Cape Verde: Country is an example of “sophistication” of Chinese relations with Africa

17 March 2008

Macau, China, 17 March – Cape Verde is an example of the trend for “sophistication” and diversification in China’s relations with African countries as well as how small investors are opening up the way to strengthening economic and commercial ties, according to researcher Loro Horta.

In a recently published research project, Horta, from the S. Rajaratnam School of International Studies and the Nanyang Technological University (Singapore), said that the western perception of Chinese relations with Africa was “simplistic” and Cape Verde demonstrates this.

“The stereotypical idea in some western spheres is that China and Chinese companies are only interested in raw materials and a quick profit in Africa; and that the more easily set up in despotic and internationally isolated countries, like Zimbabwe or the Sudan. This is a huge simplification,” said Horta in the study.

Despite there being “predatory behaviour,” by Chinese actors in these markets Horta said, these days, “Chinese companies are increasingly adaptable and able to be successful even in well-governed countries with traditional links to the west.”

Cape Verde is an example that “China’s economic relations with Africa are becoming increasingly sophisticated and multi-dimensional.”

Horta noted some of the main Chinese projects underway on the archipelago and that Cape Verde was a strong candidate to be chosen as one of China’s five economic cooperation areas in Africa.

“The special economic area of Sao Vicente would be initially developed as a center for industrial fishing to meet the needs of several Chinese fleets operating in the Atlantic. China also expects to make the island a point of passage for refuelling and logistical support for the thousands of Chinese ships that cross the South Atlantic,” the researcher said.

On the other side of the ocean, there have been reports of large Chinese investments in Brazilian ports, particularly in Salvador, in the state of Bahia.

In Cape Verde, public and private Chinese companies are linked to large-scale projects such as the first cement factory on the archipelago, on Santiago Island, several new public buildings, dams and basic infrastructure.

It also plans to support the supply of ships to link the archipelago’s eight islands, provides 100 student grants for Cape Verdean, doctors for local hospitals and recently cancelled Cape Verde’s debt.

“China’s influence will continue to grow. Large Chinese public groups are beginning to show interest and the Chinese government is providing large amounts of funding,” Horta said.

Amongst the areas with greatest potential in boosting economic and commercial relations is the maritime sector, as well as tourism, benefiting from the recent recognition of Cape Verde as a Chinese tourist destination.

“with its warm climate and idyllic palm-fringed beaches, Cape Verde is well-placed to benefit from the expansion of the Chinese tourist market. Political stability and low levels of crime and corruption only increase the country’s potential as a tourist destination,” the researcher said.

The first large-scale Chinese projects have already begun emerging, starting with the project of Macau magnate David Chau, in Santa Maria on the outskirts of the capital, and more recently, Stanley Ho’s interest in tourism, gaming and leisure investments in Cape Verde.

“Chau’s role in Cape Verde underlines the increasing involvement of big Macau businessmen in other points of Portuguese-speaking Africa, including Angola and Mozambique,” Horta said.

However, it has been small-scale entrepreneurs that have opened the way to boosting economic and commercial relations between China and Cape Verde, at a time when these were restricted to what was vital for the archipelago to remain on Beijing’s side in relation to Taiwan.

Small enterprises began to arrive in the mid 1990s and ‘their number was reduced initially, but continually increased as the local economy prospered and its success stories became known, “an investment pattern that was very different to that seen in countries rich in oil, such as Angola and the Sudan, in which large Chinese companies opened up the way.”

Today, around 200 Chinese stores are located in Cape Verde, particularly on the islands of Santiago and Sao Vicente, and the Chinese population totals around 2,300 people, making it the second-largest international community after the Portuguese.

In general the Chinese population ahs been “well-received” by the local population and it is recognized that their products are substantially cheaper than those imported from Portugal and other European Union countries, as well as real estate owners benefiting from a sharp rise in rental prices in urban areas.

“It was the success of Chinese businesspeople in Cape Verde that focused the attention of bigger investors and the Chinese government, opening up the way for the flourishing relationship we see today,” Horta said. (macauhub)