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TheStreet Open House

China Is Reaping Africa's Riches

TAIPEI, Taiwan ( TheStreet) -- Face it, Western countries, China is leading -- in Africa.

Beijing's foray into the resource-rich continent has met with write-ups of neo-colonial ambitions as the stronger country uses aid to form alliances with weaker ones. China's efforts over the past decade, such as dam in Ghana and peacekeeping vessels in the pirate-ridden waters off Somalia, have been rewarded with oil, ores and even cocoa.

Does the U.S. wish it had thought of the Africa strategy first? It should, because Chinese companies from here onward will just dig deeper into the continent's natural resources, outstripping American competitors.

Under China's new President Xi Jinping, Sino-African relations are expected to get only stronger, and it's not because the peoples love each other so much. News reports say the president will visit Africa early in his term, signaling high priority, following Foreign Minister Yang Jiechi's visit in February amid pledges to keep friendships cemented.

Some 2,000 Chinese enterprises are invested in projects to develop African telecommunications, energy, farming and manufacturing, China's official Xinhua News Agency reported in December, noting 38.2 billion in contracts in the first 10 months of 2012.

Chinese foreign direct investment, or FDI, in Africa reached $1.5 billion in the same period, up 17% year on year.

Trade between Africa and China was worth $91.3 billion in the first half of 2012, compared to about $50 billion in U.S.-Africa trade over the same period.

In the latest example, Italian energy firm Eni (E) said on March 14 it had reached a deal with the China National Petroleum (CNPZ) to sell a 20% stake of a natural gas field off the coast of Mozambique.

Gas and oil tell a big piece of the China-Africa resources story. China gets about one-third of its oil imports from Africa, which has 9%-10% of the world's oil reserves, the U.S. think-tank Council on Foreign Relations said in a report last year. China's top African oil suppliers include Angola, Sudan and Nigeria, the report says.

China also surpassed the United States in 2009 as Africa's biggest oil trading partner.

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