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Gabon - China Relations

The Chinese have a significant presence in Gabon, primarily of an economic nature. The Chinese are interested in Gabons natural reserves of oil, manganese, and timber, and they have recently increased their involvement and investment in Gabon. While the government views this positively, average Gabonese citizens resent it because the Chinese frequently import their own workforces rather than create jobs for the Gabonese.

After a nearly six-month battle over the rights to one of the largest untapped iron deposits in the world between Brazilian mining company CVRD and the Chinese engineering company CMEC, in June 2006 the GoG awarded the project to the Chinese. Bongo initially crafted a compromise that allocated construction of transportation and other infrastructure for Belinga to the Chinese, and the mine itself to the Brazilians. Selection of CVRD would have served Gabon's interests, since the Brazilians would employ local labor (CRVD estimated 7,000 direct and 15,000 indirect jobs for the mining alone) and sub-contract services locally (including to French companies).

Although most observers believed investment by CVRD would provide more benefits for Gabonese development, the Chinese victory was widely anticipated because Gabon found it strangely difficult to say no to China. This case provides additional evidence of a deteriorating investment climate in Gabon, at a time when the country should be preparing for a post-oil economy.

It was not readily apparent why Gabon granted China so much power. Bongo, who had survived almost 40 years in power by building coalitions and avoiding confrontation, undoubtedly urged the Chinese to share the project with CVRD. That CMEC insisted on an all-or-nothing decision suggests the Chinese were supremely confident they would win. China offered Gabon the symbols of respect with high level visits and provides the GoG cheap financial credit for public works projects constructed by Chinese companies. This hardly seemed enough to convince the GoG to entrust a critically important project for Gabon's future development to a company with no apparent mining experience.

The president met with Chinese officials in Hong Kong after the Beijing Olympics in mid-2008 and was promised that work on the ambitious 25-year, $3.6 billion project would begin in earnest by early 2009. Despite this pledge, by 2009 there had been no resumption of the preliminary infrastructure development that had stalled by August 2008 in the face of local and international objections to the project. International concern focused on the project's environmental impact, including the potential flooding of Central Africa's largest waterfalls. Local critics also expressed concern over the terms of the deal, including financial incentives for Chinese investors and what some claimed were inadequate labor guarantees.

The Chinese decided to wait out the world financial crisis before making further investments in the project. This reluctance on the part of the Chinese was confirmed by a press report on January 17, 2009 in which Yin Zhixin, head of the joint Chinese-Gabonese company managing the Belinga project (Comibel), expressed serious concerns about the Gabonese legal and investment climate. Yin reportedly went on to say that the Chinese's confidence had been undermined by an unfavorable modification of the company's mining permit.

Gabon's logging sector was rocked by the steep fall in worldwide demand for raw lumber and finished wood products due to the subprime mortgage crisis and slowdown in the U.S. and European housing markets. China is the primary importer of Gabon's raw lumber, destined to be transformed into plywood; China saw its sales of plywood to the U.S. drop by fifty percent during the third quarter of 2008.

The friendly and cooperative relations between the People's Republic of China and the Gabonese Republic developed steadily in 2013. Political exchanges maintained good momentum. In March 2013, President of Gabon Ali Bongo Ondimba and President of the Gabonese National Assembly Guy Nzouba Ndama sent congratulatory messages to President Xi Jinping and NPC Chairman Zhang Dejiang respectively on their elections. The CPC Central Committee sent congratulatory messages to the Gabonese Democratic Party on the 45th anniversary of its establishment in March and on its 10th Ordinary Congress in April. Also in April 2013, President Fri Bongo Indiana and Minister of Foreign Affairs, International Cooperation, Francophony, NEPAD, and Regional Integration Emmanuel Issoze Ngondet sent letters of condolences to President Xi Jinping and Foreign Minister Wang Yi respectively after an earthquake hit Lushan, Sichuan Province on 20 April.

Progress was made in business exchanges and cooperation. In May 2013, Gabonese Minister of Digital Economy, Communications and Post Blaise Louembe attended the Second Session of Beijing International Fair for Trade in Services and Global Services Forum-Beijing Summit in China. Within the year, the construction of the Port Gentil-Omboue coastal road and the Boou Bridge over the Ogoou River was launched; the first stage of the safety upgrading and renovation of the Libreville power grid was concluded; the construction of the Boubala hydro-power station entered the final stage; and smooth progress was made in the construction of two primary schools assisted by China.

Non-governmental and people-to-people exchanges maintained good momentum. In March 2013, Vice President of the Chinese People's Association for Friendship with Foreign Countries (CPAFFC) Feng Zuoku led a delegation to Gabon. Also in March 2013, a delegation of the Union of Women of the Gabonese National Assembly paid a visit to China at the invitation of the All-China Women's Federation. In April 2013, the Secretary-General of the Presidency of Gabon Laure Olga Gondjout visited China at the invitation of the CPAFFC. In June 2013, a delegation of the China-Africa Business Council attended the second session of the New York Forum Africa in Gabon. In August, China and Gabon signed a cooperation agreement on broadcasting Chinese TV series in French on the Gabon Television.





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