The China Monitor - The Centre for Chinese Studies

Photo:Picture:Urbanophile.blogspot.comDr. Martyn Davies, CCSThe China MonitorIssue 43Making it in China:The South African experiencein the Peoples’ RepublicAugust 2009

The China MonitorAugust 2009ContentsEditorial 3Dr Martyn J. Davies, Executive Director,Centre for Chinese StudiesCommentary 4Making it in China: the South African ExperienceBy Natasha Pamplin-BaileyPolicy Watch 8The China Experience for South African StudentsBy Tebogo LefifiBusiness Briefs 11A Round-up of China’s Business News from the Past MonthChina & Africa 15News Briefs highlighting Chinese Relations with AfricaThe China Forum 19Recent Events at the Centre for Chinese StudiesContact Us 20A Publication of:The Centre for Chinese StudiesFaculty of Arts and Social Sciences, Stellenbosch University© Centre for Chinese Studies, University of Stellenbosch; All Rights Reserved2

The China MonitorAugust 2009EditorialDespite a slow start, the South African community in China is growing rapidly.The Centre manages the Chinese and South African government scholarshipprogram that sends deserving students to the PRC to study. I remember whenwe sent our first group of enthusiastic students to study in China in February2005. Many have done themselves proud serving as mini-ambassadors for theircountry and continent. They are starting to return to South Africa and bringingtheir new knowledge, language skills, and above all their networks back withthem.The South African community in China, particularly in first tier cities such asBeijing and Shanghai, is growing. There were a few adventurers in the earlyyears – that is the 1990’s – most of whom never returned to South Africa.Nowadays most moving to China are going into business in China or arestudying in the country. China is not an easy environment for South Africanswith the living conditions being so vastly different from back home and thecultures so diverse. But the move of these (mostly) young South Africans toChina is of great importance in the context of the broader relationship betweenour two countries.What builds relations is trust. Trust takes a great deal of time to cultivate andgrow. Relations may be framed between governments and businesses but whatmakes relationships truly sustainable is when they are built between peoples.South Africans in China are playing this role.Dr Martyn J. DaviesExecutive Director, Centre for Chinese Studies© Centre for Chinese Studies, University of Stellenbosch; All Rights Reserved3

The China MonitorAugust 2009CommentaryMaking it in China: The South African ExperienceBy Natasha Pamplin-BaileyBeijing Language and Culture UniversitySouth Africans living in China are carving out golden opportunities in niche markets.Despite the 11 year diplomatic relations between South Africa and China it isestimated that there are less than 500 South Africans in greater China andapproximately 250 in Beijing. One of them is Brian Hendricks who has been living inBeijing for the past four years.At only 36 Hendricks is the Director, Business Development Manager and ashareholder of Trihelix, a highly successful International Business Developmentcompany. Over the past four years Trihelix has substantially expanded its clientbase and is currently being restructured. Its boutique consulting service division hasan impressive portfolio of clients.Photo:shanghaidaily.com“The DRC may still be“SouthplaguedAfricansby diseaselivingandin Chinaareabsolutecarvingpovertyout goldenand in theopportunitiesEastern partsinravagednichebymarkets.”war, but its mining sector isbooming.”Nine years ago this mechanical engineer resigned from his previous job at SouthAfrica’s Koeberg Nuclear Plant and decided to study his MBA abroad. Due to a lackof funds he had to sell everything he owned, including his pension funds. Hendricks,from the suburb of Ravensmead in Cape Town says he never looked back.“These experiences have shaped my view of the world and my attitude towards life. Ibelieve that when people of diverse backgrounds work together, great synergies canbe achieved…I started to believe that China was certainly on a rapid developmenttrajectory after studying and living with Chinese students in the mid-1990’s”, heexplains. “During my MBA studies in the Netherlands, my Chinese partner and Ideveloped a market penetration strategy for a Chinese State Owned Enterprise inthe shipping industry,” he says. The project resulted in a significant infrastructureinvestment by the Chinese government into a knowledge centre in central China.The project was one of the key rural-to-urban transition support initiatives in thatprovince and was a huge success.Hendricks adds that he was truly impressed by the forward thinking pragmatism ofthe decision makers in this project and more so in the speed of implementation offollow-up activities. “After getting relatively sound insights into China whileundertaking this successful project, I was convinced that if macro-innovation like thiswas a country-wide trend, then China’s development would continue unabated well© Centre for Chinese Studies, University of Stellenbosch; All Rights Reserved4

The China MonitorAugust 2009into the 21 st century.”Trihelix has successfully developed and driven business strategies for a Chinesesolar energy product manufacturer and opened markets for their products in Europe.One key successful result is that the company listed on the stock exchange inFrance and the share price has more than doubled in two months. “We also recentlyacquired an account for a Saint Gobain (Fortune 100) group of companies in theintegrated energy efficient building solution market in China – focusing on therefurbishment market.”“I foresee the world’s biggest electric car manufacturer coming from China in thenext ten years,” according to Hendricks.Photo: gonomad.comOver the years he has seen business deals between foreigners and the Chinese gohorribly wrong. He recalls one incident where a foreign and Chinese companyexchanged correspondence at the highest level and expressed sincere interest toexplore cooperation.“During the first official meeting the visiting party wanted to get straight to business,talking about numbers and next steps to go into due process”. However, “TheChinese wanted to understand what was in the mind of the potential partner, whattheir vision was of the cooperation, how they saw possibilities to build relationships”.The vice president of the Chinese company later told Hendricks that due to certainactions they did not believe the foreign company respected the Chinese boardroom.“This sounds insignificant and would be brushed off by many Western CEO’s as “notimportant”.“The reality is that it was the root cause of why the discussions stopped.”“China is still a developingcountry and one of itsbiggest obstacles in itsdevelopment path, is thechallenge of urbanizing thehuge rural population.”Hendricks is the only foreign shareholder of the organization on the Mainland and allhis partners are Chinese. He believes that as a South African he has been broughtup in a very diverse environment and this adds to his success. “South Africa is acountry diverse in race and culture, economically and technologically dualistic, acountry that only 14 years ago had undergone political and civil transition without awar…I also remember we had the study partners of my siblings living in our house,so it really looked like the United Nations. People from so many countries in Africa,Europe and Asia including China,” he says. Hendricks adds that growing up in thisenvironment and also formally understanding the dimensions of culture and relativedifference between major civilizations helped him to develop the tolerance andemotional intelligence needed to function in multicultural environments. He saysdespite China’s economic successes, China is still a developing country and one ofits biggest obstacles in its development path, is the challenge of urbanizing the hugerural population. “There are also problems related to the impacts on environmentdue to rapid industrialization”. He adds that these challenges also represent great© Centre for Chinese Studies, University of Stellenbosch; All Rights Reserved5

