A setback for China in Africa

Chinese ambitions in Africa have been no secret to Western policymakers. In the past 7 years, Beijing has devoted over $14 billion dollars to Africa, through a mixture of aid for resources packages and direct investment. However, the outcome of this weekend's Zambian presidential election could be an indication that the policy is beginning to backfire. Four-time candidate, and former train station sweeper Michael "King Cobra" Sata, was confirmed as the winner last Friday.

The Global Post reports:

Sata referred to Chinese investors as "infesters." He called for Chinese migrant workers to be expelled from Zambia. And he described Taiwan as a country, breaching Beijing's obsessive "one China" policy, which considers Taiwan a rogue province rather than an independent nation. China threatened to cut ties with Zambia if Sata won.

China responded to Banda's defeat with the same pragmatism as it had toward the loss of friendly regimes in South Sudan and Libya: It tried to befriend the new boss.

"As a friendly country of Zambia, China respects the Zambian people's choice and would like to work with Zambia to promote friendship and expand mutually beneficial cooperation across the board," Chinese foreign ministry spokesman Hong Lei said in Beijing.

But privately, the Chinese government must be worried. Sata has said he may implement capital controls aimed at keeping foreign-exchange earnings in Zambia, Africa's biggest copper producer and a country that has seen strong economic growth averaging 6 percent over the last three years. Foreign-exchange controls would prevent Chinese companies from sending their profits home to China.

China relies extensively on its investment and foreign aid apparatus to bolster its soft power on the continent. A white paper released this past April by the Chinese government went into more detail about the different components and extent of their operations. A significant portion of the monies are channeled through various Chinese state owned corporations and banks to the countries that they have ties with, including resources hubs Angola, D.R Congo, Sudan, and Zambia.

It will also trouble China Inc., as the election served as a vote of no confidence against their existing projects within the country. As the Economist covered in April, the reputation of Chinese companies has been slowly crumbling with the regular reports of poor working conditions, routine bribery and environmental damage. In Zambia, a Chinese built road was washed away by rainfall.

While Sata's election will not deter  the Chinese from further investing in Zambia, it could signal the beginning of a trend in African politics for candidates to run on anti-Chinese platforms.  Much in the way that prominent Latin American leaders such as Hugo Chavez ran on U.S-bashing platforms, African countries could see the beginnings of a similar type of movement to protest the wider abuses stemming from Chinese involvement. How it affects further economic relations will be seen in the coming months.



Decline Watch: New York's cocaine comedown

Thanks to a sluggish economy and slightly less astronomical Wall Street bonuses, New Yorkers apparently no longer move snowflakes by the OZ. The New York Post reports:

Cocaine-related emergency-room admissions, overdoses and requests for rehab have declined since the economy started its 2008 decline, according to data obtained by The Post.

“It is sort of on a slight but steady downward trend,” said Dr. Stephen Ross, director of NYU’s Langone Center of Excellence on Addiction. “I treat patients in private practice. Many cocaine addicts tell me stories they don’t have enough money to buy it anymore.”

There were 478 “accidental” deaths in which cocaine was a factor, typically overdoses, in New York City in 2006, according to the Office of the Chief Medical Examiner.

That number plunged to just 274 in 2010.

Powder-cocaine addicts typically shell out $60 to $80 a gram, so perhaps the high cost of blow is why also a smaller number of people -- 7,693 -- sought treatment for cocaine addiction in New York City last year, according to the New York State Office of Alcoholism and Substance Abuse Services. That number is a drop from 9,654 in 2008.

Decline-o-meter score: 3

This might be an indicator of a slower economy, but it also might not be the worst thing -- for their own health and the global economy -- for aspiring masters-of-the-universe to lay off the nose candy. 

Mexican President Felipe Calderón said at the U.N. last week that the United States and other consumer countries are "morally obliged" to reduce the demand for narcotics. Perhaps the recession may help accomplish that. On the other hand, as White House drug czar Gil Kerlikowske told FP in an interview this year, "We've become much better at producing drugs in the United States." American jobs!

Hat tip: Mike Nizza

Flickr user stopherjones