Africa: All Roads Lead Back to China

26 May 2011

Across Africa, China has become known as the agent of mass construction, wisely bartering infrastructural development - chiefly mining-specific - for long-term access to strategic resources. In the process, China foregoes the usual Western opium, of capital returns from the sale of resources.

But then China has no need for capital returns. One primary reason for Beijing's policy banks such as China Export-Import Bank (China Exim) earmarking 79 per cent of investment to mining-specific development (including mega-dams, railways, roads, and ports) is to recycle Beijing's foreign exchange reserves (estimated at US$3 trillion) into Africa. Another, as outlined by the China Exim clause, is redirecting China's cheapened goods - such as cement, and labour, to Africa, amounting to no less than 50 per cent of total contract value.

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