The China MonitorAugust 2009commercial opportunities for local Chinese and foreign companies.“To learn from and to engage China requires that we start to understand China inall respects. This is the task of our young generation”. Hendricks’ two nephews arestudying in Beijing and Shenzhen. One attends high school and the other justcompleted his first year at university. “Well what can I say? I have started to sowthat seed in my own family.”On the other side of town Meryl Bailey (24) is the Development Manager of Carefor Children’s (CfC) Special Needs School and Family Services Clinic. CfC is aBritish Charity that has been operating in China for more than 11 years. They workin partnership with, and at the request of, the Chinese government and help placeChinese orphans into Chinese families through long term foster Care. Bailey andher husband, Kyle, came to Beijing in July 2007 as Kyle developed an interest inthe East while working in Singapore for a sub sea construction company.Photo: Natasha Pamplin-Bailey“He started studying Chinese on his own but finally decided to take two years offwork to study the language full time which is why we came to China”, she says.“The plan was always that I would work and earn money for us, but when wearrived here the Chinese government were tightening up visa restrictions (becauseof the Olympics) and anyone below 25 years old was not allowed to work as anEnglish teacher. “However I found a job teaching business English to Executivesand did this happily for a year”. Her responsibility at CfC includes overseeing therecruiting, budgeting, spending, training, marketing and business development ofthe project.“The Chinese legal system isa hindrance as it is confusingand often changes.”“I have been in touch with teachers' recruiting agents in South Africa and variousother South African forums about this opportunity and although I have not beensuccessful in that form to date, I do hope that this organisation can bring skilledSouth African graduates to Beijing in the future. There are currently two SouthAfricans working here, myself included…I started with six children and threeteachers and we have grown within one year to seven teaching staff, fourtherapists, a special Education consultant, twelve students and two classes.Bailey says the Chinese legal system is a hindrance as it is confusing and oftenchanges. Furthermore, she says foreign professionals are still afraid to work inChina because of the unknown. “Managing locals hasn't been difficult but I wouldsay that it has been different. My local staff is amazing and very accommodatingeven if my ways seem unconventional to them!...I don't think language is essentialin my field because I'm dealing with expatriate families and only a fewadministrative locals and teaching assistants”, she explains. “But when it comes to© Centre for Chinese Studies, University of Stellenbosch; All Rights Reserved6

The China MonitorAugust 2009training locals (skills transfer) and ensuring that they are receiving informationcorrectly I feel language ability is vital,” she adds.Bailey explains if she was anywhere else in the world her age and inexperiencewould have counted against her for a position such as this, but she has been given agolden opportunity and is grateful she didn't pass up. “China is tough, but if you havea can-do, never-give-up attitude it really can be your road to success…”Ms Natasha Pamplin-Bailey,a journalist by profession, iscurrently studying Mandarinat Beijing Language andCulture University (BLCU).She is a recipient of a ChinaExim Bank scholarship forfurther studies in Mandarinlanguage and next year willtransfer to the University ofInternational Business andEconomics to further herChinese Business Studies.© Centre for Chinese Studies, University of Stellenbosch; All Rights Reserved7

The China MonitorAugust 2009Policy WatchThe China Experience for South African StudentsBy Tebogo LefifiCCS China Representative: BeijingOver the past number of years China has become a dominant economic and worldpower. During this time the Chinese government has been in the process of aneducation revolution, spending more resources than ever before towards makingChina's universities internationally competitive. Education in China has developedsignificantly in several areas. Specifically, China has developed an internationalcompetitive advantage in areas such as engineering, IT and business studies.Studying in China in these specialised programs has given South African studentsthe benefit of a first-rate education along with a unique Chinese experience.Photo: Tebogo Lefifi”As a destination of choice,China is becomingincreasingly attractive forSouth African students.”As a destination of choice, China is becoming increasingly attractive for SouthAfrican students. However in comparison to students choosing to study in Europeand Americas, the number of South African students heading east seems lesssignificant. This has however provided the select number of students choosing tostudy in China with a unique experience, development of scarce skills and networkopportunities through ”guanxi”. As a result these students are in a position to pursuecareers not only in the field of Sino-South Africa or Africa relations but also in theinternational market.Since the establishment of formal diplomatic ties between China and South Africa in1998 the two countries have become major trading partners. The total volume oftwo-way direct investment in non financial sectors between China and South Africahas surpassed US$ 500 million, while in 2008, bilateral trade reached US$ 17.8billion. Over a short period, Sino-South Africa relations has ushered uniquecorporation in trade and cultural engagements between China and Africa. SouthAfrica has become the only African country with a large corporate footprint in Chinaas large conglomerates such as Anglo-American, Sasol, SAB-Miller, KhumbaResources and Naspers have a substantial presence in China. Meanwhile China hasset up 154 enterprises in South Africa. The strategic cooperation between ICBC andStandard Bank has developed more cooperative opportunities between China andAfrica in terms of investment , skills transfer and knowledge exchange. As of end-March 2009, the two banks had cooperated on 65 projects with 9 already completed.With these growing relations it is evident that a need for greater cultural and© Centre for Chinese Studies, University of Stellenbosch; All Rights Reserved8

