Libya had some harsh words for China at last month’s China-Africa Cooperation. The Foreign Minister, Musa Kasa, was quoted by Al Sharq Al Awsat, an Arabic-language newspaper, as saying that “China’s presence in Africa is neo-colonialism and aims to rule over the continent”.
It isn’t a surprise. I have long argued that China’s foreign policy faces serious challenges.
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It seems that Wenzhou’s traders are taking a hit in Dubai. Wenzhou is a city in China’s eastern coastal province of Zhejiang. It’s famed for its entrepreneurs who make up a large share of the Chinese trading overseas. It seems that those living in Dubai dipped into the property market. As this Chinese-language article states, many started out selling hardware, home electronics, and other small consumer goods. However, they soon “fixated” on the property market and even went so far to invite their relatives back home to invest.
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China Development Bank has opened a branch office in Cairo, according to Egypt’s Al Masry Al Youm. The article suggests the bank will help fund development projects in Egypt and, possibly, Africa. This is the first time I’ve heard of the bank opening a branch in the Arab world. But it is certainly consistent with the growing debate in China about establishing a “Marshall Plan” for the emerging markets. It also underscores the growing role the Middle East is playing as China’s springboard into Africa, either through Cairo or Dubai.
I was speaking at the Emirates Towers in Dubai last week. A soft-spoken manager for a large Dubai company waited until the end of my presentation before speaking up. “The Chinese banks are hungrier than the Western banks these days”, he said. “They are prepared to lend when others are not”.
I wonder if they will still have the same appetite after Dubai World’s announcement this week that it will delay payment on its $37 billion worth of debt?
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I hear that China’s sovereign wealth fund, the China Investment Corporation, is looking to Qatar. CIC’s Chairman, Lou Jiwei, was in Doha two weeks ago to sign a memorandum of agreement with Qatar Holding, the investment arm of Qatar’s sovereign wealth fund, the Qatar Investment Authority. The memorandum apparently facilitates joint-investments in China, the Middle East, and the rest of the world.
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Egypt’s former Ambassador to China, Mohammed Galaal, has written a harsh critique of Egypt’s investment relations with China. The original is available here. I’m sure none of it is new to observers of Egypt’s economy. But it’s worth repeating if only because its rare to read someone writing so candidly. It also illustrates the challenges of engagement between China and the Middle East, in particular the region’s low-cost manufacturers.
Galaal argues that a secret of China’s “miracle” is its ability to create industrial zones that attract investors. (Think of Shenzhen or Tianjin).
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I see China’s Premier Wen Jiabao has been in Cairo, speaking at the Arab League. Here‘s a link to his speech. It‘s worth highlighting. The first few paragraphs offer an illustration of how China intends to win friends in the Arab world.
Wen begins by referring to the popular saying, “If you drink the Nile water, you will return“. He is deliberately making the point that this is his second trip to Cairo. (One more than Obama?). He first visited the city three years ago.
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I see Algeria is finally cracking down on foreign workers, including Chinese workers. This article reports that the government will tighten restrictions on the employment of foreign workers and introduce preferential policies for the employment of local workers. It claims there are 45,000 foreign workers in the country of which around 32,000 are Chinese. Apparently there were rumors that the labor market was going to be flooded by 150,000 foreign employers and locals were rightly worried. The government is responding to these rumors. There is also mention that they are responding to the Chinese companies that “have control” over a large part of the construction market.
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“China cheat sheet helps investors survive”, Bloomberg, September 1, 2010
“No more silver bullets for Beijing”, Wall Street Journal, June 17, 2010
“China’s historic return to the Gulf”, Foreign Policy, April 2, 2010
'The New Silk Road' is published by Palgrave Macmillan and is available in all good bookstores and through online retailers.
