It’s been 20 years since the Forum on China-Africa Cooperation was first held. Another summit is planned for September 2021 in Dakar, Senegal. Meanwhile, Chinese and African officials are reviewing and reflecting on their two-decade relationship.

China’s growing engagement with Africa has had a positive, albeit uneven, effect on Africa’s economic growth, economic diversification, job creation and connectivity.

China-Africa relations are mostly organised via government to government relations. But the perceptions and wellbeing of ordinary people also need to be better considered.

In 2016 the pan-African research institute Afrobarometer published its first study on what Africans think of their governments’ engagement with China.

The study found that 63% of citizens surveyed from 36 countries generally had positive feelings towards China’s assistance. Some things that stood out were China’s infrastructure, development, and investment projects in Africa. On the flip side, perceptions of the quality of Chinese products tarnished the country’s image.

In 2019/20, Afrobarometer conducted another wave of surveys. Data from 18 countriesgathered face-to-face from a randomly selected sample of people in the language of the respondent’s choice – was collected before the COVID-19 pandemic. The survey questions covered how Africans perceive Chinese loans, debt repayments, and Africa’s reliance on China for its development.

Preliminary findings show that the majority of Africans still prefer the US over China as a development model, that China’s influence is still largely considered as positive for Africa, and that Africans who are aware of Chinese loans feel that their countries have borrowed too much.

This is important because – as both African and Chinese leaders reflect on their engagement – these findings should allow them to build a forward-looking relationship that better reflects African citizens’ opinions and needs.

Figure 1: Perceived positive influence of China | 18 countries | 2014-2020. Afrobarometer

US vs China

The surveys found that Africans still prefer the American development model over the Chinese one. The Chinese development model hinges on state-led policy planning while the American model emphasises the importance of the free market.

Table 1: China as best model for development | 16 countries | 2014-2020. Afrobarometer

Across the 18 countries surveyed, 32% preferred the American development model, while 23% preferred the Chinese model. Overall, this hasn’t changed much since 2014/15, but a few country-level shifts emerge.

In Lesotho and Namibia, the US has surpassed China as a preferred development partner. In Burkina Faso and Botswana, China is preferred. Angolans and Ethiopians, who were not included in the 2014/15 survey, are partial to the American model. However, 57% of Ethiopians and 43% of Angolans believe that China’s influence is having a positive impact on their countries.

Analysts have argued that the Chinese development model is dynamic and multifaceted. It has changed over time depending on the context and period. African governments need to decide what aspects of the Chinese model are best for their countries.

A closer look at responses from the 2014/15 and 2019/20 surveys shows that in countries where China has invested mainly in infrastructure, perceptions have held steady or become more positive. This includes Ghana, Nigeria, Uganda, Guinea and Côte d’Ivoire.

China’s popularity rises in the Sahel

Perceptions of China have changed for the better in some countries in the Sahel region. Some of these countries are among the most neglected and conflict-ridden in the world.

Strategically, China has been deeply involved in security and development activities, infrastructure projects connected to the Belt and Road Initiative, and peace and security operations in the region.

In Burkina Faso, for example, the popularity of China’s development model has almost doubled, from 20% to 39%, in the five years since the previous survey.

In Guinea, where Chinese companies are mainly involved in mining projects, 80% of citizens perceive China’s economic and political influence as positive – four percentage points up from five years ago. Overall, China’s growing involvement in the Sahel region seems to have had a strong impact on citizens’ views.

Economic fortunes and debt repayment

A majority of African citizens say China’s economic activities have “some” or “a lot” of influence on their countries’ economies. But the perceived influence has declined from 71% in 2014/15 to 56% in 2019/20 across the 16 countries surveyed in both rounds.

And while six in 10 Africans see China’s influence on their country as positive, this perception has declined from 65% to 60% across 16 countries. Instead, regional African powers, regional and United Nations organisations, and Russia scored well in perceived positive influence. Russia was perceived well by 38%.