The China MonitorAugust 2009knowledge exchange as well as experience in both China will continue to grow. It isthis exchange of experience and knowledge that needs to be developed by bothcountries, to feed into its growing partnership.Photo: ocw.ceu.eduSince the initiation of the Chinese scholarship opportunities in the early 2000’s, asmall yet growing number of graduates have returned to South Africa while othersremained on the mainland to pursue job opportunities. Every year Chineseuniversities, Municipalities and Hanban have awarded scholarships to a selectnumber of South African students. A number of scholarships are awarded annuallyto South Africa students through the South African Department of Education and theChinese Embassy in South Africa.Out of the estimated dozen South African multinationals (SA Inc) operating in Chinaonly a few have scouted students educated in China. Others have been employedby international companies operating in China looking to exploit possible businessopportunities in Africa. To date there has been minimal recruitment on the part of SAInc in China to leverage and reward South African graduates who have experiencein China, thus leaving other multinationals to take advantage of the developing skilland language base.“The South Africa ChinaBusiness Association(SASBA) has beenencouraged by the SouthAfrican Ambassador to havea board member representingstudent’s interest.”In an effort to improve communication with students the South Africa China BusinessAssociation (SASBA) has been encouraged by the South African Ambassador tohave a board member representing student’s interest. The Association maintainscontact with the students and attempts to develop their knowledge of current Sino-South African relations and business opportunities. Furthermore. SACBA has alsocreated an online network, Chinaza, for wider access to South Africans living inChina.A strong passion and optimism for opportunities and experience is found amongstthose students studying in China. Many students have carefully considered theadvantages of studying in the Asian country. The most common reasons include anattraction to China’s growing economy and improving higher educational system, thevast difference in cultural offerings compared with other countries and also theexperience of “living in the fastest developing city in the world, but also beingconfronted by the cultural sturdiness and traditional value system that is seeminglyobsolete”Current students are confident that their skills, knowledge and experienceaccumulated from studying in China will transfer into a niche career later in life. TheChinese language will continue to grow in importance while proficiency in Mandarin© Centre for Chinese Studies, University of Stellenbosch; All Rights Reserved9

The China MonitorAugust 2009can provide added benefits when pursuing a career in the corporate world. Even alimited exposure to Chinese culture, the ability to work, study and developfriendships with other students are valuable skills in today's marketplace and canbenefit their international network base. Every year over 200,000 internationalstudents from every continent come to China, while living and studying in China hasput many students in contact with unique cultures that are vastly different from SouthAfrica’s rainbow nation.“China's position as a growingeconomic force makes thedecision to study businessand economics in China asmart one.”China's position as a growing economic force makes the decision to study businessand economics in China a smart one. Considering that 80% of new Africangovernment infrastructure projects were awarded to Chinese companies over thepast number of years, it goes without say that Africa could benefit from Africanseducated in China. There will be an increased demand for Mandarin language skillsand experience in China in the future providing a serious advantage to jobseekersgraduating in China.Ms Tebogo Lefifi is theCCS ChinaRepresentative based inBeijing. She is currentlystudying at UIBE(University ofInternational Businessand Economics). She isa recent recipient of aChinese Exim Bankscholarship for furtherstudies in BusinessMandarin and ChineseBusiness Studies.© Centre for Chinese Studies, University of Stellenbosch; All Rights Reserved10

The China MonitorAugust 2009Business BriefsThe Business Briefs section summarises key events regarding China’s economy during the month of AugustChina starts building first 10-GW mega wind farmChinastartedconstruction of thecountry's first 10-gigawatt wind powerbase in Jiuquan ofnorthwest Gansuprovince as BeijingPhoto: Tehran Timesseeks more clean powerto fuel its fast economicgrowth. The world's second-largest energy user hassaid it would bring its total wind power capacity to 100GW by 2020 from the current 12 GW, part of a broadenergy target to generate 3% of total electricity fromnon-hydro renewable energy.Chinese to launch first ever green lawsuit againstgovernment 'Breakthrough' hailed as Chinesejudge says residents may prosecute governmentover pollution claimsChina should see its first lawsuit by an environmentalgroup against authorities within weeks, state mediareported. A member of the All-China EnvironmentalFederation - which is backed by the centralgovernment - said a judge in Guizhou province hadaccepted its claim on behalf of residents who complainthey have suffered from pollution.Bank of China to buy into railway company for US$1.5 billion Bank of China may invest almost US$ 1.5billion to buy a minority stake in a railway companythat is building a high-speed rail link between Beijingand Shanghai, state media reported. The Chinesegovernment is considering floating key assets of itsthree major railway operators to help bankroll amassive expansion of its railway system. China plansto spend an estimated US$ 502.4 billion on railwayconstruction, expansion and upgrades over the nextthreeyears.China’s Yanzhouin talks to buyAustralian coalminer FelixResources forUS$ 2.9 billionChina’s YanzhouPhoto: BloombergCoal Mining is intalks to buyAustralian coal miner Felix Resources Ltd. in a cashtakeover bid worth about US$ 2.9 billion. The Chineseminer is offering slightly less than the US$ 17 pershare previously mentioned in media reports, said aperson close to the deal. China, which relies on coalfor about60% of its power and is the world’s biggest coalconsumer, has been buying coal and other resourcesfrom overseas to meet growing demand. But there hasbeen some opposition in Australia to China’s bids forthe country’s mineral resources.China ASEAN to have full free-trade area by 2010China-ASEAN Free Trade Area would be completelyoperative in 2010 as scheduled, according to sourcesfrom the Fourth Pan Beibu Gulf Economic CooperationForum held recently in Nanning city. As a new subregioncooperation scheme under the framework ofChina-ASEAN, Pan-Beibu Gulf economic cooperationis expected to attract increasing global attention.China-ASEAN bilateral trade reached US$231.12billion in 2008, up 13.9% despite an impact from theongoing global financial crisis. China and the ASEANbecame each other’s fourth largest trade partners.China urged to cutCO2 with CCStechnologyThe huge costsrequired to capturecarbon dioxide (CO2)Photo: freefoto.comemitted by China'svast coal-fired powersector is a price worth paying to cut greenhouse gasesto reasonable levels, US Energy Secretary Steven Chusaid. Carbon Capture and Storage (CCS) technologyis seen by many as the only way forward in a countrystill heavily dependent on burning coal to meet itsenergy needs. But scientists say it will actually requiremore energy consumption, not less.China Construction Bank to buy AIG Unit in FirstPurchase Since 2006 China Construction Bank Corp.,the world’s third-largest lender by market value,agreed to buy a unit of American International GroupInc. for US$ 70 million in cash, marking its firstoverseas acquisition in three years. ChinaConstruction Bank will buy 100% of AIG Finance(Hong Kong) Ltd.China to unveil plan for "new energy" by year-endCoal-dependent China will unveil a plan to foster thedevelopment of "new energy" sources, including wind,solar and nuclear, by the end of this year. China haslong been seeking to diversify away from coal, whichcurrently provides over 70% of its power. Boosting therole of other hydrocarbons such as gas and oil meansincreasing imports, which causes energy securityworries in Beijing.© Centre for Chinese Studies, University of Stellenbosch; All Rights Reserved11

