Today’s Financial Times reports that a Chinese businessman, Larry Yung, has bought a $800m stake in Anglo American, which the paper describes as “a landmark deal in China’s aggressive acquisition of Africa resources”.
China’s increasing investment in Africa is important for the continent. Some are concerned that China does not play by the same rules as Europeans and Americans, and China’s involvement in Africa certainly brings with it problems, for example its support for the Sudanese government.
Pessimists argue that China is undermining the work of donor agencies like DFID who want to encourage better governance, whereas China does not seem very concerned about the policies of governments with which it deals.
The reality is that donor agencies are not very good at encouraging better governance anyway, regardless of Chinese involvement or not. China provides greater investment, pushing up the value of African resource assets. Over the long run, it is likely to have a huge effect in increasing wages and living standards in the continent and may well have a rather larger effect in moving Africa out of long grass of poverty than Europe and America.
Tags: Anglo American, china, dfid, Larry Yung