China International Fund & Zimbabwe's Diamonds

South African journalist Khadija Sharife's article "Disappearing Diamonds" shines a spotlight on the links between the notorious Hong Kong company known as China International Fund (aka the 88 Queensway Group headed by Sam Pa) and the exploitative tragedy of the Marange diamond fields in Zimbabwe. Copiously documented and a fascinating, detailed read.

Khadija's focus on CIF should not obscure the fact that other foreign companies are actively exploiting the Marange diamond fields, including South Africa's New Reclamation Group. Apparently Diamond Mining Corporation and Mdaba Resources also have foreign investors as partners. Which countries do these firms call home? I tried to find out by using google but drew a blank. Does anyone else know?

Chinese Copper Mines in Zambia: Are they improving?

Human Rights Watch has published a follow up report to their critical 2012 study. The new report, "Zambia Safety Gaps Threaten Copper Miners," monitors changes (and lack of changes) at the Chinese state-owned CNMC copper mines in Zambia. According to HRW, "The report focuses on important labor rights improvements that have been made by CNMC's subsidiaries during the last year, along with challenges that still remain for both the Zambian government and CNMC in Zambia." A Chinese version is available here.

A hat tip to Matt Wells.

"China and Africa: Think Again" lecture at JHU (Baltimore)

I will be giving a talk, "China and Africa: Think Again," at the main campus of Johns Hopkins University, Tuesday, February 19, 2013, 12 Noon -­ 1:30 PM, 526 Merganthaler. Sponsored by The Arrighi Center for Global Studies, Co-­sponsored by Department of Sociology’s Program in Global Social Change and Development, the East Asian Studies Program, and Center for Africana Studies.

USA and Chinese Engagement in Africa: GAO Study

A team at the US Government Accountability Office (GAO) has just released a long-awaited study comparing US and Chinese export financing (and development finance more broadly) in Africa, based on detailed case studies of three countries, Angola, Kenya, and Ghana.

I read it late last night and this morning. It is, quite simply, by far the best single analysis I have seen on China-Africa-US engagement in Africa. It is comprehensive, empirical, deep and broad, careful, and balanced. Readers of this blog will expect that I read it carefully. I did, and I'm almost surprised to find that I have nothing but applause for their work. A few highlights:

• Evidence from our Department of Commerce point out that European firms, not Chinese, are our main competitors for host-country government contracts in the three countries covered by the study. 
• Compared with the Chinese Eximbank, which supports its companies enthusiastically in the three case study countries, the U.S. Ex-Im has only provided a total of two loans to governments in the case study countries since 2001 (both to Ghana)
• "Chinese firms are innovating and adapting quickly to local markets, such as in Kenya, where a Chinese firm in this [telecoms] sector has established one of Kenya’s largest training centers."
• "Counterfeit goods and related products from China have adversely affected U.S. firms’ sales and reputation, especially in Kenya among our case-study countries."
• "The Angolan government’s requirement that foreign firms take local firms as partners has posed some challenges for U.S. firms, while the Ghanaian and Kenyan governments’ strict requirements that foreign firms hire local workers have resulted in Chinese firms’ hiring more local workers for construction projects in these countries."
• "China’s data also include data on the number of Chinese laborers in Africa and a few African countries, including Angola. The United States does not have comparable data on U.S. workers in Africa and in countries like Angola."

There is a lot more of interest in this study. The team first contacted me for an interview in April 2011, so they have been working on this for quite some time. Although I had some (infrequent) interaction with them, I admit that I approached the final report with some trepidation. I've seen some pretty awful "research" on China-Africa sponsored by other US government agencies, and error-filled studies done by researchers at the World Bank. But as citizens and taxpayers, we ought to be pleased by this careful account. I hope it gets the attention it deserves.

Reflection of a Chinese Investor in Africa: Guest Post

This guest post by KF is reproduced with permission from the Comments section of my blog post, Nigerians Protest Conditions at Chinese Construction Project. I welcome other guest posts, particularly from Africans and Chinese with experience in the field.
 