The China MonitorAugust 2009Duke Energy teams with China Huaneng on cleanenergy Duke Energy Corp. has signed amemorandum of understanding with China’s largeststate-run power company, China Huaneng Group, toexplore joint projects on energy issues, includingcarbon control. The agreement is the first betweenmajor U.S. and Chinese power companies. Theagreement is nonbinding, but the memorandum saysDuke and Huaneng “may explore the possibility offorming a formal business relationship.”Sinochem agrees US$ 878.2 million strong buy ofEmerald Energy China's state-run Sinochem Corphas agreed to buy British oil and gas explorer EmeraldEnergy Plc (EMEN.L) for about US$ 878.2 million incash, the companies said. "Emerald's Syrian andColombian assets have attractive growth potential and,by bringing Emerald into the Sinochem group, willreinforce our position in the Middle East and SouthAmerica," said Han Gensheng, president of Sinochem.American Graduates Finding Jobs in ChinaShanghai and Beijing are becoming new lands ofopportunity for recent American college graduates whoface unemployment nearing double digits at home.Even those with limited or no knowledge of Chineseare heeding the call. They are lured by China’s surgingeconomy, the lower cost of living and a chance tobypass some of the dues-paying that is common tofirst jobs in the United States.Jamaica, China Pursuing Stronger BusinessPartnerships President of Jamaica Trade and Invest(JTI), Robert Gregory, along with Deputy DirectorGeneral of the China Council for the Promotion ofInternational Trade (CCPIT), Du Zetian, and ViceChairman of the CCPIT, Dong Songgen (right),attended a meeting between members of a Chinesedelegation and local private sector leaders at theoffices of Jamaica Trade and Invest (JTI) in Kingstonrecently to discuss possible strengthening of businessties between both countries.Taiwan-China Economic Ties Boom, MilitaryTensions Remain Longtime political foes Taiwanand China have seen their economic ties improvedramatically since Taiwan President Ma Ying-jeoustepped into office last year. But even as thatrelationship flourishes, China's tough military stancetoward the island remains the same.China Mobile Sees Profits Drop; 3G Growth HasBeen Slow China Mobile’s profit dropped in thesecond quarter for the first time in a decade. Theworld’s largest phone company by market value said itrecorded a net income of US$ 4.4 billion, falling fromUS$ 4.6 billion a year earlier. The carrier still managedto add 15.96 million users in the three months endingJune 30, compared with 22.5 million a year earlier. Thegiant’s efforts to promote a homegrown Chinese 3Gstandard have made little progress however. So far,3G subscribers have only passed the one-million markand growth looks slow moving forward.China announces iron ore deal with AustraliaminerChina announced aniron ore supply contractrecently with a smallerAustralian miner in anapparent effort to prodglobal producers toaccept lower prices inPhoto: textually.orgdeadlocked contracttalks. Australia's Fortescue Metals Group will sellChina iron ore for 94 U.S. cents per dry metric ton, thestate-sanctioned China Iron & Steel Associationannounced. That is below the price of 97 U.S. centsagreed to with Japanese and Korean mills for thisyear's supplies and that major suppliers wantedChinese mills to accept.China slow to invest in expensive LatAm farmlandResource-hungry China has so far passed overinvesting in high-priced farmlands of South America infavor of Africa, with its less developed commoditiesmarkets, greater need for financing and open laborlaws. Overall Chinese direct investment in LatinAmerica has been small but on the rise, according areport by the Latin America and Caribbean EconomicCommission (ECLAC). So far, China’s interest in theregion has focused on oil and metals, not agriculture.Air China DoublesProfit on Fuel-Hedging; Sales FallAir China Ltd., theworld’s biggest carrierby market value, morethan doubled first-halfPhoto: Boeingprofit as fuel-hedginggains offset plunginginternational travel. Net income surged to US$ 422million from US$ 180 million a year earlier, the carriersaid in a Hong Kong stock exchange statement. Salesfell 9.6% to US$ 33.8 billion.Foreign Direct Investment in China Fell 35.7% inJuly Foreign direct investment in China fell for a tenthstraight month in July as companies stalled expansionplans amid the global financial crisis. Investmentdeclined 35.7% from a year earlier to US$ 5.36 billion,the Commerce Ministry said at a briefing in Beijingtoday. That compared with a 6.76% drop in June.© Centre for Chinese Studies, University of Stellenbosch; All Rights Reserved12