This could be a reflection of Russia’s growing political, economic, and security engagement with Africa, as well as the role of Russian media such as Russia Today and Sputnik. A recent study on digital media content in francophone West Africa revealed how the digital content these media houses produce quickly seeps into African media spaces.

The Afrobarometer survey revealed that less than half (48%) of African citizens are aware of Chinese loans or financial assistance to their country.

Among those who said they were aware of Chinese assistance, more than 77% were concerned about loan repayment. A majority (58%) thought their governments had borrowed too much money from China.

Figure 4: Views on loans/development assistance from China | 18 countries | 2019/2020. Afrobarometer

In countries which received the most Chinese loans, citizens expressed worry about indebtedness. This included Kenya, Angola and Ethiopia. In those countries, 87%, 75%, and 60% of citizens respectively were concerned about the debt burden.

Lessons learned

The latest Afrobarometer data provides lessons both for analysts of Sino-African relations and African leaders.

First, there is no monopoly or duopoly of influence in Africa. Beyond the United States and China, there is a mosaic of actors, both African and non-African, that citizens consider to have political and economic influence on their countries and their futures. These actors include the United Nations, African regional powers and Russia.

Survey findings show that although Chinese influence remains strong and positive in citizens’ eyes, it is less than it was five years ago. This decline might also be linked to perceptions of loans and financial assistance, framed by the ‘debt-trap’ narrative and allegations of Chinese asset seizures.

Once fieldwork resumes, future Afrobarometer surveys in additional countries may shed light on ways in which the pandemic and China’s ‘corona diplomacy’, and media reports on the mistreatment of African citizens in Guangzhou, have affected the hearts and minds of African populations.The Conversation

 

Folashade Soule, Senior Research Associate, University of Oxford and Edem E. Selormey, Director of Research, Centre for Democratic Development Ghana

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The value of global trade is set to fall by 7% to 9% in 2020 from the previous year, despite signs of a fragile rebound led by China in the third quarter, a United Nations report said on Wednesday.

No region was spared by an estimated 19% year-on-year plunge in world trade in the second quarter, as the COVID-19 pandemic disrupted economies, the U.N. Conference on Trade and Development (UNCTAD) said.

Global trade recovered somewhat in the third quarter, when it was estimated at about 4.5% less than in the same period a year ago, the agency said in its latest update.

"Trade in home office equipment and medical supplies has increased in Q3, while it further weakened in the automotive and energy sectors," UNCTAD said. Growth in the textiles sector was also strong.

Its preliminary forecast put year-on-year growth for Q4 2020 at 3% less, but the report said that uncertainties persisted due to how the pandemic would evolve.

If the pandemic resurges in coming months, that could lead to a deteriorating environment for policy-makers and sudden increase in trade restrictive policies, it said.

China's exports rebounded strongly in the third quarter after falling in the early months of the pandemic, and have posted year-on-year growth rates of nearly 10%, UNCTAD said.

"Overall, the level of Chinese exports for the first nine months of 2020 was comparable to that of 2019 over the same period," it said.

Chinese demand for imported products recovered following a decline in Q2 2020, contrary to other major economies, it said.

Earlier this month the World Trade Organization (WTO) upgraded its forecast for trade in goods due to improvements from June and predicted a drop of 9.2% for 2020.

But it saw a more muted rebound in 2021, with further lockdowns from a second wave of COVID-19 infections posing clear risks.

 

China is preparing to launch an antitrust probe into Google, looking into allegations it has leveraged the dominance of its Android mobile operating system to stifle competition, two people familiar with the matter said.

The case was proposed by telecommunications equipment giant Huawei Technologies Co Ltd last year and has been submitted by the country’s top market regulator to the State Council’s antitrust committee for review, they added.

A decision on whether to proceed with a formal investigation may come as soon as October and could be affected by the state of China’s relationship with the United States, one of the people said.

The potential investigation follows a raft of actions by U.S. President Donald Trump’s administration to hobble Chinese tech companies, citing national security risks.

