CHINA AND INDIA IN AFRICA

IN RACE FOR AFRICA, INDIAN ELEPHANT RIVALS CHINESE DRAGON

Rohit Bansal

New York Daily News, March 24, 2013

Call it a deliberate clash of dates or mere coincidence, the Indian elephant and the Chinese dragon were caught courting Africa on exactly the same dates this month!

New Delhi hosted the CII-Export Import Bank Africa Conclave, an annual converge now in its 9th edition, where more than 500 projects worth some $70 billion were discussed by 900 delegates from 45 countries.

Beijing, on its part, set the stage for President Xi Jinping's visit to Africa beginning Sunday, his second overseas, hosting the Forum on Chinese Businesses in Africa and dangling lines of credit worth $20 billion. A blunt warning that investing businessmen must learn to behave followed!

The charge of the elephant remains a modest mix of development assistance (India's national budget for next fiscal assigns a modest Rs.300 crore or $54 million for Africa), lines of credit via the Export-Import Bank, and hopes that the famed Indian entrepreneurial class will manage to deliver like their predecessors have done over the decades, more often than not without state backing.

The dragon, true to form, hisses loud enough for the world to take notice, with a politico-corporate cabal led by some of the largest contingents of stationed diplomats and state-owned banks loading benign – and often fuzzy – interest regimes to sweeten the deal.

The result? Two-way trade has ballooned from about $10 billion in 2000 to almost $200 billion in 2012. Africa is now Beijing's second largest project contracting market and the fourth largest investment destination. As per data cited until April 2012, its accumulative investment in Africa had reached $15.3 billion, compared to none just over a decade ago.

India's bilateral trade with Africa has no doubt witnessed a five-fold increase in the past seven years. But it still stands at $65 billion. The target has been set now at $100 billion by 2015, against $90 billion earmarked earlier.

Despite the asymmetry between the Asian competitors, Africa isn't eating off Beijing's hand. Evidence lies in the unusual warning from the Chinese vice foreign minister to businessmen Monday.

(...) [article here]