The China MonitorAugust 2009Chinese, Brazilianpresidents mark35th anniversary ofdiplomatic tiesChinese PresidentHu Jintao and hisBrazilian counterpartLuiz Inacio Lula daPhoto: China EmbassySilva exchangedcongratulatorymessages on the 35th anniversary of diplomatic tiesbetween the two countries. President Hu, in hismessage, said the relationship had developedprofoundly, showing great potential across a broadrange of areas since the establishment of diplomaticrelations, especially the establishment of the Sino-Brazilian strategic partnership.Beijing tops Hurun rich list with 143,000millionaires The latest Hurun Report on China'swealthiest people highlights how the super-rich ofBeijing want to live their lives. Beijing has the largestnumber of wealthy people in China, according to thereport. It said there are 143,000 multimillionaires and8,800 billionaires in Beijing. There are 116,000multimillionaires and 7,000 billionaires in Shanghai.High-rollers in Beijing need to spend at least US$ 12.7million on property, cars and other luxury goods inorder to be regarded as one of the city's "newaristocrats", or upper class, the report said.Sinopec completesPhoto: wilsontai.com China's biggestforeign takeoverSinopec Group said ithas completed its US$7.5 billion acquisitionof Addax Petroleum,obtaining newreserves in Africa and the Middle East in China'sbiggest foreign corporate takeover to date. StateownedSinopec Group is the parent of Sinopec Corp.,also known as China Petroleum & Chemical Corp.,Asia's biggest refiner by volume. It wants to expand itsproduction capacity to profit from rising crude pricesthat have cost it billions of dollars in recent years dueto government caps on retail fuel prices.China Construction Bank’s Profit Beats ForecastsChina Construction Bank Corp. joined rivals includingIndustrial & Commercial Bank of China Ltd. this weekin posting profits that beat analyst estimates, on risingfee income and lower bad-loan provisions.Construction Bank, the nation’s No. 2 lender by marketvalue, had second-quarter net income US$ 4.33 billion,according to calculations by Bloomberg derived bysubtracting first-quarter results from first-half numbersreported yesterday. That compares to the US$ 3.9billion average estimate of eight analysts surveyed byBloomberg.Obama to visit China in mid-NovemberUS President Barack Obama will visit China in mid-November, the US ambassador here announcedSaturday. While Huntsman provided no further detailsabout dates, Obama is scheduled to attend the 17thAsia-Pacific Economic Cooperation leaders’ meeting inSingapore Nov 14-15. Huntsman, who is fluent inMandarin after spending time in Taiwan as a Mormonmissionary, was sworn in earlier this month. Obamahas said that he hoped Huntsman’s appointment wouldlaunch a new era of partnership between the twonations.GM Said to BePhoto: spcar.ruClosetoAgreement onSale of Hummerto ChineseGeneral Motors Co.may sign anagreement for thesale of the Hummersport-utility vehiclebusiness to a Chinese machinery maker this week.Executives from prospective buyer SichuanTengzhong Heavy Industrial Machinery Co. based inChengdu, China, are expected to arrive in Detroit earlythis week for more negotiations with GM. It will besubject to U.S. and Chinese regulatory approval beforeit will take effect.IBM Launches Analytics Center in ChinaIts China Analytics Solution Center is part of a networkof global centers that are supposed to address thedemand for advanced analytics capabilities. IBM saysChina was chosen due to its status as a global centerof economic development and skills base.China may buy out Pamodzi Gold Pamodzi Gold’smanagement may have secured Chinese backing for amanagement buyout of its Orkney and East Randmines, which are currently in the hands of provisionalliquidators. Management of Pamodzi, which issuspended from trading on the JSE, is in talks with theChina Africa Development Fund (CADF) to back theirbid to buy two of the three assets for which theliquidators have not yet found buyers.China’s Stocks to Tumble After ‘Warning’:TechnicalAnalysisChinese stocks may fall by as much as 18% within thenext three monthsas the benchmarkShanghaiComposite Index’splunge on July 29 isa “warning” toinvestors of steeperdeclines, saidPhoto: investortrip.comCarter Worth, chief© Centre for Chinese Studies, University of Stellenbosch; All Rights Reserved13

The China MonitorAugust 2009market technician at Oppenheimer & Co. TheShanghai index is rising at an “unjustifiably steepangle” and recent declines in the benchmark, includingthe 5% drop last week, are occurring in unusuallyheavy volume, he said in a phone interview from NewYork. Worth is recommending clients reduce theirholdings in Chinese stocks by as much as half.China's African Oil Imports Speed by Britain andFrance While the U.S. today is still the number oneimporter of Africa oil, China is quickly closing the gapand has already sped past Great Britain and France toemerge as Africa's second largest trading partner.China's industrial growth has made that nation thesecond largest consumer of oil worldwide. Accordingto Patrick Morris, President and CEO of Gold StarResources Corp. a Canadian-based energy resourcecompany targeting 'onshore' energy resourceopportunities in Liberia, Cote d'Ivoire and Ghana,China is using the African oil and gas markets torapidly surpass the United States from a geopoliticaland economic standpoint.China’s OpaqueOil PricingThe price of oilproducts in Chinahas always beenset by thegovernment andPhoto: People Dailythe retail price doesnot necessarilyreflect the market. And the NDRC is trying a newformula, the Petroleum Price Management TrialMethod to keep prices in check. If in 22 business daysthe crude price in the international market changes byon average 4%, the price of oil products in China willbe adjusted.Russian oil to China pins hope on pipelineA pipeline set to join China's energy demand withRussia's oil supply will spur production and sparkrefinery construction and, when fully flowing in 2012,could greatly reduce Beijing's need for crude fromelsewhere. Russian crude imports to China in thesecond quarter of this year rose by 30% from the firstthree months to average 346,692 barrels per day,a 37% rise year on year.China powers ahead as it seizes the green energycrown from EuropeChina is running away with the green technology prize.It has conquered a third of the world market for solarcells and is on a breakneck course to build 100gigawatts of wind turbines by 2020, doubling again theglobal capacity for wind power across vast stretches ofInner Mongolia and Xinjiang.Australia glides into the Chinese energy sectorEven as the European Union tries to re-invigoratetrade ties with China, particularly in the energy market,Australia, which has had cool relations with its Asianneighbor recently, forged ahead in a move termed as abig economic stimulus for the Australasian region,announcing the details of the largest trade deal in thecountry’s history, a US$ 41.6 billion clean gas dealwith China. The gas will come from the North-Westshelf and the Gorgon areas of the world’s largestisland, and be extracted by a process that will put thecarbon back in the ground, so it won’t put carbon intothe air, in technologies that are world leading in termsof carbon sequestration, Australian Minister of TradeSimon Crean said on ABC2 radio.China energy intensity down 3.35% in first halfA decline in China's energy intensity, or the amount ofenergy it uses to produce each unit of national income,picked up pace in the first half of 2009, the country'stop economic planner said on Sunday. The countryused 3.35% less energy to generate each dollar ofgross domestic product (GDP) in the six monthsthrough June 2009 than a year earlier, the NationalDevelopment and Reform Commission said in astatement on its Website.Sourced from: Guardian, Ghanabusinessnews.com,Chinesestock.org, Bloomberg, Reuters, JIS, Voanews.com,Forbes.com, Moconews, Farmlandgrab.org, Xinhua, China Daily,Tehran Times, Taragana, Alibaba.com, Neurope, Telegraph.co.uk,WSJ, Businessweek.com, Commodityonline.com,Energytribune.com,Ghanapundit© Centre for Chinese Studies, University of Stellenbosch; All Rights Reserved14