This has included putting Huawei on its trade blacklist, threatening similar action for Semiconductor Manufacturing International Corp and ordering TikTok owner ByteDance to divest the short-form video app.

It also comes as China embarks on a major revamp of its antitrust laws with proposed amendments including a dramatic increase in maximum fines and expanded criteria for judging a company’s control of a market.

A potential probe would also look at accusations that Google’s market position could cause “extreme damage” to Chinese companies like Huawei, as losing the U.S. tech giant’s support for Android-based operating systems would lead to loss of confidence and revenue, a second person said.

The sources were not authorised to speak publicly on the matter and declined to be identified. Google did not provide immediate comment, while Huawei declined to comment.

China’s top market regulator, the State Administration for Market Regulation, and the State Council did not immediately respond to requests for comment.

EUROPE’S EXAMPLE

The U.S. trade blacklist bars Google from providing technical support to new Huawei phone models and access to Google Mobile Services, the bundle of developer services upon which most Android apps are based.

Google had a temporary licence that exempted it from the ban on Huawei but it expired in August.

It was not immediately clear what Google services the potential probe would focus on. Most Chinese smartphone vendors use an open-source version of the Android platform with alternatives to Google services on their domestic phones. Google’s search, email and other services are blocked in China.

Huawei has said it missed its 2019 revenue target by $12 billion, which company officials have attributed to U.S. actions against it. Seeking to overcome its reliance on Google, the Chinese firm announced plans this month to introduce its proprietary Harmony operating system in smartphones next year.

Chinese regulators will be looking at examples set by their peers in Europe and in India if it proceeds with the antitrust investigation, the first source said.

“China will also look at what other countries have done, including holding inquiries with Google executives,” said the person.

The second source added that one learning point would be how fines are levied based on a firm’s global revenues rather than local revenues.

The European Union fined Google 4.3 billion euros ($5.1 billion) in 2018 over anticompetitive practices, including forcing phone makers to pre-install Google apps on Android devices and blocking them from using rivals to Google’s Android and search engine.

That decision prompted Google to give European users more choice over default search tools and giving handset makers more leeway to use competing systems.

Indian authorities are looking into allegations that Google is abusing its market position to unfairly promote its mobile payments app.

 

- Reuters

Angola's debt to China is estimated at USD 20.1 billion, and is the country's largest creditor, said Finance Minister Vera Daves on Friday.

Of this amount, USD10 billion was used to capitalize the Angolan oil company Sonangol and the remaining USD 10.1 billion to finance various investment projects.

Speaking at a press conference, Vera Daves said that the issue of China's financing to Angola has generated a lot of controversy when analyzing the quality of the works carried out by Chinese contractors.

However, the minister explained that the quality of the works does not depend on the creditor - Chinese banks - but on the Angolan State that must inspect them, and on the contractors.

Vera Daves said that upon payment, the paying bank is based only on the invoices presented on the execution of the works. The bill is paid in China and the money does not circulate in the Angolan economy.

"There is always a very strong debate about deliverables, the quality of the works. This does not depend on the financier but on the relationship between the Angolan State and the contractors", she said, explaining that the financing entity, which is a bank, focuses on the invoices and not on the walls.

As for the debt service with China for 2020, standing at USD 2. 678 million, the minister said that the amortizations represent 78.8%, that is 2,103, while interest represents 21.2% (567 million).

She explained that the debt with that Asian giant is commercial and is paid in deadlines of up to eight years, unlike that with the IMF, which allows negotiation of interest rates and repayment terms.

On the discharge of the public debt, estimated at about 90% of GDP and 60% of the General State Budget 2020 (AKz 13.5 billion), ie, USD 5 billion, according to analysts from the Fitch Rating Agency, the director of Public Debt, Valter Pacheco, Angola needs at least 29 years.

However, the official explained that this is just a hypothetical example should the country no longer incur any debt. But this is not the case because the country needs to finance itself to meet needs.

"We will continue to go into debt, but in a more productive and responsible way. Angola will have to continue to finance itself, but with lower interest rates and longer terms ", said the official.