As Prof. Brautigam noted, there is a huge cultural conflict in terms of work／business ethics and expectations towards labour. However, in my experience, after many periods of labour disputes, the companies acclimatise themselves to the locales in which they operate over time.

My parents (retired) had no concept of a holiday and often wondered why businesses closed on Saturdays and Sundays. Understanding they had come to a foreign country to invest, it was natural to them to work all the time. My father (the Bwana) himself would often join in the labour to demonstrate the task or to modify the task to enhance efficiency or complete a more complex task- innovation to African contexts. Even I (still in high school) was drafted into a foreman capacity, secretary, and sales office when the occasion required (all unpaid, of course), while all my expat classmates holidayed in UK or South Africa at their parents' multinational employers' expense.

Should we view the mega Chinese-DRC project as "aid"?

A reader asked this excellent question:

Thanks for all your excellent articles and The Dragon's Gift - my understanding of Chinese involvement in Africa has been significantly improved. However, regarding this article (n.b. my article on The Economist) I wanted to question one comment on the Sicomines deal in DRC. You say "the Congo Sicomines project, which is financed by non-concessional loans from China Eximbank."
 
However, SAIIA Johanna Jansson's detailed paper on the Sicomines deal (http://www.saiia.org.za/occasional-papers/the-sicomines-agreement-change-and-continuity-in-the-democratic-republic-of-congo-s-international-relations.html) implies that the final version of the deal does comply with OECD-DAC ODA definitions:

pg. 12 The OECD–DAC classifies a loan to a developing country as official development assistance (ODA) if it is: provided by official agencies, including state and local governments, or by their executive agencies; ... is administered with the promotion of the economic development and welfare of developing countries as its main objective; and ... is concessional in character and conveys a grant element of at least 25 per cent. The loans extended by means of the Sicomines agreement are provided by China Exim Bank, which is owned by the Chinese government and thus to be seen as an official agency. The credit line’s main objective is to finance post-conflict reconstruction in the form of infrastructure construction and refurbishment, which is to be considered promotion of economic development. The third and last element of OECD–DAC’s ODA definition is the grant element. This is a way to calculate that the cost for the loan is low enough – that it is concessional.38 The loan conditions provided in the original 2008 agreement did not meet the requirements for concessionality. However, in the revised 2009 version, the interest rate for the infrastructure loans was reduced from 6.6% to 4.4%.39 Currently, the grant element is estimated by the IMF and the World Bank to be at least 42%, which far exceeds the 25% minimum level required by OECD–DAC.40 This means that in its revised form, the loans extended under the Sicomines framework comply with the OECD–DAC’s definition of ODA.

Could you comment further on this difference? I would be very interested to hear your thoughts. 

Here are my thoughts. The finance does not qualify as ODA. The main reason is that although the finance was (supposed to be) extended by an official executive agency of the Chinese government, China Eximbank, it is not China Eximbank that agreed to change the interest rate. Rather, the implementing consortium of companies agreed that if the (variable) interest rate from China Exim Bank, which was set at LIBOR plus 100 basis points, rose above the rate of 4.4% where it was when the agreement was signed, they would pay the difference. This was a business risk they undertook, not a foreign aid transfer.

I wrote about this case in a paper published in 2011; the link is on this blog under the research tab:

The Chinese consortium agreed that if the bank interest rate on the loan (LIBOR plus 100 basis points) rose higher than the rate of 22 April 2008 (about 4.4 per cent), the Chinese consortium would be responsible for the difference.

My source for this was this document: "Avenant No. 3 à la Convention de Collaboration Relative au Developpement d’un Projet Minier et d’un Projet d’Infrastructures en République Démocratique du Congo du 22 Avril 2008 – 2009, October." See Article 7. Note that this agreement is not signed by China Eximbank, but by the Chinese investing consortium members.

Interestingly, the financing that we thought had been lined up for this project appears to be less firm than we all thought. According to Johanna's latest research, as of December 2012, China Exim Bank has still not released any money, and it is increasingly looking as though they may not finance this project. The project sponsors have been shopping the project around to other banks. 

