China–Democratic Republic of the Congo relations

China-Democratic Republic of the Congo relations

China	Democratic Republic of the Congo

The People's Republic of China (PRC) and the Democratic Republic of the Congo (DRC) have had peaceful diplomatic relations, and growing economic relations, since 1971. Relations between the two countries go back to 1887, when representatives of the Congo Free State established contacts with the court of the Qing dynasty then ruling China. The first treaty between the two powers was signed in 1898. The Free State became a Belgian colony in 1908, but when it gained its independence in 1960 it established formal relations with the Republic of China (ROC), which had replaced the Qing in 1912 but was relegated to the island of Taiwan after 1949. Over the next decade, Congolese recognition was switched several times between the ROC and the PRC before it settled finally on the latter in 1971. At the time, the Congo was known as Zaire. In the 21st century, Chinese investment in the DRC and Congolese exports to China have grown rapidly.

Qing relations with the Congo Free State

In 1887, King Leopold II of Belgium sent emissaries to the Qing court in China to request the right to recruit labourers for the Congo Free State. Since the Qing had already signed a treaty with Belgium, the Belgians were permitted to recruit labour on behalf of their own colonies, but not for the Congo Free State, which was not a Belgian colony. In 1892, the agents of the Congo Free State contracted out their recruiting in China to Macau-based Portuguese firms. A total of 536 men and six boys were recruited in Guangzhou under three-year contracts. The Congo paid their round-trip fares, provided room and board and paid wages of 45 francs a month. Workers wishing to remain in the Congo after three years would then receive a 400-franc cash allowance. These men left for the Congo on 18 September 1892 aboard the German steamer Walstein from Macau. Both the China Custom Annual Trading and Commerce Records and the Business Report of the British Consulate in China reported more workers recruited by Macanese and Hong Kong agents in Qiongzhou and Shantou for work in the Congo in 1892. In the Congo these recruits were put to work on the Congo railway, logging trees and hauling rocks. Most of these recruits died in the harsh conditions of the Congo. Contemporary newspapers in Hong Kong published information about the bad conditions and mistreatment suffered by the Chinese in the Congo. During this first period of recruitment around 1,000 Chinese went to the Congo.

On 10 July 1898, China and the Congo Free State signed a "special chapter" in Peking that stated, in part: "It was agreed upon that Chinese citizens can at will move to and live in the Congo Free State. All properties, movable or unmovable, can be purchased or traded. Whether for shipping, business, crafts or arts, Chinese citizens will receive the same treatment as citizens of the most favorable countries." This agreement granted China "most favoured nation" status in the Congo. It also had the effect of legalising the recruitment of Chinese for work in the Congo. Although Congolese authorities found the performance of the workers of 1892 unsatisfactory, recruitment drives were undertaken in China in 1901, 1902, 1904 and 1906. During this second period of recruitment, about 2,000 Chinese went to the Congo. In 1906, Hong Kong alone produced 500 recruits.

Establishing relations with the ROC and PRC

In October 1960 the newly independent DRC, then called the Republic of the Congo (Léopoldville), established diplomatic relations with the Republic of China (ROC). The DRC changed recognition in February 1961 to the People's Republic of China (PRC), changing back again to recognise the ROC later the same year in September. Relations were again established between the DRC, then known as the Republic of Zaire, and the People's Republic of China in November 1972 and have remained intact since.

During the time that the DRC/Zaire recognised Taiwan, between 1961 and 1971, the PRC supported and provided material support to anti-Zairian rebels. After Zaire's president, Joseph-Désiré Mobutu, reverted recognition back to the PRC eight Chinese leaders visited Zaire between 1978 and 1995. Mobutu himself visited the PRC five times despite the fact that their relationship was not very close at the time.

Present economic relations

Information on Chinese commercial activities is mysterious and inaccessible in both DRC and their home country. This can only intensify the doubts as to their transparency and the manner in which they meet their legal obligations.

In June 2000 a Sino-Congolese telecommunications company (China-Congo Telecom) was set up between ZTE and the Congolese government in a deal worth RMB80 million in concessional finance from China EXIM Bank. In April 2009 South African telecommunications group MTN Group offered to buy ZTE's 51 percent stake in the company for US$200 million. As of January 2010 the DRC has not yet been given Approved Destination Status (ADS) by China due to ongoing civil conflict in the country.

Trade between China and the DRC greatly increased between 2002 and 2008. This is largely due to massive growth in the DRC's exports of raw materials to China. In 2007 the DRC exported US$304.8 million worth of cobalt. In 2008 the DRC exported US$1.13 billion of cobalt to China. Exports of copper ore and hard woods to China also increased greatly.

Sicomines

A deal was struck between Sicomines, a consortium of Chinese companies (Sinohydro and China Railway Engineering Corporation), and the Congolese government in April 2008 to grant mineral concessions in Katanga province in exchange for infrastructure investments. In a deal originally worth US$9 billion and funded by China EXIM Bank, US$6 billion would go to infrastructure development and US$3 billion being invested in mining operations in Katanga. 68% of the project would be owned by Sicomines and the remaining 32% would be owned by Congo’s mining parastatal Gécamines.

The US$6 billion was originally to have been invested in a total of 6,600 km of road would be either built or rehabilitated, two hospitals and two universities being built. The mining concessions in Dima (Dikuluwe) and Mashamba West would have given Sicomines access to 10.6 million tons of copper and over 600,000 tons of cobalt, with 6.8 million tons of copper and 427,000 tons of cobalt being confirmed deposits. The mine will come online at the earliest in 2013.

The Congolese and Chinese side have argued that the financing provided to Sicomines by China EXIM Bank is not to be seen as regular government debt since, as stated in article 10.1 of the contract, it is taken on by the joint venture and is backed by the mineral concessions. The articles 10.3, 13.2 and 13.3.3 of the contract are however the stumbling blocks in the context, stating that the Congolese state guarantees the repayment of the loan.

Critics of the project have alleged that the deal undervalues the mineral deposits in Katanga. The International Monetary Fund (IMF) has raised concerns about this deal negatively affecting the DRC's ability to sustain its debt. This is because the deal would disqualify the country from the IMF's foreign debt relief program run under the auspices of the World Bank Group’s Highly Indebted Poor Country (HIPC) program, as the DRC would be getting its debt canceled only to be taking on even more new debts. The IMF has argued that in order for the DRC to remain eligible and the deal to go through the value of the Sicomines deal would have to be greatly reduced. In May 2009 the Congolese government agreed to put on hold US$3 billion of the deal while a feasibility study for the mineral concessions is finalized.

Benefaction

The governor of Katanga province Moise Katumbi, province estimates that over 60 of the province’s 75 processing plants, around 90%, are owned by Chinese nationals. Most of these operations are privately owned limited liability companies owned by Chinese nationals. They are known to have poor environmental and labour relations records and have been accused, directly or indirectly, of using child labour. In 2007 about 600 Chinese nationals were expelled from Katanga for violating labour and environmental laws.

Building projects in the DRC

Since 1972 the PRC has given a number of donations to the DRC. Including a farm on the outskirts of Kinshasa, a sugar refinery in Kisangani, and the National Assembly building (at the time costing US$42 million or US$186 million in 2011 dollars) were all built and given to the DRC in the 1970s. The Chinese government also built an 80,000 seat stadium in 1994. In 2004 the PRC built and donated the N'Djili Sino-Congolese Friendship Hospital, handing it over to the DRC government in 2006. According to AidData, from 2000 to 2011, there are approximately 21 Chinese official development finance projects identified in DRC through various media reports.