 

Source: ANGOP

The United States accounts for one of the highest number of billionaires besides hosting the richest person on the planet. The immense fortune by American billionaires can be seen clearly when compared to counterparts from other countries.

Data presented by Buy Shares indicates that the $609.3 billion combined fortune of five richest Americans is more than the cumulative wealth of five richest people from China, Russia, and India at $463.6 billion. The 20 rich people overviewed from four countries now control a combined net worth of $1.72 trillion. The data shows that the top five richest Americans also hold the same position globally.

From the data, Jeff Bezos is the world’s richest person with a staggering net worth of $205 billion as of August 26, 2020. His wealth is almost double the size of the combined fortune of the five richest people from Russia which stands at $112.4 billion. Bezos is also $88.8 billion richer than Microsoft founder and philanthropist Bill Gates who ranks as the second richest person in the world.

World Weathy in US

World Weathy in US2

Billionaires among Covid-19 biggest gainers

Most of the global billionaires are spread across different industries with finance and investment remaining the top niche. Notable finance and investing billionaires are Warren Buffett who emerged as the fifth richest person in the world. The group also has an interest in fashion, retail, real estate, and technology.

It is worth mentioning that the wealth of overviewed individuals is estimated based on their documented assets and accounting for debt and other factors. The billionaires on this ranking excluded individuals whose wealth cannot be fully ascertained.

During the coronavirus pandemic, the global billionaires are among the biggest beneficiaries. For example, Jeff Bezos crossed the $200 billion mark, a record milestone since Amazon was among the biggest beneficiaries of the pandemic. In the course of the health crisis, Amazon largely benefited as consumers turned to online retailers for essential goods. Bezos’ personal wealth is mostly in Amazon stock and it has been skyrocketing in recent years along with the company’s share price.

Notably, Bezos’s wealth could have been much more were not for his expensive divorce. Last year, Bezos parted ways with ex-wife, MacKenzie Scott, and agreed to give her 25% of his Amazon stake. Based on the current market, the stake is worth $63 billion.

However, Bezos alongside other billionaires in the technology industry is expected to be among the biggest gainers this year. In the wake of the coronavirus pandemic, the technology sector has shown positive recovery signs with stocks surging. The surge in tech stocks has seen Facebook founder Mark Zuckerberg’s wealth also grow to new heights.  Unlike some wealthy people like Facebook’s founder, it took a lot of time for most people to make their first billion.

Are billionaires benefitting from weak tax laws?

On the flip side, the rise of global billionaires has also been marred with some controversy, especially on tax-related matters. In the US, taxing the wealthy has been a major debate that has gone into political circles. There is a general feeling that some of the wealthy gate away with fewer taxes. In the wake of the coronavirus pandemic, millionaires and billionaires were set to reap more than 80% of the benefits from a change to the tax law as part of the coronavirus economic relief package.

Most billionaires usually combine their huge investing and purchasing power alongside government resources in addition to their own resources to profit from during economic crises. In addition to wealth-friendly tax laws and loopholes, some of the richest individuals are able to stay on top.

However, there have been concerns about how some billionaires keep getting rich. Some suspect that billionaires are engaging in unethical practices to attain much wealth. There have been calls for top billionaires to redistribute their wealth. At the same time, there is a school of thought that supports the close scrutinization of billionaires. For example in the United States, Congress has been urged to set up a “Pandemic Profiteering Oversight Committee” whose sole purpose will be to probe corruption and profiteering by a few individuals.

In the past few days, the public space has been awash with comments and outrage on the hearings at the Federal House of Representatives concerning the Chinese loan agreements Nigeria entered into to the tune of $500 million for the part-financing of its rail projects said to be valued at about $849 million.

This is borne out of the fact that the House of Representatives Committee raised the alarm over the alleged waiver of Nigeria’s sovereignty. These hearings in which the Minister of Transportation, Chibuike Amaechi was invited, laid bare some perceived inconsistencies in public debt procurement process in Nigeria with noticeable gaps. For the rail project loan in question, issues have arisen concerning the drafting of the agreement, the processing of the documents as well as the involvement of the Minister of Finance and the Attorney-General of the Federation respectively.