Nigerian workers protest conditions at Chinese construction projects

Breaking news: Nigerian workers protest employment conditions at CCECC Lagos-Badagry highway construction site. As reported by Business Day, Nigerian workers complained:

 ``The management does not have any medical facility for the workers. Our salaries are poor and there is no increment.

``The suffering is too much. I cannot pay the school fees of my children,’’ Johnson said.

Mr Jack Aguto, who has worked with the company for six years, said that he was hired as an electrical engineer but had been working in other areas with no additional wage.

``It is sad that the money CCECC pays as salary is meagre. We need a basic salary. We work for seven days in a week and earn peanuts,’’ Aguto said.

A carpenter, Mr Henry Okoye, told NAN that he was currently earning about N17, 000 monthly as a junior worker, after working for three years as a casual.

``We work every day -- both on public holidays and weekends -- with no allowances. I was hired as a carpenter, but I am forced to work as a gardener and bricklayer on the same pay,’’ Okoye said.

This is a huge cultural conflict. Aside from the long hours, some of this reflects Chinese cultural assumptions about flexibility: work is work, and if the need is to develop the garden or lay bricks, and there isn't a need for carpentry, then carpenters should lay bricks. I've seen this with Chinese supervisors, who appear to be flexible enough to pitch in and move wheelbarrows if one needs to be moved. I have a photo from a factory visit in Nigeria of the Chinese translator, sweating as he picked up and moved big boxes full of brake pads.

a h/t to Ndubisi Obiorah

School Construction: World Bank versus China

In The Dragon's Gift, I made the argument that the Chinese approach to funding aid projects employs a high degree of financial control. As one African official told me: "with the Chinese, you never see the money." This has drawbacks for ownership, but is likely to mean that corruption and embezzlement is lower with Chinese aid, and the promised projects actually get built. Maintenance of course is another issue, something I also addressed in the book.

A school in Tanzania         credit: Worldcrunch.org

      Over the past six years, the Chinese government has been fulfilling a commitment to build 100 (or so) primary schools across Africa. My (so far minimal) anecdotal research in two countries on this has turned up an interesting phenomenon: at least one school out of the typical three built in a given country has been located in the home town of the country's leader. The schools are also typically of a much higher, gold-plated standard, something that is a showpiece, but difficult to sustain.
Both of these findings support my argument that Chinese aid is all about politics, symbolism, and soft power -- and not a simple swap-for-resources, as it has often been portrayed. 
     How do we do it in the West? This morning I've been reading a dissertation by one of my students, Ryan Briggs. At one point he gives the startling example of a World Bank funded school construction project in Malawi. 
     Briggs reports that of the World Bank's target of 1600 classrooms, half were never built, and according to the World Bank's own report, 340 of the 858 classrooms that were built were "left unfinished ... implementation of this component was unsatisfactory and contributed to the premature depletion of funds" (World Bank, 2001: 8).  Further, "the Government failed to provide the necessary oversight ... accounts were not well maintained ... records were not properly kept ..." (2001: 15). 
     Neither approach seems terribly satisfactory for making an impact on education. But in terms of financing school construction, the Chinese at least are dealing pragmatically with governance as it is, rather than governance as we wish it to be.

A h/t to Ryan Briggs.

Source:  World Bank (2001) "Implementation completion report (IDA-28100; pp -p9380)
primary education project on a credit in the amount of SDR 15.1 (US$ million
equivalent) to the Republic of Malawi for a primary education project." Technical
report, World Bank.