The China MonitorAugust 2009China and AfricaThe latest updates on China’s involvement on the African continent.CAD4All Premieres ZWCAD Training Centers inSouth Africa CAD4ALL Software, official exclusivelicensed distributor for ZWCAD software for the Africancontinent (excluding Egypt), this month launchedZWCAD Training Centers in conjunction with its CAD4AllTraining Academies in South Africa. ZWCAD is theleading brand in China's CAD industry, and it competessuccessfully in over other 75 countries.China funds US$ 1.2billion project forrevival of agriculture inAngola by 2012Luanda, Angola, 03 Aug– Angola is to invest US$1.2 billion over the nextfour years in the "revival"Photo: Strand Teaof agriculture and inboosting food security, thanks to funding from a creditline from the China Development Bank. According to theofficial statement published July in Luanda, the plan aimsto make use of Angola's natural resources which, beforeindependence, were some of the best in the world for theproduction of goods such as coffee, sisal, sugar caneand cotton, while at the same time creating jobs in ruraland poor areas.China willing to help Sadc generate powerThe Southern African Power Pool has estimated that SAalone will need more than half of the 102871MW ofelectricity generation capacity needed for the entireSouthern African Development Community by 2025.China has expressed interest in sharing its electricitygeneration technology and expertise with SA and itsneighbors, all of which are in need of more generating.Ambassador: EgyptPhoto: Jaunted.comconference to raiseChina-AfricacooperationThe upcoming Egyptconference willvigorously expandChina-Africacooperation, ChineseAmbassador to Egypt Wu Chunhua said in a recentexclusive interview with Xinhua. The fourth ministerialconference of the Forum on China-Africa Cooperation(FOCAC) is scheduled for November at the Egyptian RedSea resort of Sharm el-Sheikh. "The conference will beheld to comprehensively evaluate the achievements afterthe Beijing summit of the FOCAC in 2006 and draw up aplan on China-Africa cooperation for the next threeyears," Wu told Xinhua. .Chinese special envoy visits SenegalLiu Guijin, Chinese special envoy to Africa, on Fridaywrapped up his two-day visit to Senegal. Before leavingSenegal, Liu held a press conference in Dakar and toldreporters about the preparations for the 4th China-AfricaCooperation Forum ministerial meeting that is to be heldin Egypt this November and China's investment inAfrica's energy sector.Chinese Embassy donates text books to university ofGhana The Chinese Embassy on Friday donated about600 textbooks to the faculty of Arts and the Balme Libraryof University of Ghana to assist in the teaching ofChinese. This follows the signing of a memorandum ofunderstanding (MoU) between the Chinese governmentand the University in 2008, to start the teaching ofChineselanguage.Namibians Say Inquiry on China Will ExpandNamibian prosecutors investigating allegations ofkickbacksongovernment contractswith China haveexpanded their inquiry toinclude a Chinesecontract to build a keyrailroadlink, Photo: Island-Safari.cominvestigators saidFriday, indicating that they suspect a pattern ofcorruption on deals with China.Chinese oil firms to 'buy stake in Angola block'Chinese oil giants CNOOC and Sinopec said they haveagreed to buy a 20% stake together in an offshore oilblock in Angola from US oil company Marathon Oil Corp.State-controlled CNOOC and Sinopec are forming a 50-50 joint venture to buy the stake in the 5,090-squarekilometre(1,965 square-mile) field for US$ 1.3 billiondollars, the two said in separate statements. HoustonbasedMarathon will hold onto a 10% stake in the block,which has already yielded 12 discoveries, the companiessaid in statements late Friday. The field off the Angolancoast is operated by French oil company Total, whichowns a 30% stake, the statements said.South Africa wool exports to China hit recordSouth Africa, the world's second-largest exporter ofapparel wool, posted record wool exports to China duringthe 2008/09 season, an industry body said. Exports ofunprocessed wool to the Asian nation grew 53% to 21.2million kg from 14 million in the 2008/09 season, CapeWools said in a statement.© Centre for Chinese Studies, University of Stellenbosch; All Rights Reserved15

The China MonitorAugust 2009FirstRand and ChinaConstruction Bank signMoUFirstRand, a SouthAfrican integratedfinancial services group,and the ChinaConstruction Bank havesigned a memorandum of understanding focused ongrowth opportunities in the African continent. Thememorandum of understanding (MoU) specifies that thefocus will initially be on China Construction Bank (CCB)and FirstRand Bank providing joint advisory andstructuring services to: CCB's Chinese clients seeking tomake investments into entities or transactions in Africa;South African and African based corporate clients orprojects that may be of interest to Chinese clients ofCCB; and FirstRand Bank's South African and Africanbased corporate clients looking to pursue opportunities inChina.Gains Of Nigeria- Germany-China Business HubRecently, Nigeria, China and Germany established abusiness hub in Parchim International Airport located inthe North German State of Mecklenburg-Vorpommern,which many industry players believe holds greatbusiness potentials for Nigeria and her partners. ISAACAimurie x-rays the unique gains associated with thisnovel partnership.Jinchuan Group totake over MunaliMine in ZambiaMr Maxwell Mwalemines & mineralsdevelopment ministerof Zambia said thatPhoto: Mining Technology.comChina's largest nickelproducer JinchuanGroup Limited willtake over Munali Mine in Mazabuka next month.According to him, officials from Jinchuan would arrive inthe country next week to finalize the take-overarrangements. He added that "Jinchuan will become themajority shareholders with above 70% of the shares."Nigeria, Chinese govts sign US$ 697 000 contract tobuild rural schoolsNigeria and Chinese governments yesterday signed US$697 000 contracts agreement for the construction of fourrural primaries schools in four states of the federation.The benefitting states are Katsina, Kaduna and Ogunstates as well as the Federal Capital Territory.China approves Sinopec takeover of AddaxPetroleum Sinopec has won Chinese governmentapproval of its US$ 7.5 billion takeover of AddaxPetroleum, a deal aimed at securing added productioncapacity and coveted reserves in West Africa and theMiddle East. The deal is the largest ever overseastakeover by a Chinese company, although it is only halfthe size of last year's acquisition by Aluminum Corp. ofChina, with Alcoa Corp., of a 12% stake in global minerRio Tinto PLC. That deal was worth US$ 14.3 billion.China Casts Resource-Hungry Eye on Nickel MinesFollowing in the footsteps of other Chinese resourcecompanies, and leveraging off government efforts torestructure the non-ferrous metal industry and create anumber of global giants, the country's two largest nickelproducers both announced significant overseasacquisitions. Jinchuan Mining revealed plans to take a51% interest in Zambia's Munali mine, while Jilin JienNickel Industry said that it had purchased a 14.7% stakein Canada's Victory Nickel.China to continuePhoto: Newsweek.comstimulus programChina will maintain itscurrentmacroeconomicpolicy stance aimedat bolstering domesticspending as thenation continues toexperience fallout from the global recession, PremierWen Jiabao said. China’s US$ 586 billion stimulus plan,which is funding the construction of roads, railways andairports, coupled with record lending helped the economyrecover in the second quarter from the slowest growthrate in almost a decade.China Crescent Enterprises, Inc. Expands OperationsInto Africa Targeting Kenya as East African HubCrescent recently participated at the African AdvancedLevel Telecommunications Institute (AFRALTI) WiMaxConference in Nairobi in preparation to begin operationsin Kenya. The groundwork has already been laid for arapid increase in Internet penetration. China Crescentplans to position itself to provide the necessary productsand services to facilitate and profit from the inevitableInternet usage demand growth and related governmentand business technology needs in Kenya.China urges Darfur factions to negotiate peaceChina's Foreign Minister Yang Jiechi urged the warringparties in the war-torn Sudanese region of Darfur tonegotiate a peace agreement. In a wide-ranging speechon Chinese foreign policy, Yang highlighted Darfur asone of four "hotspot issues", alongside tensions overNorth Korea, Iran's nuclear program and the Middle East.China is seen as a key to ending the six-year warbetween the government in Khartoum and Darfur rebelsbecause it is an ally of the Sudanese regime, a weaponssupplier and importer of oil from Sudan.China welcomes Tanzanian youth to witnessprogress Tanzanian youth has been welcomed to Chinato witness the progress and achievements of the past 60years. "The good relations between China and Tanzaniahave been developing well with more exchange visits oftop officials between the two countries, and bilateral© Centre for Chinese Studies, University of Stellenbosch; All Rights Reserved16

