Hu Jintao visited several African nations early in 2007, while Yang’s predecessor, Li Zhaoxing, also made New Year trips in 2006 and 2007.

The trips have typically resulted in China landing oil and gas deals, as well as a strengthening of ties in other areas of trade.

(http://www.africasia.com)

The Internet Society of China has revealed that there were over 50 million online bloggers in the country by the end of November last year, as compared to 47 million in the same month a year ago.

Gao Lulin, deputy head of the Internet Society of China, said that the increase in the number of bloggers in the country was due to the fact that more and more Chinese wanted to express their own views about local and international events through the Internet.

The Internet Society of China, devoted to tracking development of the Internet in China, also revealed that the country had recorded its first blog in August 2002, reports the China Daily.

A Xinhua News Agency report says that there are presently more than 100 million blogs in China.

The society, however, has not revealed how it tracked the number of blogs or bloggers.

With 290 million netizens, China currently ranks first in the world in terms of its online population.

Gao said that netizens in China were not only a group interested in virtual space, but also an important force in real life.

They can even influence government policy-making, Gao added. (ANI)

(http://spoonfeedin.blogspot.com/)

TWO pieces of conventional wisdom have been overturned in recent months. First, that the commodity “super-cycle” of the past five years would, if not last forever, plateau at a higher level than ever before, based on demand from India and China.

This has not happened, with potentially disastrous results for some African countries, which have enjoyed, on average, growth rates of 5% or more for the past few years. Such growth has been based on economic reforms, but fuelled by the large increases in commodity prices.

Second, that the Chinese were in Africa to stay, as part of a long-term strategy. In practice, Chinese entrepreneurs have been the first to leave when the market turned. More than 60 Chinese mining companies have left the mineral-rich Katanga province in the Democratic Republic of Congo in the past two months, as cobalt and copper prices have more than halved. More than 100 small Chinese operators are reported to have left Zambian mines for the same reason.

The implications for Africa are many. Economic growth will be slashed. Indeed, the price declines have been so sudden and so brutal many African leaders, who believed they were doing what the west recommended, suddenly find their economies again in tatters.

Take Zambia. A combination of bad political leadership, a failure to reinvest and falling prices saw copper production fall by the early 1990s to less than a third of its 720000-ton 1960s peak. The Zambians finally voted out the party that presided over the decline and instituted a controversial privatisation programme. Riding on the commodity boom, Zambia has enjoyed a five-year boom, with production now at 600000 tons.

Now, the mines are closing as many cannot produce at the current cost, and unemployment is soaring. The value of the local currency, the kwacha, has fallen by 75% in just 45 days.

A similar if more desperate story is under way in neighbouring Congo. Under former president Mobutu Sese Seko’s misrule, by the mid-1990s the annual per capita income of Congolese was, at $120, two-thirds less than before independence. The commodity boom helped Congo and the southernmost Katanga province, where much of the mining is located, experience an up-tick.

However, Katanga is now in free-fall as many of the mines close and may well take the rest of Congo with it, since its mineral revenues make up half the Congolese budget. Indeed, the recent violence in eastern Congo may be due in part to the fact that rebels fighting the Congolese government are aware of the commodity price decline and are deliberately picking a fight against a government they know has grown weaker.

The commodity price decline has also revealed to Africans something of the nature of their friends. China’s relations with Africa are usually explained by an array of statistics, of the doubling of trade with the continent, and the thousands of companies now active, especially in the mining and oil sectors. Most have presumed this was part of a grand strategy by the Chinese state to insure against input price inflation. Actually, if the Congo and Zambia are anything to go by, it has been less permanent than predatory.

A similar retreat may be occurring at the strategic level. In 2007, it was announced that China would lend the Congo $5bn to modernise its infrastructure and mining sector. Under a draft accord, Beijing earmarked the funds for big road and rail construction projects and for rehabilitation of Congo’s mining sector, while the repayment terms proposed included mining concessions and toll revenue deals to be given to Chinese companies. The deal has gone very quiet as the copper price has plummeted. The market, not grand strategy, is the Chinese motivation in Africa.

While the Africans are understandably bitter about the sharp price decline in their exports that seemingly began with overbuilding of houses in Boca Raton, Florida, they are not without blame. The commodity boom produced something akin to the proverbial seven fat years for some African countries, but there was little effort to diversify production while the going was good. In particular, the old story of under- investment in agriculture was repeated as Africans listened to those analysts who said commodity prices would stay high forever. Now they are stuck with low prices for their exports and little else.

No doubt some African countries have benefited on balance from the commodity downturn, as food and fuel prices have fallen. Most African countries are, after all, net energy and food importers. However, the sudden price decline has proven again that African countries are not immune to the effects of the international financial crisis and that they must redouble efforts to reduce their dependence on raw material exports. A review of the actual role of China in Africa and its motivations is also necessary.