Eastern Promise (and Eastern Errors) in Little Africa

Kit Gillett at The Global Mail interviewed me for a January 25, 2013 feature story on Africans in China, "Eastern Promise in Little Africa." The article is extremely well-written. Kit took a lot of care, and created a fascinating piece of work, with a number of interviews and photos. It looks like a good, balanced human interest story. However, even a careful reporter like this can get things wrong in presenting the big picture that frames the story. 

credit: Jeffrey Lau           Guangzhou's Little Africa

Early in the article, Kit writes "In recent years China has invested heavily in infrastructure projects across Africa, often in exchange for subsidies on natural resources." Yes, many Chinese companies have been building infrastructure projects, some $35 billion per year, but these are rarely Chinese "investments" -- they're construction contracts. Only about 20 to 25 percent are financed by Chinese banks or the Chinese government. As for the idea that this is "often" done "in exchange for subsidies on natural resources", I have yet to see a case where a Chinese firm got a subsidy on natural resources in exchange for building infrastructure. (If anyone has seen such a case, please comment). When natural resource exports enter into a construction deal (and this is quite rare) they enter in as a way to secure the loan with an export stream. In the cases I have seen, the exports are priced by the market**. We can't call this an off-take arrangement, as often there is no relation between the export stream and the construction project. But it operates in a parallel manner.

Toward the end of the article, Kit makes another error, in saying that "China has made efforts to promote friendship. China directly invested USD45 billion in the region in the first six months of 2012 alone."

Anyone who tracks FDI figures knows this is way wrong. In all of 2012, according to official figures at MOFCOM, China's entire overseas investment to the world amounted to USD77 billion:

 In 2012, Chinese investors made direct investment overseas in 4,425 enterprises in 141 countries and regions. Direct investment overseas amounted to US$ 77.22 billion, up by 28.6% year-on-year. Of which equity investments and other investments were US$ 62.82 billion, accounting for 81.4%, and earnings reinvested were US$ 14.4 billion, accounting for 18.6%.

As I noted in a recent presentation at New York University, Chinese direct investment in Africa is generally only a small fraction of that in the rest of the world: on average, maybe 5 percent. The total stock of Chinese FDI in Africa amounts to about USD14.5 billion, by official figures (unofficially it is likely higher, but not enormously so). I don't know where Kit got the preposterous figure of USD45 billion for just six months of flows. Possibly it was in Foreign Policy Journal, where a similar figure was posted. But it's a reminder that even when doing great micro-level research, it's important to make equal effort to present the big picture correctly.

A hat-tip to Yanyin Zi.
---------
**Angola presents an exception, where from what I can tell, CIF, a Hong Kong-based broker enjoying a joint venture with Sonangol, Angola's state-owned oil company, seems to have gotten oil cheaply and sold it on at market rates to the Chinese -- but that's not "China" getting a subsidy)

New Report on China Development Bank

Adina Matisoff has come up with another hard-hitting look at Chinese development bank's overseas financing for Friends of the Earth and BankTrack: China Development Bank’s overseas investments: An assessment of environmental and social policies and practices. Here's a synopsis of the report, from a blog posting by Michelle Chan: 

"As one might guess, CDB is a major financier of natural resource and infrastructure projects abroad. The report dives into four examples of CDB’s overseas transactions: the Alberta tar sands, the Shwe oil and gas project in Burma, Reliance Power’s ultra mega coal power plants in India, and Asia Pulp and Paper’s notorious logging activities in Indonesia. As evidenced by these ‘Dodgy Deals,’ CDB’s portfolio is as full of environmentally and socially risky projects as any of its international peers. But critically, CDB’s environmental and social policies fall short compared to its competitors.

However, a new China Banking Regulatory Commission Directive offers some hope. A few years ago, the CBRC launched an impressive new policy, the Green Credit Policy, which essentially requires Chinese banks to ensure that large, environmentally risky projects are in compliance with environmental laws before the banks lend them money. The policy was the first of its kind in the world, but it was really oriented towards ensuring that projects in China were compliance with Chinese law. But in February 2012, the CBRC issued a new Directive to the Green Credit Policy, which specifically instructs Chinese banks to adhere to international environmental and social financing standards in overseas transactions.

The new directive provides an opportunity for communities around the world affected by Chinese bank-financed deals -- such as the massive Rio Blano mine in Peru or the Merowe dam in Sudan -- with a leverage point to stop or improve an environmentally and socially sensitive project.The Directive also offers sustainable finance advocates both in China and internationally a chance to promote the implementation of this pioneering new banking regulation, and to work with a new group of globally important banks.

