CBS news: "China's Africa Play" that said: "It has been widely reported that China recently purchased half the farm land under cultivation in the Congo." But what do we really know about Chinese "land grabs" in Africa?
Let's look today at the Congo claims. While I haven't actually seen any reports that "China" has purchased half of Congo's cultivated farm land (was the author mixing up China/Congo with the story of Korean firm Daewoo in Madagascar?) there is a lot out there about a "3 million hectare" Chinese oil palm plantation alleged by many to be underway in the Democratic Republic of the Congo (DRC). Beneath the hyperbole, there actually is something to the ZTE plantation story.
In May 2007, Digital Congo reported that ZTE, one of China's premier telecoms equipment and services companies, with investments in the DRC going back at least to 2000, planned to invest "un milliard" (one billion) dollars in a joint oil palm biofuels venture estimated to cover 3 million hectares. This would have been an enormous concession. And the project was a reality. But was it really 3,000,000 hectares? Or 300,000? Or 100,000? Or 250? And why would a telecoms company be investing in oil palm?
As the story spread around the internet, the mystery deepened.
In August 2007, the DRC Council of Ministers approved the proposed project, at 100,000 hectares. A November 3, 2007 report in La Prospérité said that the project would be 100,000 hectares when fully developed. However, in a January 14, 2008 interview with Le Potential, the Chinese ambassador in the DRC said that the ZTE project would cover "300,000 hectares" of oil palm. In May 2008, an Associated Press report gave a figure of 2.8 million hectares.
Here's a solid fact: ZTE is definitely interested in supplies of industrial oil palm. And it has established a subsidiary to pursue this interest. In May 2009, in Tianjin, China, ZTE's Agribusiness Corporation signed a deal with TEDA to jointly establish ZTE Agribusiness Tianjin Edible Oil and Bio-energy Industrial Base in Nangang Industrial Park. Over the next five years, the story said, ZTE Agribusiness planned "to invest 880 million dollars ... on 200,000-hectare land abroad" with the plan of expanding to "one million-hectare overseas agricultural land in ten years". Other reports mentioned ZTE investments in the DRC, Indonesia, and Laos. The industrial processing would apparently all be done in Tianjin: this does not bode well for the transfer of industrial expertise to the DRC.
In a July 2009 interview with China's news agency Xinhua, ZTE's regional manager Zhang Peng said that the planned project in the DRC would be 1 million hectares and provide thousands of local jobs. The project was still being described in the future tense.
But in February 2010, Africa-Asia Confidential reported that in 2008, Congo had offered the modest sum of 250 hectares to ZTE. Delegations from ZTE seem to have visited Congo's Ministry of Agriculture at least twice to discuss the project, but "three years after the MOU nothing has been done and according to the Ministry of Agriculture 'nobody talks about it anymore'."
So what's the real story in the DRC? Stay tuned. And if you know more, please comment!
This is, so far, the only really large Chinese land investment in Africa for which there is robust evidence. As I wrote in The Dragon's Gift, the figure of 100,000 hectares seems most plausible, with a possibility of expansion. This is big, but it's not 3 million hectares. And it still might not go anywhere. Comments and additional evidence welcome.
For commercial reasons ZTE wants to leave the Congo. Hence the contacts with MTN.
As I see it the "landgrab" deal has something to do with the ownership quarel between ZTE and the Congolese state.
In dec 1997 Laurent Kabila visited China and received a 200 million yuan loan. Kabila visited ZTE and a 49/51 (Congolese State/ZTE) JV (Congo China Telecom) was started.
The Congolese governement considers that the 200 million loan gives it the right to the 100 % of the cy as ZTE did never make a financial input itself.
I can imagine that in Kinshasa giving away a million square km of wild forest could at that time be considered a bargin chip...
Given the fact China has only 1/3 of arable land compare to India, but manage to feed her people without importing major crops ( China became a major food donor under UN in recent years), China has much to offer to African countries in agriculture business in terms of technology and management. The only problem is African governments' policy. IMHO, African countries should be united on banning exports of major crops out of continent, given so many Africans are still in hungry. This would made so called "land grab" an opportunity rather a problem.