Despite the price declines, those African leaders that remain committed to competing in the international economy will do better. Government officials and businessmen in Africa seldom, if ever, mention foreign aid as a particularly important driver for growth, despite the lavish attention the western media gives to actors, musicians and others who continue to promote Africans as helpless victims who need ever-greater handouts. Today’s leaders in Africa know, especially in the light of the commodity decline, that they have made mistakes, but they also know that they will determine the fate of their countries.

# Prof Herbst is provost of Miami University of Ohio. Dr Mills directs the Johannesburg-based Brenthurst Foundation. Both have been researching in Rwanda, Congo and Zambia.

(http://www.businessday.co.za)

A Chinese-Togolese health center was inaugurated here on Wednesday in an escalating fight against malaria in the West African country.

The China-Togo Center of Prevention and Treatment of Malaria was unveiled in a hospital in the capital city of Lome, with Togolese Health Minister Komlan Mally and Chinese Ambassador to Togo Yang Min attending the opening ceremony.

Ambassador Yang said the construction of the center is part of measures announced by the Chinese government at the Beijing Summit of the Forum on China-Africa Cooperation in November 2006.

China attaches great importance to health cooperation with Togo, Yang said, adding that in the coming three years, the Chinese government will send an expert team to Togo every year with medicine and equipment.

The Togolese minister expressed gratitude to the Chinese government on behalf of President Faure Essozimna Gnassingbe.

He said malaria kills a child every 30 seconds in the world with more than 90 percent of victims recorded in sub-Saharan Africa. In Togo, the disease claims the lives of four out of 10 children suffering from it, he added.

Chinese experts arrived in Togo in early December to exchange views with their Togolese counterparts on joint fight against malaria. They have also organized personnel training on prevention and treatment of the disease.

Mally also expressed appreciation for China’s recent donation of medications and test equipment.

Malaria is a serious and sometimes fatal disease. Usually, people get malaria by being bitten by female Anopheles mosquito.

(http://news.xinhuanet.com)

Angola’s capital Luanda is the world’s most expensive place for foreigners followed by Tokyo, a public relations director for London-based human resources consultant ECA International said on Wednesday.
Josephine Woolley based her comments on a recent ECA survey which compares a basket of 125 consumer goods and services commonly purchased by expatriates in more than 270 locations.
She said long delays at Luanda’s port and damaged infrastructure caused by an almost three-decade long war continued to inflate the price of goods and services typically used by foreigners in the oil-and-mineral rich nation.
“Luanda is still suffering from the aftermath of 27 years of war. It remains dangerous, is difficult to move around safely, and it is hard to source goods of a reasonable standard there because of a damaged infrastructure,” she told Reuters.
“These factors, along with inflation, have driven up cost of living, making it increasingly expensive for expatriates.”
The end of the war in 2002 led to an investment boom by China and some Western nations which has helped turn Angola into one of the world’s fastest growing economies. The boom also helped push prices to record highs.
Despite a recent sharp drop in world food prices, a litre of imported milk can cost $3 while the rent of a small two-bedroom apartment can easily fetch $7,000 a month in a city that was built for 500,000 but is home to over five million people.
Analysts expect the cost of living in Luanda to remain high. The economy is forecast to grow 11.8 percent in 2009 and inflation to remain above 10 percent, government estimates show.
“Prices of goods for expatriates should remain high due to strong demand,” said Ricardo Gazel, a senior economist at the World Bank in Angola, noting the bottleneck at Luanda’s port.
Angola, which rivals Nigeria as sub-Saharan Africa’s biggest oil producer, was a major food exporter before a civil war devastated its agricultural sector as well as its roads, bridges and communications.
Woolley said the Japanese capital had risen up the ranks in terms of prices in the past year.
“A strong yen has made Tokyo the second-most expensive city in the world, up from 13th position a year ago,” she said.
Zimbabwe’s capital Harare used to be considered the world’s most expensive city by ECA but the human resources company stopped including Zimbabwe in the ranking because of spiralling inflation there, said Woolley. (Reporting by Henrique Almeida; editing by Michael Georgy)
(http://www.guardian.co.uk)

One of my younger brothers, the younger twin watches something on TV and starts laughing, and the rest of us who do not get the joke turn to look at him. He went on to explain that the mother carrying the kid on TV had starred some interesting memory, something awkwardly interesting that he saw in a locally produced TV program. He tells us that there was this young kid, 3 or 4 years old who was running naked around the compound, with the mother chasing after him. The mother was hurling warning epithets as she chased her son, and this was when the father came on to the scene. After observing that race for a while, he told the wife to stop chasing after the son. When she objected, claiming that she needed to dress him, the father interjected with his own warped wisdom. He said, and I quote, “let the kid run around naked, I want the neighbours to see how well fed he his.”

You will agree that this was an interesting but absurd perspective, and the basis of my argument in my quest to better your understanding of Kenya, Africa, or any other country that is not your own. Two years back, wile I was still a second year student at Egerton University, I attended a presentation of several theses by our lecturers, who had titled the event “Interrogation of the West.” The theses presented comprised many issues that affect our continent, and most offered home grown solutions, but others were just attribution theories meant only to place blame. Overall, I left that room, FASS Theatre 2, an informed man with a different perspective, one that was recently brought to the fore by my young brother, as he reiterated the story of the young naked toddler and his proud father.