Finally, it allows those promoting international social, environmental and financial norms -- such as the Extractive Industries Transparency Initiative on revenue transparency, the Equator Principles for project finance, and the UN Declaration on the Rights of Indigenous Peoples --  to enlist the participation of powerful Chinese players that have been generally absent from these initiatives."

It's high time that the big Chinese banks step up to the plate on the Equator Principles. A hat-tip to Richard Carey.

Sweet and Sour: China and Africa Behind the Headlines

Here's a link to an interview highlighting some of my general work on China and Africa, broadcast by the Australian program Up Close. There still seems to be strong demand for this kind of overview topic. Old news for the small group of people now doing research on China's African engagement. Frankly, much more interesting to drill down into specific topics: agricultural engagement and special economic zones are two I'm working on now.

Is US FDI to Africa more transparent than China's?

Guess which country, the United States or China, refused to release official data on its firms' investments in resource-rich Libya, Chad, Gabon, Guinea, Mozambique, Uganda and Zimbabwe in 2010?

If you guessed China, you'd be wrong. Yes, it was the U.S.

I have long made the point that the Chinese data on foreign direct investment (FDI) to Africa does not reflect the reality. Yes, official data is openly published (unlike aid, which remains very secretive). And yes, since 2002, the Chinese Ministry of Commerce has reported outward FDI using the standard OECD/IMF definitions of FDI. Yet because of exchange controls, and because so much FDI goes through tax havens (like Hong Kong, the British Virgin Islands, and the Cayman Islands) it is nearly impossible to track the ultimate
destination.

I always assumed that the US was a lot better in this regard. I was wrong. At least as posted on the website of the OECD's statistics bureau, the US claimed that 2010 FDI data by US companies in twelve African countries (almost all resource-rich) was "confidential". What's more, in 2010 the second most popular destination for US FDI flows to Africa was ... Mauritius (a tax haven) where US firms sent $1860 million.

Surely we can do better than this!

Links I Liked

Happy New Year from China in Africa: The Real Story. Here are a few recent links to interesting material on China in Africa, China and Global Governance, and one (short) new piece of mine:

Michael Geiger and Chorching Goh, "Chinese FDI in Ethiopia" World Bank. A report of a survey taken in mid-2012 of 69 Chinese enterprises active in Ethiopia. This is a good example of real information, painstakingly collected via fieldwork. Too often analyses of Chinese FDI simply report figures from African offices of investment promotion. These can bear little resemblance to actual investment.

Li Liu,  "Land Acquisition in Africa for Agricultural Purposes: The case of sugar cane plantation and sugar mill in Ethiopia," master's thesis at the Swedish University of Agricultural Sciences. This case study analyzes the potential profitability of an investment that has, in fact, not (yet) gone forward. It's technically sophisticated but from my end, raises more interesting questions: if it was so profitable on paper, why didn't this investment go forward?

Herman Wasserman, "China in Africa: A Long Affair," Rhodes Journalism Review, No. 32 Reports on a content analysis of South African media reporting on China, other BRICs, and European/Western powers. Content was more balanced than expected.

Deborah Brautigam, "Is China Causing Africa's Free Press Problem?" a short commentary published by Rhodes Journalism Review, No. 32. If you're interested in this issue, see my commentary on "Winds from the East," at Pambazuka (January 2011).

Global Governance 2022 Fellows Program:  While not specifically on China-in-Africa, this interesting program has two groups of fellows focused on China's role in international energy governance, and in international development assistance. A hat tip to Richard Carey.

