China’s Big Investment

LINDSEY HILSUM:

The boys on the beach. The civil war's over now, and the people of Sierra Leone are living in peace. On a Sunday morning, Lumley Beach is packed. It's where the residents of the capital Freetown come to relax. The beach is free. But that might be about to change.

CHERNOR JALLOH, tourism minister, Sierra Leone: This sort of gate will have to be erected, constructed there, where people come in and pay a token.

LINDSEY HILSUM:

It's the latest Chinese investment plan: A $200 million resort complex comprising pagoda-roofed holiday homes, golf course, five-star hotel and helipad.

CHERNOR JALLOH:

The early bird catches the worm. Sierra Leone is ready for investment. We are a post-conflict country. At this point we cannot wait.

LINDSEY HILSUM:

No doubt rapid investment is needed. The U.N. says this is the poorest country in Africa. Seventy percent of Sierra Leoneans live in poverty, electricity is intermittent, many have no running water and 60 percent of young men are unemployed.

To Tony Blair, Africa is somewhere which needs healing or saving, and Sierra Leone is a big recipient of British aid. But the Chinese are looking at the continent through different eyes. They see it as a source of raw materials, especially oil, which they need for their own development. And Sierra Leone, fresh out of war, they think it's ripe for trade and investment.

You can see who renovated the Bintumani Hotel. Everything here is Chinese — all the construction materials and furnishings, even the signs on the toilets. The management is Chinese, too. The Beijing Urban Construction Group is a state-owned concern. They're building hotels like this all over West Africa. It's part of China's "go global" policy, a strategy to transform Chinese companies into multinational corporations.

YANG ZHAO, manager, Bitumani Hotel (Translated): Africa is a very good environment for investment, especially at the moment. Europe and the U.S.A. are too competitive. But it's not yet very competitive in Africa, and there are certain business opportunities for Chinese businessmen to embark on. That's why we entrepreneurs have come to Sierra Leone, to Africa.

LINDSEY HILSUM:

The new military headquarters, the new government offices and parliament, the stadium — all Chinese built or renovated.

SAHR JOHNNY, ambassador to China, Sierra Leone: They just come and do it. We don't start to hold meetings about environmental impact assessments and human rights and bad governance and good governance. I'm not saying that's the right thing to do. I'm just saying Chinese investment is succeeding because they don't set very high benchmarks.

LINDSEY HILSUM:

And that's exactly what's worrying anti-corruption campaigners, as China becomes the biggest new investor across the continent.

ZAINAB BANGURA, anti-corruption activist: The way the Chinese work is still very secretive, it's directly with government. You don't even know what they're doing. And they're into everything. We're saying, "We want to know the processes you're putting in place," that's all. We just want to be…because at the end of the day, this is our country.

LINDSEY HILSUM:

Thirty years ago, China was building prestige projects in Africa, like the railway from Zambia to Tanzania, trying to spread communism across the continent. It was the Cold War. The Chinese were wooing African leaders away from the Soviet Union and the West.

Now they need Africa to fuel their own growth, as a proving ground for their new capitalist model of development. In the last five years, China's activity in Africa has swept the continent. Nearly 700 Chinese companies operate in 49 countries. Trade has gone up threefold, to $30 billion a year, making China Africa's third-largest trading partner ahead of Britain.

Oil is the major interest. A quarter of Angola's oil goes to China, and the stake's growing in equatorial Guinea, Nigeria and Gabon. But it's Sudan that's got the closest links. Sixty percent of its oil exports are now bound for the People's Republic.

Pile-driving at the Higleig oilfield, on the border between north and south Sudan. The Chinese national petroleum corporation's providing capital, technology and expertise. China's industrial growth is now so fast, its oil consumption is second only to the U.S.A., and it's getting up to 12 percent of its needs from Sudan.

The Sudanese president cuts the ribbon at the opening ceremony for the first oil refinery China's built outside its own borders. No wonder he's happy about the solid crude the land produces. It brings not only wealth, but also the chance to resist western pressure.

More Sino-Sudanese ceremony, a new extension to the multimillion-dollar Khartoum refinery. Western oil companies are watching in dismay as China moves onto their turf. America's had financial sanctions against Sudan for more than a decade because of the government's links to militant Islamist groups. A Canadian company withdrew its oil investment because of pressure from shareholders over human rights. But there are no such obstacles in the path of the Chinese, to the delight of the Sudanese government.

AWAD AL JAZ:

Business is business. No other business besides the business.

LINDSEY HILSUM:

In Darfur, government-sponsored militias have driven up to two million people from their homes. Women have been raped; men murdered. But China certainly wasn't going to support oil sanctions or harsh U.N. Security Council resolutions. The resolutions were watered down, so China abstained and didn't veto.

AWAD AL JAZ:

We don't feel any interference in our Sudanese local business, or interfering any of our traditions or politics or beliefs or behaviors. So they just devote their time and their energies to do business as we planned for, and as we agreed to.

LINDSEY HILSUM:

The oil at Higleig lies beneath grazing land and villages which were disputed in decades of war between North and South. Conflict and discrimination kept people poor; development scarcely touched them. The roads the Chinese built to bring in supplies should help the area develop, and some people have benefited from electricity extended to their homes. But government attacks forced many more thousands out, as land was cleared of people to make way for oilfields. The refugees now live in poverty in Khartoum. They have their own perspective on the Chinese.

MAN (Translated):

Investment is good. It will develop our land. But the most important thing is how we are treated. In the end, the Chinese must go home. This is not their country. Then, this will all be ours.

LINDSEY HILSUM:

Chinese weapons: During the North/South war, which ended only this year, government defectors demonstrated the small arms they'd used. They were assembled in three Chinese-built factories just outside Khartoum. The European Union and the U.S., meanwhile, have an arms embargo on Sudan. China's influence is growing, and not just in Sudan, as African governments realize just how useful a little competition can be.

ZAINAB BANGURA:

If they know and they believe that China can sustain them, can support them, and China becomes a donor country, let's put it that way, then they don't care. And then what will happen, the United States and Britain will start accommodating them because they do not want them to go to China. They will think that they want to have them on their side.

So they stop bending the rules, and pretending they don't understand. So when somebody tries to change the constitution or start arresting journalists or start breaching procurement rules and regulations, they will just ignore it and pretend not to understand, because they're afraid they'll go over to China.

LINDSEY HILSUM:

Some say the Chinese are dumping cheap products on the African market, inhibiting industrial growth. But these are goods even poor people can afford. And in some countries, including Sierra Leone, China's now building assembly plants.

SAHR JOHNNY:

Chinese are investing in Africa and are seeing results, while the G-8 countries are putting in huge sums of money and they don't see very much.

LINDSEY HILSUM:

The tide is turning. If G-8 leaders don't engage China on Africa, they may find their plans to buy influence through aid and debt relief have little impact.