Entering Africa

Chinese businesses have been on a shopping spree in Africa since the mid-1990s. In Zambia and Gabon, copper mines, smelters, and iron ore mines that had been idle for a generation are operating under Chinese ownership. Chinese firms have invested in logging in Liberia, cotton plantations in Tanzania, textile manufacturing in Kenya, and telecommunications in Djibouti and Namibia.

Energy resources are the most important focus of China’s involvement. Thirty-one percent of all of China’s oil requirements are sourced from Africa, and that will increase with a purchase of significant shares of Nigeria’s delta region. Angola has become China’s largest supplier of oil, having surpassed Saudi Arabia in 2006. After buying a 40 percent share of Sudan’s Greater Nile Petroleum Corporation, China’s largest oil company demonstrated an ability to manage petroleum extraction operations to international standards. Chinese investors have also bought into Algeria’s natural gas fields.

The Chinese are not merely extractors from Africa; they are also builders—of roads, railways, stadiums in Sierra Leone and the Central African Republic, a building housing Uganda’s parliament—and traders. By mid-2006, more than 800 Chinese companies were doing business in 49 African countries, and 480 were involved in joint ventures with African firms. Total trade between China and Africa increased from approximately $10 billion in 2000 to more than $50 billion in 2006. In 10 years, Chinese trade with Africa has grown tenfold. Those figures do not include large illegal exports from Africa of timber, diamonds, or products made from endangered wildlife.

Do you wish you knew more? So should many of your peers. Laudably, the Minnesota Trade Office has a full-time trade representative assigned to research and facilitate exports by Minnesota companies into Africa, and in late March, Governor Tim Pawlenty will lead a trade mission to South Africa.

More could be done. It is not too late, even in a season of budget shortfalls, for the governor and legislature to expand the trade office by 8 to 10 people, restoring it to the size it was when Jesse Ventura took office. For a continent the size of Africa, two trade representatives would not be excessive.