The China MonitorAugust 2009cooperation strengthened in sectors of trade, agriculture,education and public health," Chinese ambassador toTanzania Liu Xinsheng said at the meeting with JoyceShaidi, Youth Director from Tanzanian Ministry of Labor,Employment and Youth Development.China's Jinchuan Group to purchase 51% shares ofMunali Nickel in ZambiaAccording to Reuters news, MaxwellMwale, the mister ofZambia's mines, said China's Jinchuan Group will buy51% of shares of Munali in Zambia and the latter plans torecover the foreign trade exports business that had tosuspend due to the falling nickel price. At present, therelative principals of Jinchuan Group have reachedZambia to carry out a field study on mining resources.Previously, Mwale said, Jinchuan will restart MunalNickel in August, and will have more than 70% shares ofthe latter's. Once Jinshan completed the relevant legalprocedure, it could restart production immediately nextmonth.Photo: Ghanaweb.comChinese scholarshipsfor 35 GhanaianstudentsGhana waved anemotional farewell to35 students' who havebeen awarded withChinese scholarshipsto study across a rangeof Universities in various cities in the People's Republicof China. The Ghanaian students are from diversebackgrounds across the country, and will study in Chinafor up to three years. The programme between therespective governments is part of a wider Chinesesponsorship of educational institution in Ghana.East Africa looking forward to reinforce partnershipwith China The East African Community (EAC) islooking forward to reinforce trade, investment andvarious relations with China, which is seen as a moreserious economic partner with the total acceptance ofmarket, EAC Secretary General Juma Mwapachu said. Inan exclusive interview with Xinhua on the sidelines of the11th annual East African Power Industry Convention,Mwapachu said that the region is ready to work withChina for development as the international financial crisisdeveloped negative effects to the world economy.Progress seen on China-DR Congo dealWorld Bank President Robert Zoellick cited signs ofprogress in talks to adjust a US$ 9 billion infrastructurefor-mineralsdeal between China and DemocraticRepublic of Congo that has raised IMF concerns. TheInternational Monetary Fund fears the contract, whichuses Congo's mineral reserves as a guarantee forinfrastructure projects, could plunge the central Africannation deeper into debt and have delayed forgiveness ofmost of the US$ 10 billion Congo already owes.China sets up language centre in NigeriaThe Chinese Embassy in Nigeria has set up a languagecentre in Abuja, dedicated to teaching Mandarin Chineseas a second language to students from toddlers to adults,PANA reported from here Saturday. The Abuja centre isthe second forum for learning Chinese language inNigeria. The first is the Confucius Institute at NnamdiAzikiwe University, Awka, in the southern state ofAnambra, offers the study of Chinese Language forDiplomas and Certificates.Chinese carrier tooperate direct flightsbetween Beijing andKhartoum A Chineseprivate carrier,Juneyao Airlines, willoperate for the firsttime direct flightsbetween Beijing andPhoto: Bangalore AviationKhartoum, a Sudanese official said. Juneyao Airlines,based in Shanghai, is mainly operating domestic servicesfrom Shanghai. The company announced recently plansto develop its activities into an international airline. Thespokesperson of the Sudanese civil aviation authority,Abdel Al-Hafiz Abdel-Rahim said that Sudan and Chinaagreed to open direct flights between the two countries.Chinese company to hand over bridge overMozambique’s Rovuma River The bridge over theRovuma River linking Mozambique and Tanzania is dueto be handed over on 30 November next, the project’smanager from China Geo-Engineering Corporation hassaid. According to Mozambican newspaper Notícias, thework’s manager gave the date saying that all that was leftto do was concrete the last section of the bridge, whichwas expected to happen this month. The bridge, calledPonte da Unidade (Unity Bridge)is 720 metres long andits road will include a shoulder of 18 metres and twolanes, one 13.5 metres wide and the other 3.25 metreswide.Congo to downsize Chinese deal in debt relief bidThe Democratic Republic of Congo announced it woulddownsize a controversial infrastructure-for-minerals dealwith China, winning IMF assurances it could be in line forswift debt relief. The IMF feared the contract to useCongo's mineral reserves as a guarantee forinfrastructure projects could plunge the African nationdeeper into debt and had delayed forgiveness of most ofthe US $ 10 billion Congo owes.China builds Mozambique agricultural technologyresearch centre A Chinese Agricultural TechnologyResearch and Transfer Centre is being built on the sitenext to the Umbeluzi Agricultural Station, in the Baonedistrict of Maputo. The construction of the infrastructure,work on which should be completed by the first quarter of2010, is the result of an agreement signed in 2008between the Mozambican and Chinese governments,© Centre for Chinese Studies, University of Stellenbosch; All Rights Reserved17