Chinese Mining Investment in Peru in Comparative Perspective

Amos Irwin (Fletcher School) and Kevin Gallagher (Boston University) have a new working paper exploring Chinese mining investment in Peru. These researchers are painstaking and methodical, and build up their findings with extensive fieldwork, interviews, and careful gleaning of news reports. Their earlier research on Chinese finance in Latin America (published at the Inter-American Dialogue, where Sinologist/Latin Americanist Margaret Myers is leading the China and Latin America program) is a model of careful scholarship, so it's a pleasure to see them venturing into a new area. Here's the abstract of the new study:

Chinese investment in Latin America has exploded in recent years, leading observers to worry that Chinese companies may transplant poor labor and environmental practices to the region. In this Discussion Paper, GDAE’s Amos Irwin and Kevin P. Gallagher evaluate the economic, environmental and social impacts of Chinese mining in Latin America and compare that performance to other major foreign and domestic firms in the same sector. Based on new quantitative inspection data from Peru, the researchers find that the Chinese company Shougang Hierro Peru has not performed significantly worse
than its foreign or domestic counterparts. In fact, a US-based firm has been among the most egregious violators of Peruvian and global standards as of late.

Chinese investment in the region is so recent that only one mining company has been operating long enough to assess its impact. Shougang Hierro Peru has been widely denounced for its environmental and social record, which has been decried in the literature as far worse than that of comparable foreign-owned companies. Much of this literature blames a “culture clash,” concluding that Chinese companies operate irresponsibly in Latin America because they are predisposed to poor labor and environmental standards.

Using new government data and historical archives, Irwin and Gallagher find that while Shougang performed poorly on many indicators, when compared to other foreign and domestic mining companies its poor performance has not stood out in recent years. Rather, the Peruvian government has continually failed to force mining companies to comply with their investment commitments, respect government and global standards, or negotiate with their unions.

They conclude that the Shougang case study does not necessarily determine that future Chinese mining companies will be more likely to bring poor environmental or labor practices to Latin America than other foreign and domestic competitors. High social and environmental costs are endemic to mining in Latin America. Consistent with the broader literature on the subject, this study shows that nation-states like Peru cannot count on foreign or domestic firms to self-regulate. To truly maximize the benefits from
natural resource extraction, and to mitigate the risks, nations need to stiffly regulate, monitor and discipline firms operating in the sector—regardless of the firm's origin.

I'm not sure that we have a comparable (published) comparative study of mining investment in Africa, although the Human Rights Watch study in Zambia that I've blogged on came close.  I hope this study will help stimulate researchers working on similar China-Africa issues.

Is China Really Building 100 Dams in Africa?

I've just seen a short article on the website of the Oxford University China-Africa Network stating that Beijing is involved in "more than 100 dams" in Africa.

Really?

Here's what the author, Dr. Harry Verhoeven, says: 

"Beijing especially is using its formidable technical expertise in hydro-infrastructure and immense foreign reserves to resurrect dam-building overseas: in half of all African countries, from the Sudanese desert and the Ethiopian lowlands to the rivers of Algeria and Gabon, Chinese engineers are involved in the planning, heightening and building of more than 100 dams. The tens of billions of US dollars and thousands of megawatts involved in these projects have so far remained off the radar in the China-Africa debate, but are possibly more consequential for the future of the African continent than the exports of oil, copper and other valuable resources."(emphasis added)

Verhoeven cites a 2009 publication as his source for this statement: Michael Kugelman (ed.), Land Grab? The Race for the World's Farmland. Washington DC: Woodrow Wilson Center for Scholars, 2009. Verhoeven doesn't provide a page number, but I searched through this online publication for "dams" and "100" and found nothing relevant to this claim. Sources aside, this claim is problematic for several reasons.

It's true that there has been a resurgence of interest in building hydropower dams in Africa, and that Chinese banks and construction companies are part of this. (This interest has not been "off the radar" however. I wrote about it in The Dragon's Gift. Peter Bosshard at International Rivers has been following this trend and wrote about it for Pambazuka.)

International Rivers recently produced the 2nd edition of a report on Chinese interest in dam building. It is probably their database of media reports that is the ultimate source for this statement. Yet International Rivers has also been prone to exaggeration on this issue. I found this with the spin that accompanied their earlier report on Chinese "dam building".