These gaping questions become very disturbing when the lender in question here is China, which has been associated with opaqueness in granting loans to countries in global context.
 
In investigating the processing of the $500 million Chinese loan from the Export-Import Bank of China, the Federal House of Representatives, as part of its oversight function, discovered that the loan agreement contained a clause in which Nigeria’s sovereignty was supposedly traded off. According to reports, this discovery was made because the agreement entered into, was written in Mandarin, the official form of the Chinese language with the Nigerian officials signing without understanding the full content of the loan document. If that is the case, it strengthens the narrative of the reported opaqueness of typical Chinese loan agreements.

The controversial clause in this loan case, states that, “the borrower hereby irrevocably waives any immunity on the grounds of sovereign or otherwise for itself or its property in connection with any arbitration proceeding pursuant to Article 8(5), thereof with the enforcement of any arbitral award pursuant thereto, except for the military assets and diplomatic assets.” The question that arises here is whether there is no law that requires that the terms and conditions of loan agreements be submitted to the National Assembly for approval. In response to this raging controversies, the Chinese Foreign Ministry denied that China had any clause in the contract ceding Nigeria’s sovereignty and that it followed its “five-no” approach in loan agreements one of which is “no imposition of our will on African countries” and that it gives full consideration to debt sustainability.  

The response of China on this issue notwithstanding, the history of China’s relations with different countries on loan agreements largely leaves a sour taste in the mouth. China has been severally accused of undertaking a global colonisation policy with its debt-trap diplomacy. For most of the countries that China has extended loan facilities to, there has been tales of woe and lamentations. Chinese loans to Sri Lanka, Papua New Guinea, Maldives, Pakistan, Malaysia, Mongolia and Republic of Kazakhstan, among others have been followed with cases of default and takeover of these countries’ assets by China.

These loans are usually given out with very attractive conditions and without thorough due diligence for which these countries find it difficult to resist. What follows is a loan default and then the taking over of major assets in the borrowing countries with these takeovers not limited to the projects for which the loan is procured. By its “Belt and Road” Initiative, China targets countries that have some form of natural resources or something to offer which may not necessarily be cash. One commonality in these assets is that all the infrastructure of roads, ports, highways and airports, among others, financed with these loans all connect to China in what has been aptly described as the “new silk road.” Opaqueness has been one clear characteristic of Chinese loans across many jurisdictions globally. In Africa, the story is not different.

China appears to have taken a strategic position on the continent by willingly donating a mighty Secretariat to the African Union Commission in Addis Ababa, Ethiopia, probably as a good launching pad to gain easy access to virtually all African countries in pursuit of its global expansionist policy. China has extended irresistible loans to many African countries with Angola, an oil rich nation, having the largest Chinese loan exposure on the continent with a portfolio of about $25 billion. This is followed in that order by Ethiopia, Kenya, Republic of Congo, Sudan, Zambia, Cameroun, Nigeria, Ghana and the Democratic Republic of Congo, (DRC).

Most of these loan transactions have run into some trouble with Zambia representing the worst case in Africa where China has taken over their National Power Corporation and the Broadcasting Corporation due to loan default. It is little wonder why these countries wouldn’t default given that the loans are largely concessionary with lots of suspected undercover dealings and perks in favour of African government officials in form of huge kickbacks, which largely do not go through the banking system. Many have dubbed this as China’s new colonial strategy, which it executes by first encouraging indebtedness on very concessionary terms; taking over strategic assets or the commanding heights of the economy on default. The focus is largely on very corrupt countries with very weak governance structures. Given these antecedents, there is a great need for these issues to be addressed in the Forum on China-Africa Cooperation (FOCAC) meetings. 

