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China in Africa: The Real Story

China and the African "land grab": The DRC Oil Palm Deal

Deborah Brautigam

China often figures as exhibit Number One in articles about the "great African land grab." The other day I stumbled across a report on the website of 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.