ethiopiantimes

August 11, 2014

Chinese companies and child labor on road construction projects in Ethiopia

Filed under: chinese roads — ethiopiantimes @ 9:49 pm
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Chinese road construction project in Tigray using child labor
Shire to Aksum road, northern Ethiopia:
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Gezhouba Corporation construction depot in Axum
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August 7, 2014

Quality of Chinese made roads in Ethiopia: Around 765 thousands birr damaged due to heavy flood

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As Fire and Emergency Prevention and Control Authority Communication Office head Ato Nigatu Mamo told to DireTube media; yesterday at 10 O’clock local time in Bole sub city woreda 13 in Sunrise building property of 700 thousands birr damaged as a result of flood.

In the same way the same day as a result of flood has entered in 7 residencies property of 65 thousands birr has been damaged in Kirkos sub-city woreda 15 around Kera behind the Mosque at 10:30 local time.

At 01:30 the same day around Olompia heavy flood brought passengers and vehicles to stay for a long time.

March 11, 2014

Which dictator killed the most?

Filed under: Dictators — ethiopiantimes @ 11:15 pm
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They say that it takes compassion for humanity, love for country, and a strong pursuit of justice and mercy to become a strong and respected leader of the masses. Every once in a while, however, there are those politicians or generals that decide to do things their own way. These cold-blooded dictators do not care for the value of life as much as they do achieving their selfish motives of domination, power, and immortality.

Thios infographic shows worldwide dictators ordered by the number of killings, one drop, one million dead.

Of course, the winner is Mao, followed by Stalin and then Hitler. I really hope hell exists and all of them are in there in some major eternal pain.

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Source: imgur.com/eyUn

January 8, 2014

Telecom Deal by China’s ZTE, Huawei in Ethiopia Faces Criticism

By

Matthew Dalton

connect

Updated Jan. 6, 2014 11:01 p.m. ET

Towers like the one pictured have spread cellphone use across Ethiopia. Matthew Dalton/The Wall Street Journal

LAKE WENCHI, Ethiopia—In the green highlands here southwest of Addis Ababa, farmers like Darara Baysa are proud owners of cellphones that run on a network built by China’s ZTE Corp. 000063.SZ +0.30%

The trouble is, they have to walk several miles to get a good signal. “The network doesn’t work well,” says Mr. Baysa, a former army sergeant, stopping on the unpaved road near his home to show his hot-pink smartphone.

Chinese telecom giant ZTE is expanding cell phone service in Ethiopia, changing how farmers do business. WSJ’s Matthew Dalton reports.

Among other troubles: Ethiopian government officials have in recent years complained to ZTE that the company’s contract for building the network requires Ethiopia to pay too much, say people familiar with the discussions.

The Ethiopian network’s glitches underline the broader troubles that sometimes face poorer nations as they borrow heavily to invest in telecommunications, roads, utilities and other infrastructure to help lift them out of poverty.

China’s financial firepower helps its firms win many of these contracts. But in agreeing to such deals, some governments appear to have flouted rules meant to foster sound public investment. When countries sidestep such rules, say experts at institutions such as the World Bank, big projects often cost more and are more likely to be poorly executed.

 

China’s impact has been particularly visible in telecom projects. In Ethiopia, ZTE beat out Western competitors in 2006 for a major telecom project by offering $1.5 billion in low-interest financing, funded by Chinese state-run banks.

A World Bank investigation found that the Ethiopian government appeared to ignore its own procurement rules requiring competitive bidding when it awarded the contract, which gave ZTE a monopoly on supplying telecom equipment for several years. The 2013 report also criticized Ethiopia for giving such a big project to one company and called for the country to audit the contract. It didn’t find that ZTE acted improperly.

Ethiopia ended ZTE’s monopoly in July 2013, bringing in its main Chinese rival, Huawei Technologies Co. The two companies split another big contract, for the next phase of the network’s expansion. Again, financing won the day, with the two pledging a total of $1.6 billion, people close to the negotiations say. Western equipment suppliers, such as Ericsson and Alcatel Lucent SA, ALU.FR +1.28% couldn’t match the Chinese offer, these people say.

A ZTE spokesman says it has complied with Ethiopia’s regulations. Ethiopia’s telecommunications minister and a spokesman for the state-owned telecom monopoly, Ethio Telecom, didn’t respond to queries. The World Bank report notes that Ethiopian authorities told its investigators that they invited eight companies to bid for the project.

Tony Duan, chief executive of Huawei’s Ethiopian division, says the company is “fully aware of the issues linked to poor quality telecom services and frequent interruptions of mobile networks in the country.”

Jia Chen, chief executive of ZTE’s Ethiopian business, acknowledges that the network’s service has been uneven. He blames delays in awarding the next phase of expansion, construction projects that cut telecom lines and slack maintenance by Ethio Telecom. “Maintaining the network is not our job,” he says. “We guarantee the quality of the network, but you have to guarantee our base stations get electricity.” He says ZTE must charge more in Ethiopia than elsewhere partly to offset the project loans’ large size and long repayment period of 13 years.

Ericsson and Alcatel decline to comment.

Complaints have surfaced in other developing countries about alleged overbilling, mismanagement and flouted contracting rules in telecom deals financed by Chinese state-run banks.

Kenya’s government late last year canceled a contract for a national police-communication system that was tentatively awarded to ZTE last year, with funding to come from loans pledged by China, according to Kenyan government documents. Anticorruption activists say Kenya violated its constitution by letting only Chinese firms bid on the deal, while a government review of ZTE’s bid claimed the company offered its equipment at double normal market prices.