That mental abstraction that you have right now, of a young naked toddler whose father wants him naked as he does his thing around the estate may as well be the symbol that defines Africa. Anybody else, me included would have thought that this kid has come from a poor family and that they cannot even afford to dress him at all. If I had any small amount of money to spare, I would have approached the mother with it and beseeched her to dress the young toddler. I would also, with some authority (because a close friend of mine studied medicine and just graduated a week back) advise her that there are dangerous diseases like pneumonia which the young toddler could contract. There are two things here: I would first be assuming that the mother is not only poor, but also uninformed if not illiterate, and secondly, if I had approached the father instead of the mother, he would have punched my face in. He does not need handouts. He can feed his own kid, and wants everybody to see it.

Similarly, most people who are new in Africa assume that most of us are poor and that we all need help. That the old man who sits in the village until the sun sets must surely be earning less than a dollar a day, and so our country and continent is ranked as on average as earning less than a dollar a day. Ever since the missionaries set foot in Africa, they were on a mission to rescue Africa, from what, I do not know, and ended up fucking up a hitherto perfectly working society. They introduced religions; though our traditional societies had they own ways of being spiritual, and that was just the start. From what I got when my lecturers presented their thesis, we were civilised in more ways than the cliché history lessons taught in our formal education programs has made us believe. I was even more proud when I took a course in International Humanitarian Law, in which I learned that most of the now text book practises in the Geneva Convention and in Law of the Hague were common practises in the traditional African society. But I digress.

Based on our own backgrounds and experiences, we tend to observe the world from that very limited perspective, our own. We assume that how we grew up was the best way that all else ought to conform for all to be well. It however takes a lot for us to discard our perceptions and embrace new ones. This is the only way that one can truly appreciate the diversity of thought and practice that make cultural exchanges such enlightening experiences. There are riches in our countries that cannot be explained in monetary terms but have yet been reduced to under a dollar a day in donor blabber. I am in know way blind to the fact that poverty is a grave reality, and I know this to be true because I see it everyday as the poor people of Africa, my country Kenya included, die of hunger, disease and poverty. But all I am saying is that not every kid running around naked with an extended stomach has Kwashiorkor hence he must be from a poor family who cannot feed him a balanced diet. He might be the well fed kid whose proud father wants him to run around naked so that the neighbours can feel jealous.

To make my point clear, I travelled north to my Grandmother’s place during the harvesting season to help in the maize harvest. After the maize was harvested and sold, I literally had thousands of shillings in my pocket, but that meant nothing, because I had no place to use the money. Food was gotten from the farm, milk from the family cows, flour from milling the maize in the store, and whatever needed to be bought could either be exchanged with maize (Maize) or bought a throw away prices. While KES 5 would buy me one banana back in Nakuru, the town I reside in, I was given five bananas when I ordered a banana in one of the stalls.

The point however is this. We have things that work for us, and general attributes highly distort this fact, especially when it comes to analysing where Africa lies in the world. People in most of these places live well for less. A dollar a day is more than enough to a man/woman with a farm where he/she grows food, rears animals, and more so a man/woman who does not need incidental materials to feel accomplished. My grandmother is ingeniously frugal such that she manages over five households, and even the neighbour’s kids with petty cash, and yet in conventional wisdom, she is a statistic in the poor category of a dollar or two a day. It is for this very reason that there may be need to embrace the absurd in order to fully understand how things work in the different countries before making general conclusions. But how the milk from the family cow, the floor and vegetables from the fields, the oxen driven plough, the fruits from the trees, the water from the well, the spacious mud houses, the eggs from the chickens, not to mention the goats, sheep, cows and dogs, each with its own value, can be integrated in defining and calculating the dollar value of poverty is for those with bigger brains than mine to determine. All I know is that the above mentioned add up to more than a dollar a day when their real values are established.
Until then, find out whether the naked kid running around the estate lacks anything first, because there is usually more than meets the eye.

Happy Holidays…
(http://marvintumbo.wordpress.com)

Joe Francis and Larry Flynt claim the economy has made America’s sexual appetite go limp, so they’re going to the one place where sex is always rampant — Congress.

Flynt (the “Hustler” guy) and Francis (the “Girls Gone Wild” dude) are asking the government for a $5 billion bailout, claiming the adult entertainment industry has taken a huge shot to the face because of the downturn — citing the fact that XXX DVD sales are down 22% from a year ago.

“With all this economic misery and people losing all that money, sex is the farthest thing from their mind,” Flynt says. “It’s time for Congress to rejuvenate the sexual appetite of America.”

Francis sees his industry like the big three automakers, only BIGGER: “Congress seems willing to help shore up our nation’s most important businesses; we feel we deserve the same consideration.”

Francis says he’s going to D.C. to personally make the pitch. Sounds like someone has a bone to pick.

(http://www.tmz.com)