China scooping up deals in Africa as US firms hesitate

LUANDA, Angola — China’s growing demand for energy sources and profitable construction deals is leading the world’s most populous country increasingly to swoop into Africa, where it has found abundant raw materials, governments desperate for outside investments, and relatively little competition from American firms.

The Chinese, sensing Africa’s tremendous potential upside, are making strategic economic inroads into a continent that, outside of oil investments, has long been written off by most Western companies as too risky because of poor governance or threat of conflict. US companies, in particular, have been caught flat-footed by the Chinese financial strikes, according to American and other experts on Africa’s economic potential.
”China is competing for anything and everything at this stage,” said Dianna Games, a South African political and economic analyst who studies business trends in sub-Saharan Africa. ”They know Africa is wide open to them.”

In the last several years, China has either struck oil deals or built on existing ones in Angola, Algeria, Chad, Sudan, Equatorial Guinea, Gabon, and Nigeria. More than half of Sudan’s oil exports go to China, accounting for roughly 5 percent of its imports.

But trade is not limited to just oil. Chinese stakes have also risen dramatically in infrastructure projects and the mining of precious minerals, including diamonds, gold, and platinum. Trade between Africa and China was at $18.5 billion in 2003, an increase of 50 percent over the previous year. Some analysts believe that could double by the end of next year.

Boston Globe