The Debt Management Office (DMO)’s response on this raging issue has also left much to be desired. It addressed the pedestrian issue of how little China’s $3.121 billion loan exposure to Nigeria is, that it represents only 11.28% of the total external debt stock of $27.67 billion or 3.94% of overall total public debt burden of $79.303 billion. By this submission, the DMO stated that China is not a major source of funding for the Nigerian government. The DMO highlighted the fact that the loan is a concession of 20-year tenor with a seven-year moratorium. The DMO prided itself that its law, the Debt Management Office Establishment (ETC) Act 2003 as well as Section 41 (1a) of the Fiscal Responsibility Act 2007 were duly followed in the loan agreements in question.

However, the issue is really not in the quantum of these Chinese loans but on the commitments made by our government officials. The DMO response did not guarantee whether transparency was followed in the negotiating process –particularly with reported incidences of corruption in other jurisdictions. It also did not clearly state whether the unpalatable experiences of other countries in dealing with China on borrowing were factored in nor did it address the issue of sovereignty or whether the agreement was written in Mandarin or not nor how the repayment will be made from proceeds from the projects over the 20-year loan period. How come the National Assembly, which should have approved the loan in the first place is just getting to know about this sovereignty clause after the fact? The DMO needs to provide further explanations on these issues.
 
On the sovereignty issue, it needs to be noted that, the controversial clause would only come into effect when there is a case of default. It needs to be put in proper perspective that for an economic or commercial transaction, Nigeria would find it difficult to plead its sovereignty in the event of default and would thus need to go for arbitration. Hence the hue and cry on loss of sovereignty for a purely commercial transaction may have been misplaced. This, however, differs in the case of political relations where the ceding of sovereignty is not tolerable. It is proper to understand that for an economic or commercial transaction such as this, the key issue is to avoid a loan default else the case of arbitration cannot be avoided.

The critical point to make is whether Nigeria is safe with this preponderance of loans, particularly from China, given our track record in public debt management since independence.
 
It can be recalled that Nigeria had to exit the Paris Club debt during the Obasanjo administration by paying off $12 billion at a go and getting a relief of $18 billion totalling a reduction of our public debt by $30 billion. Are we sure there would not be a default again given our unenviable track record in loan repayment, particularly with the global oil market highly volatile and foreign exchange earnings dwindling. Corruption or kickbacks by government officials across the continent indicate that the actual investments in projects actually fall far short of negotiated loan amounts. This is a cause of worry concerning future default on these Chinese loans. This is where the sovereignty issue becomes obviously threatened.
 
Finally, does Nigeria actually need these many loans it has been taking particularly in the past five years since the inception of the Buhari administration in May 2015?
 
This government is known to have more than doubled the size of the public debt from about N12.118 trillion in May 2015 to N27.401 trillion in 2019 and in excess of N30 trillion at the moment. With the new borrowings of $3.4 billion from the IMF, $750 million from the World Bank, N162.5 billion Sukuk bond and another $1.5 billion from the World Bank, the Buhari administration is setting an inglorious record of ensuring that the future of the present and future generations is thoroughly mortgaged with dire consequences for the ordinary man. Currently, the cost of governance hasn’t been reduced and many stakeholders such as the Nigerian Labour Congress (NLC), the Trade Union Congress and many other stakeholders have called on the Buhari administration to make full disclosure of all the loans it had obtained. A stitch in time saves nine. The House of Representatives as well as the Senate should dig deep into these vexatious issues concerning Nigeria’s loans so that the current race on the road to economic and political perdition can be reversed.
 
1 USD = 386.594 NGN
 
The Chinese government says there’s no clause in the $500 million loan it gave to Nigeria that include taking over its sovereignty.
 
The House of Representatives had in the probe of Chinese loans to Nigeria alleged that the agreements ceded Nigeria’s sovereign right on the assets financed by the loans to China if there was payment default.
 
However, the Chinese foreign ministry in a statement debunked the claim saying the country had no such plan.
 
“We follow a “five-no” approach in our relations with Africa: no interference in African countries’ pursuit of development paths that fit their national conditions; no interference in African countries’ internal affairs; no imposition of our will on African countries; no attachment of political strings to assistance to Africa; and no seeking of selfish political gains in investment and financing cooperation with Africa,” the ministry quoted President Xi Jinping, as saying at the FOCAC Beijing Summit in 2018.
 
