Why offer so much to CVI rather than the chinese with limitless capital?
A minnow of a private compny 'V' a government colossus,,,, why would the Angolans bother with CVI?
This commentry (2005) sheds some light and is relevant to all africa-Chinese relations:
" Moeletsi Mbeki, deputy chairman of the South African Institute of International Affairs, wrote recently in AllAfrica.com that China "is both a tantalizing opportunity and a terrifying threat to South Africa." On the one hand, he said that China was "just the tonic" that mineral-rich but economically-ailing South Africa needs. But he added that exports from China and Hong Kong to his country are double those from Africa and almost double what South Africa exports to China. He called the trade relations between South Africa and China "a replay of the old story of South Africa's trade with Europe."
Said Mbeki: "We sell them raw materials and they sell us manufactured goods with a predictable result - an unfavorable trade balance against South Africa."
He went on to say that most of what Europe and America sells to South Africa are high tech goods that the latter does not produce itself, while imports from emerging Asian countries like China are goods his country is able to produce itself. In September, one of South Africa's largest trade unions threatened to boycott retailers it said were importing cheap Chinese products, which it said had lead to worsening unemployment at home.
If you look at the Angolan strategy through the prism of parochialism, nationalism and good ol' power plays and vested self interest, then cutting a deal with CVI makes perfect sense.
Dealing with a super power runs the risk of conceding too many concessions in other areas (eg imports of chinese goods) and being at the mercy of a stake holder with the leverage to lock in long term undervalued contracts to itself. Other countries in africa have conceded monopoly powers to chinese in various sectors eg agriculture, construction etc,,
Possibly, the Angolans know that CVI, could be its white knight in any future power plays on its commodities (oil/gas, copper, diamonds,,).
" Chinese firms are not hindered at home by legal challenges from non-governmental organizations or concerned about corporate-image liabilities when investing in high-risk markets with unsavory regimes or where severe human rights abuses take place. In fact, Chinese companies are attracted to the potential for large profits in markets with less competition from multinational firms." http://chinainafrica.blogspot.com/
The Angolan gov't would find it easier I imagine to deal with CVI (and co) initially, who then each concede a % to a multinational by way of a farmin (Esso, Agip,,,) rather than dealing from the outset with the power of multinationals or worse, the Chinese who would be able to extract numerous concessions on national trade and long term contracts on the oil,copper,,etc..
Involving the chinese from the outset would be akin to a farmer selling half his farm to Woolworths and letting them determine the supply contract... ultimately, the farmer loses all control of what he produces and what price he gets for it .
From the Angolans perspective, involving CVI from the outset is about avoiding the inequitable negotiations they would face with a multinational or Chinese entity, imo.
- Forums
- ASX - By Stock
- CVI
- more assumptions
more assumptions
-
- There are more pages in this discussion • 4 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Add CVI (ASX) to my watchlist
Currently unlisted public company.
The Watchlist
SER
STRATEGIC ENERGY RESOURCES LIMITED
David DeTata, Managing Director
David DeTata
Managing Director
SPONSORED BY The Market Online