The China MonitorAugust 2009through the Science and Technology and AgricultureMinistries. Under the terms of the agreement, China willbuild two agricultural research centres – the one inUmbeluzi and the Moamba Technology Park – aninvestment of US$ 700 million.Angola and Sao Tome and Principe gain stature inChina’s energy policy Angola and Sao Tome andPrincipe have boosted their importance for China’sexternal energy policy through purchases being made byChinese state-owned oil companies, taking advantage ofthe fall in asset prices. The purchase of Addax bySinopec, approved by Beijing this month, gives theChinese oil company control of half of the four blocks inthe Sao Tome and Principe-Nigeria joint developmentzone (JDZ) and could boost its development, accordingto analysts Samuel Ciszuk and Tom Grieder, ofPetroleum World magazine.Photo: Newsgd.comChina committed tosubstantivecooperation with MaliChina on Friday pledgedto cement itscooperation with Mali asthe western Africannation's foreign ministervisited Beijing. "As Chinaand Mali will celebrate the 50th anniversary of diplomaticrelations next year, we should take the opportunity tostep up exchanges and expand substantive cooperationfor stronger bilateral ties," Chinese Vice Premier LiKeqiang told Mali's Minister of Foreign Affairs andInternational Cooperation Moctar Ouane. Ouane waspaying an official visit to China in August as guest of hisChinese counterpart Yang Jiechi.China invests US$ 552 million in Africa in first half2009 China has invested US$ 552 million directly inAfrica in the first half of the year, a report by Law InfoChina quoting the country’s Ministry of Commerce hassaid. According to the report, the amount raises China’sdirect investment in Africa to 81% from the same periodin 2008. Meanwhile, trade between China and Africancountries has dropped 30.5% to US$ 37.07 billion in thefirst six months of 2009 as a result of the globaleconomic crisis, the report added.China build agricultural technology center inMozambique A Chinese Agricultural TechnologyResearch and Transfer Centre is being built on the sitenext to the Umbeluzi Agricultural Station, in the Baonedistrict of Maputo, reported the Notícias newspaper inMaputo. The construction of the infrastructure, work onwhich should be completed by the first quarter of 2010, isthe result of an agreement signed in 2008 between theMozambican and Chinese governments, through theScience and Technology and Agriculture Ministries.Chinese company concludes work on Angola bridgeThe new bridge over the River Cunene, in Xangongo,Angola, built by the subsidiary of the China Road andBridge Corporation (CRBC) is due to soon be opened upto road traffic, the Angolan authorities announced.Thebridge, estimated to cost US$ 29 million, is 808 metreslong and 11.64 metres wide and was built over two yearsand five months. Lighting on the bridge, which has twolanes in each direction, is powered by solar panels runon Chinese technology.Kenya woos Chinese investments in infrastructure,energy sectors The Kenyan government on Saturdaycalled for more Chinese investment especially in theareas of infrastructure and energy. Vice PresidentKalonzo Musyoka said Kenya is positioning itself tobenefit from the US$ 5 billion which the Chinesegovernment is investing in Africa through the China-Africa development Fund. The statement came after hereceived Chief Executive Officer of the China-AfricaDevelopment Bank Chi Jianxin, who paid him courtesycall.Sourced from: PR.com; Macauhub; Xinhua News; Business Week;Reuters; Google; People Daily; Trading Markets; LeadershipNigeria.com; Steelguru; Vanguardngr.com; Forbes; Earthtimes.com;Ghana Business News; Modern Ghana; Sudan Tribune; Afriquejet.com;Engineering News; Zambia Post© Centre for Chinese Studies, University of Stellenbosch; All Rights Reserved18

The China MonitorAugust 2009The China Forum - Recent EventsCCS attends Rockefeller Foundation Convening for Grantees of the AsianDrivers SearchDuring August 2009, Dr Martyn Davies, CCS Executive Director and Tracy Hon,CCS Projects Director attended a Convening for Grantees for the Asian DriversSearch hosted by the Rockefeller Foundation. Four China-Africa researchgrantees conducted an initial inventory on how African countries could maximizethe benefits of their growing relationships with China, particularly with reference tothe Chinese policy support for more trade and development outcomes in Africathat could benefit poor and vulnerable people while also meeting China's nationalinterests.CCS attends panel discussion with delegation from Minzu University andChina Tibetology Research Centre - 21 st August 2009The CCS attended a panel discussion with a visiting delegation from MinzuUniversity and China Tibetology Research Centre on 21 st August 2009. Mr HaoGuangfeng, Chinese Consul-General in Cape Town also attended the meeting.The visiting delegation consisted of Mr Xiraonima, Vice President of MinzuUniversity of China, Mr Lian Xiangmin, Senior Researcher at the China TibetologyResearch Center, Mr Su Faxiang, Professor at Minzu University of China, Mr HouZhaoxun, Director of the Information Office of the State Council and Ms GongXiaodan, Interpreter. The panel also consisted of Mandarin Lecturers at theDepartment of Modern Foreign Languages at Stellenbosch University andstudents who had met with the Dalai Lama, and Ms Samantha Walbrugh-Parsadh,Assistant Director of International Office at Stellenbosch University. Thediscussion focused on the current situation in Tibet as well as Tibetan culture.Confucius Institute attends 57th Session of the International StatisticalInstitute – 16 th -22 nd August 2009Between 16 and 22 August 2009, Prof. Zhao Lixia, Xiamin University and DeputyDirector of the Confucius Institute participated in the 57th Session of theInternational Statistical Institute in Durban, South Africa.Confucius Institute participates in the Great Wall Training Program in Beijing– 8 th - 11 th August 2009Between 8 and 11 August 2009, Prof. Zhao Lixia, Xiamin University and DeputyDirector of the Confucius Institute participated in the Great Wall Training programin Beijing, which was organized by Hanban. As a new and welcome teachingmedium, Great Wall Chinese is worthwhile to know and to learn from.© Centre for Chinese Studies, University of Stellenbosch; All Rights Reserved19

The China MonitorAugust 2009Editorial TeamHayley HermanSanne MarsMatthew McDonaldDesign & LayoutJacobie Muller20