The ministry added that “China is committed to enhancing investment and financial cooperation with African countries based on their needs to help them improve infrastructure and extradite socioeconomic development.
 
By funding infrastructure and other areas that lag behind for short of money, we have helped the relevant countries break bottlenecks, enhance their capacity for independent development, realize social and economic sustainable development, and improve people’s livelihood.
 
Such cooperation has delivered tangible benefits to African countries and peoples.
 
“In the process, China always gives full consideration to debt sustainability and seeks mutually-acceptable proposals through equal and friendly consultations.
 
That is the fundamental reason behind the enormous popularity of China-Africa cooperation in Africa.”
 
 

source: dailytrust.com.ng

Huawei became the biggest smartphone player in the world in the second quarter for the first time, a new report by Canalys shows.

The majority of sales came from China as its international business suffers due to U.S. sanctions.

The Chinese vendor shipped 55.8 million devices, down 5% year on year, according to the research firm. Meanwhile, second place Samsung shipped 53.7 million smartphones, a 30% plunge versus the same period last year.

It is the first time that Huawei has snagged the top spot for a single quarter, an ambition it has had for several years.

But analysts cast doubt over whether this was sustainable given the fact Huawei’s overseas markets outside of China took a hit as a result of U.S. sanctions against the company.

Huawei sold over 70% of its smartphones in mainland China in the second quarter. Meanwhile, smartphone shipments in international markets plunged 27% year-on-year in the April to June quarter.

In Europe, a key region for Huawei, the company’s smartphone market share fell sharply to 16% in the second quarter versus 22% in the same period in 2019, according to Counterpoint Research. It is the third-largest smartphone maker in Europe behind Samsung and Apple, showing how Huawei’s global position in the second quarter was built on efforts to expand its share in China, the world’s second-largest economy.

Given the massive population of China, success there often propels companies to a large “global” market share.

“It will be hard for Huawei to maintain its lead in the long term,” Mo Jia, analyst at Canalys, said in a press release. “Its major channel partners in key regions, such as Europe, are increasingly wary of ranging Huawei devices, taking on fewer models, and bringing in new brands to reduce risk.”

“Strength in China alone will not be enough to sustain Huawei at the top once the global economy starts to recover,” he said.

Last year, Huawei was placed on the U.S. Entity List, a blacklist which restricted its access to American technology. That meant Huawei could not use licensed Google Android on its latest flagship devices.

In China, where Google services such as Gmail or its search engine are effectively blocked, it’s not a big deal as Chinese consumers are not used to using those products. However, in international markets, not having Google is a big blow.

That is one reason why Huawei’s rivals, which are still able to use Android on their devices, have grown in market share. For example, in Europe, Chinese firm Xiaomi saw its market share increase from 6% in the second quarter of 2019 to 13% in the same period this year, according to Counterpoint Research.

Huawei was forced to release its own operating system called HarmonyOS last year. But analysts have previously cast doubt over its success in international markets given the fact that it is missing key apps from the App Store.

The Chinese telecommunications giant faced further pressure this year from Washington. A new rule introduced in May requires foreign manufacturers using U.S. chipmaking equipment to get a license before being able to sell semiconductors to Huawei.

This could affect Huawei’s ability to procure chips for its smartphones. While Huawei designs its own processors, they are manufactured by Taiwans’ TSMC which could be affected by this rule.

China is considering retaliating against telecom gear makers Nokia and Ericsson if the European Union follows the United States and Britain in banning Huawei Technologies from 5G networks, the Wall Street Journal reported, citing people familiar with the matter.

Britain last week ordered telecom operators not to purchase 5G components from Huawei from the end of this year and remove all existing gear made by the Chinese telecoms behemoth from the 5G network by 2027.

Sweden’s Ericsson and Finland’s Nokia are among the most immediate beneficiaries of the U.S-led campaign against Huawei.

