China Hearts Africa: Beijing Does Deals, Not Gifts

Thanks to Paul Kedrosky for this gem:

Good piece in Time (sic.) on China’s expanding love affair with Africa:

The ambition, speed and scale of Chinese involvement in Africa is extraordinary. According to Chris Alden, author of China in Africa, two-way trade stood at $10 billion in 2000. By 2006, it was $55 billion, and in 2009 it hit $90 billion, making China Africa’s single largest trading partner, supplanting the U.S., which did $86 billion in trade with Africa in 2009.

… Beijing doesn’t do gifts; it does deals. In Congo, China’s infrastructure-for-mines deal irked the International Monetary Fund (IMF). The Fund argued that Congo’s guarantee to China that it would recoup at least $3 billion in minerals was an IOU on Congo’s national assets and therefore a new debt. That fell afoul of debt-write-off conditions, which require that the debtor take on no new loans. “If the Congolese take the Chinese deal,” said a Western official familiar with the negotiations in mid-2009, “they will not get any more [Western] support.” A standoff ensued. An earlier deal, in 2007 with Angola, also outraged the IMF. It had been negotiating a new loan with Angola for years, with carefully calibrated conditions to block corruption and alleviate poverty. By paying Luanda $5 billion in return for oil concessions and infrastructure contracts, China effectively made the IMF redundant. [Emphasis mine]