In 2010, International Rivers released a list of (only) 25 dam projects that were said to have Chinese involvement, in Africa, as of 2008 (map to right).  Although the map and list implied that these were current and active cases, this is what I found (and blogged here on January 28, 2011), on looking into each case: 

1. Four were Chinese foreign aid projects, usually quite small, completed between 1982 and 1996.
2. Three involved repairs or expansions of hydropower plants (i.e. new turbines, etc.), not dams. 
3. Ten appear at the present moment to have been MOUs or expressions of interest that went nowhere. 
4. Three seemed to have construction contracts signed recently & appeared to have financing lined up, but hadn't started construction & so could still fall apart (Ethiopia-Neshi; Togo-Adjarala; Gabon-Grand Poubara). [note: The Gabon project will now not be financed by the Chinese, as the associated mine, Belinga, was recently awarded to an Australian company.] 
5. As of January 2011 only 5 of the listed projects were dams currently under construction or completed recently (Ethiopia-Tekeze; Ghana-Bui; Congo-Imboulou; Sudan-Merowe; Botswana-Dikgatlhong).

It does no service to our understanding of this important issue to create yet another stylized picture that appears to be way out of proportion to the reality. 

If you write about Chinese involvement in building dams in Africa, why not spend a little time and effort to dig into these cases and come up with numbers that you can stand behind?  Remember what Steven Mufson and John Pomfret, former Washington Post Beijing bureau chief, wrote on February 28, 2010: “inflating the challenge from China could be just as dangerous as underestimating it.” I got that quotation from International Rivers, by the way, and send them a tip of the hat.

Note: This blog posting was slightly revised on January 8, 2012. I removed some snarky language that unfairly generalized about advocacy NGOs. I am impressed by the new work being done at International Rivers and their efforts to push for accuracy.  Anyone reading this blog should also see the comments section for a robust response and explanation from the author, Dr. Harry Verhoeven, who stepped up to the plate to provide more information about his research, and from Peter Bosshard at International Rivers.

Whatever Happened to These Chinese Agricultural Investments?

I'm at the 2012 African Studies Association Annual Meetings in Philadelphia, where I'm going to present a work-in-progress on Chinese "land grabs" (or not) in Africa, on Saturday. Leaving aside the importance of the issue for African smallholders and subsistence farmers, it's a fascinating project for a researcher. It's also very hard to get good, up-to-date information. This summer I hope to do additional fieldwork on this issue. But summer is a long time away. I thought it might be helpful to see if any readers are already "in the field" or recently returned, and if the blog could post updates from the field. Feel free to email me with information. Here are a few of the projects and puzzles that are still unsolved.

(1) Malibya investment in Mali. This project hit the headlines in 2008 or so, when it was revealed that the government of Mali had offered 100,000 ha in the Office du Niger to a subsidiary of the Libyan sovereign wealth fund, Libyan African Investment Portfolio. Here's a link to the "Convention" signed between Mali and Libya. Subsequently, the project, Malibya, contracted with a Chinese construction company, China, China Geo-engineering Construction Company Group (CGCOC).  CGCOC mainly does construction, but it does some construction under a BOO or BOT model (CGCOC calls this "investment and operation"; others would say "Build, Own, Operate" or "Build, Operate, Transfer").

There is no hint I could see that CGCOC is an investor in the Malibya project. But another Chinese company, the agribusiness firm Yuan Longping High Tech (HLHT), was also involved in the project. Most reports said that YLHT was supplying expertise and seeds. Yet a Chinese language report, on another of China Geo-engineering's websites, said that YLHT had set up a joint venture with 30% ownership:

  2008年6月，中地几—马经理部正式与国家杂交水稻中心主任袁隆平院士签订了合作协议，由中地集团公司和中心联合组成中方，与马里比亚农业公司在马里共同成立“马里利中杂交水稻研发与生产合资股份公司”。同年11月，合资公司正式注册成立。按公司章程规定，公司的全部资金由利方筹集，利方占70%的股份，中方负责技术和协调，占30%股份。

So far, I haven't found anything else. The project is clearly underway. But who are the investors, Libyans? Chinese and Libyans? If Chinese, which firm(s)? Does Mali have any equity, given their huge contribution of land? If you have information on this project, please share it.

[updates to come]