Interesting contributions. I wondered also whether the lack of :"progress" on the oil palm project was due to the problems ZTE was having on the telecoms fronts. And also wondered whether or not access to land featured as a way to secure the earlier telecoms loan. But if the loan was issued in Chinese currency (200 million rmb), this marks it as a foreign aid "concessional loan" from the Eximbank, and in my experience, these are not secured with land/resources. One thing is clear: now that it is building a palm oil refinery in Tianjin, ZTE does have an interest in oil palm, something that surprised me.
Thanks for the note on ZTE’s interest in oil palm plantations elsewhere, I hadn’t seen that before. The story of the company’s proposed investment in agriculture in the DRC is interesting, but at the moment I see it mostly as a case of ‘big announcements, little/unclear outcome’ or at least ‘big announcements, very much slower and more complicated implementation process than the headlines suggest’ that I find we see quite a lot of when we try to dig deeper into the actual China-Africa story on the ground.
According to the interviews I’ve conducted with a rep from the Congolese Ministry of Agriculture in March and November 2009 as well as civil society representatives, ZTE has indeed shown interest and visited the DRC on numerous occasions to discuss the investment, as you mention. The concessions were to be located in Equateur, Bandundu, Orientale and Kasaï Occidental provinces. The last time a ZTE delegation visited Kin was March 2009. But to date ZTE have been very imprecise in their requests and I’ve been told that it wasn’t even decided whether they would look at farming maize, establishing oil palm plantations or perhaps consider livestock farming? And as you mention, the 250 hectare concession that was initially offered in 2008 hasn’t even been touched to date.
So at the moment it does look like a stalled deal – a case of ‘much ado about nothing’ – but in that context the July 2009 newspaper interview with ZTE’s regional manager is quite interesting. Whatever the company’s intentions are with this, at least they haven’t completely dropped the idea... I don’t know whether the current situation is an indication of low will or capacity among one or both of the parties to implement the agreement, if it is due to the global economic downturn or perhaps a result of overblown media reporting of preliminary deals...
Do you know what I think?
I think that the person citing the 3 000 000 ha deal probably read a Chinese report on it and just google translated it which adds another zero to any figure.
I often google translate Chinese articles and it translates large numbers with an extra zero because of the different "counting system" used in Chinese vs Western languages (4 zeros vs 3).
Just something worth remembering for anyone who uses automatic translation of Chinese articles...
Just read an article on ZTE leasing 10 000 ha of farmland in Sudan (http://www.sudantribune.com/spip.php?article34444).
What do you make of this information? Credible?
They don't quote anyone from ZTE or the government.
Sigrid, that's a great comment. I have also seen this happen with Google translator.
On Sudan, see my more recent post.
Looking for information about ZTE in Congo, I found this paper by the Centre for Chinese Studies and and the Rockefeller Foundation which confirm once again the hypothesis of a 3 million hectares' deal. For anyone interested it says:
"In 2007, a memorandum of understanding (MOU) was signed between the Congolese Ministry of Agriculture, Fisheries and Livestock farming and ZTE, the Chinese telecoms provider.150 The MOU pertained to a US$ 1 billion large-scale agricultural project by means of which 3 million hectares of land in Equateur, Bandundu, Orientale and Kasaï Occidental provinces would be used for development of an oil palm plantation".
The paper by the Rockefeller Foundation and the Center for Chinese Studies referenced above relied on media reports for their statement. See the reference in endnote 150 (repeated below).
This is not the confirmation of a hypothesis, but the repetition of one. For an update from Ph.D. student and former Center for Chinese Studies researcher Johanna Jansson, see her comment above.
150. Allafrica.com (2007). “Congo-Kinshasa: Biocarburant - La RDC doit faire le choix entre le palmier elaeis et le jatropha curcas”. Published 10-07-2007, accessed 16.04.2009 from http://fr.allafrica.com/stories/200707100187.html
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