China's Ministry of Commerce is looking into export controls that would prevent Nokia and Ericsson from sending products it makes in China to other countries, the Journal reported here.

The retaliation would be a worst-case scenario that Beijing would use only if European countries came down hard on Chinese suppliers and banned them from their 5G networks, one person told the Journal.

The EU has so far not recommended a ban on Huawei but has issued a so-called “toolbox” of security standards that member states should apply while using suppliers considered to be high risk to build 5G networks.

Nokia and Ericsson did not immediately respond to requests for comment.

 

Reuters

This is a flashback. Just about a year ago, the tough speaking Ugandan President, Yuweri Museveni blamed the World Bank and the West as a whole for driving Africa into Chinese arms by their refusal to fund railways projects across Africa.

Hosting some Chinese officials then, President Museveni lashed at the World Bank for refusing to lend Uganda money to build a railway network,noting that the World Bank told off Uganda when it sought for funds, that countries that “build railways use own money.”

He said that such a statement from an economist purports to support Africa’s transformation through private-sector led growth shows that some actors are not serious. Museveni, who was in China for a four-day visit, told a meeting in Beijing that Uganda Railways tried to get money to fund railway construction from the World Bank but in vain.

“One of our engineers recently told me that the Uganda Railways tried in vain to get support from the World Bank until one official told them that countries that build railways do so with “their own money,” Museveni said. 

“How will the private-sector grow if it is bedevilled with expensive transport costs, expensive electricity costs or no electricity at all, expensive cost of money, etc.? It is against that negativity, that China’s solidarity should be measured.”

“As we gather here, therefore, we cannot forget to salute the Communist parties of China, the USSR, Cuba and the other socialist countries that constituted the third factor in our emancipation,” he said. 

Reality a Year After

A year after , Uganda appears to have fallen out with Beijing on railway financing. China was unwilling to commit such fund after the faltering experience of Kenya.

Kampala has eventually resorted to a mixture of private public sector funding of her railway revival. It has slowed down the SGR agenda and in turn opted for rehabilitation of the old guage lines.

Interestingly, the Ugandan government has engaged a western led consortium in the rehabilitation efforts. Just two or so weeks ago, the national government of the Republic of Uganda approved US$ 376M for the 215km Malaba – Kampala meter-gauge railway refurbishment project.

An additional investment of over US$ 12M has also been approved to purchase eight locomotives for the line and more than US$ 2.5M for routine repairs across the network.

This was revealed by Charles Kateeba, the managing director of Uganda Railways Corporation (URC) in a letter addressed to the parliamentary committee on matters of national economy.

According to Mr. Kateeba, the Malaba – Kampala meter-gauge railway refurbishment would not only bring to life cheaper means of transport but also help reduce the number of trucks on the roads which would consequently lead to the reduction of wear and tear effect on the East African country highway roads.

Furthermore, the government hopes that the Malaba – Kampala meter-gauge railway refurbishment will reduce cross-border road traffic and help to limit the transmission of any future pandemics such as COVID-19.

The ambitious Uganda Standard Gauge Railway (SGR) project

The above-mentioned investment is part of the ambitious Uganda Standard Gauge Railway (SGR) project which aims to improve freight connections particularly between the capital city of Uganda and the country’s eastern border with Kenya.

The project includes the redevelopment and reconstruction of the East African country’s dilapidated 1,266km, 1000mm-gauge network to standard gauge and extension of the network to approximately 1,724km.

All this will be done in four sections: Malaba – Kampala, Kampala – Mpondwe, Tororo – Gulu, and Bihanga – Mirama Hills.

The construction of the Tororo – Gulu section has already been contracted to Vinci Group subsidiaries namely Sogea Satom and the ETF.

The two companies will replace the entire section 375km meter-gauge railway with a standard gauge railway.

They will also be responsible for the production and installation of 200,000m3 of ballast and the replacement and repair of sleepers, rails, and fastenings.

 

Credit: Rail-Bus

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