ZTE appealed the decision to a review board, which sided with the Kenyan government: “It does not require rocket science in view of the evidence before the Board to establish that (ZTE’s) financial proposal was highly exaggerated,” according to the board’s decision, reviewed by The Wall Street Journal.

ZTE declines to comment. The Kenyan government didn’t respond to queries.

Uganda in 2011 canceled a $74 million contract that the Uganda Broadcasting Corporation signed with Huawei—with Export-Import Bank of China funding—saying procurement rules were flouted. Ugandan government officials didn’t respond to queries. Huawei declines to comment on the Uganda matter. The Export-Import Bank of China declines to comment for this article.

A $330 million Philippines contract with ZTE in 2007 to build a broadband network—using money from the Export-Import Bank of China—negotiated without competitive bidding, rocked the government after lawmakers alleged that ZTE inflated the project’s price to pay kickbacks to government officials.

Anticorruption prosecutors charged then-President Gloria Macapagal Arroyo with accepting bribes to approve the deal; the trial is continuing. Ms. Arroyo canceled the contract when she was president, and her lawyer says she maintains her innocence. ZTE declines to comment, citing the ongoing legal process. In a statement to the Chinese press in 2007, ZTE said it had done nothing wrong.

Governments need competitive bidding and other controls to get the best prices and ensure projects are well-planned, says Neill Stansbury, director of London-based Global Infrastructure Anti-Corruption Centre, who contributed to the World Bank report on Ethiopia’s project.

Large loans can obscure project costs, he says: “You may end up overall, over 20 years, with a much more expensive package than you would have done buying another manufacturer’s equipment at a more expensive financing cost.”

ZTE and Huawei have grown to be two of the world’s largest telecom-equipment makers, aided by access to hefty financing that helps them outbid Western rivals.

Western companies can get loans supported by government export-finance banks. But almost all these banks, unlike China’s, have signed an agreement backed by the Organization for Economic Cooperation and Development limiting such lending, especially to countries with debt-problem histories.

The state-owned Export-Import Bank of China and the China Development Bank finance exports and overseas projects. They provided nearly $50 billion in financing for Africa from 1995 through 2012, mostly export credits, according to estimates by Deborah Brautigam, director of the International Development Program at Johns Hopkins University. Chinese companies also get financing from state-run China Export and Credit Insurance Corp.

The U.S. Export-Import Bank has provided about $12 billion in financing for African buyers during the same period. The U.S., the European Union, China and other nations have been negotiating international guidelines on export financing that Western governments hope will restrain Chinese state-run banks.

China has had a sizable presence in Ethiopia for more than a decade, and ties between the two grew closer after Ethiopia’s disputed elections in 2005. Then-Prime Minister Meles Zenawi, who led Ethiopia for more than 20 years until his death in 2012, began to view the West as less friendly.

He aligned Ethiopia with China, awarding ZTE the 2006 telecom deal, which was funded with loans from the Export-Import Bank and China Development Bank. China Development Bank didn’t respond to a request for comment.

A ZTE spokesman says it has built more than 2,000 cellphone transmission sites in Ethiopia and laid about 5,000 miles of fiber-optic cable in forbidding terrain. ZTE says paying cellphone users in Ethiopia have soared from around one million in 2005 to over 12 million in 2013, a seventh of the population.

The network has vastly improved quality of life for many. Cellphone service now extends across much of Ethiopia, an impoverished country whose 90 million people form one of Africa’s largest, fastest-growing markets.

In rural areas, where most live, the network has ushered in new ways of doing business.

Afework Wondimu uses his cellphone to check the price of teff, a millet-like grain used to make injera, the Ethiopian cuisine’s ubiquitous flat bread. If the price is good, he loads big bundles of teff onto donkeys and heads into town.

“Otherwise we keep it and find another way to sell it another time,” he says, as a team of oxen threshed golden piles of teff on his farm west of the capital.

Two years ago, before he got a cellphone, Mr. Baysa, the farmer with the pink phone, says he sometimes had to travel three days from his home by foot, horse and bus simply to check on friends and family.

Still, he wouldn’t mind a luxury he has heard others enjoy: phoning from bed.

Ethiopians elsewhere also complain about the network’s spottiness. In the capital of Addis Ababa, the phone network appears overburdened and is sometimes inaccessible during the day.

If the network and other infrastructure projects don’t work well, Ethiopia could see economic growth suffer and its foreign-exchange reserves depleted to repay debts, says Benedicte Vibe Christensen, an economist who was an Africa expert at the International Monetary Fund until 2009.

“If the quality of investment projects is not good, at the end of the day the risk is that foreign exchange reserves would be insufficient to repay all loans,” she says.

The Chinese loans for the 2006 project account for about 12% of Ethiopia’s nondomestic public-sector debt, according to government data. Ethio Telecom doesn’t publish financial statements. It started repaying the loan in 2010, and it has repaid around $300 million in principal, according to a person familiar with the repayment.

Financing has a cost: ZTE’s Mr. Jia says ZTE must charge Ethiopia more for its network partly because the loans are large, the repayment period is long—13 years—and ZTE is liable if Ethio Telecom doesn’t repay.

“If you just think about the price compared with the others, you think, ‘Oh, your prices are very high, then you make a lot of money,’ ” Mr. Jia says. “But you have to think: This money, I’m going to get it back in 13 years!”

The network’s uneven performance echoes worries that former Ethiopian telecom managers say they had about ZTE’s gear before it won the 2006 contract. Calls to and from ZTE-covered areas were frequently dropped, and the mobile-phone signal in those areas was so weak that people living in brick or stone houses often had to go outside to use their phones, the former managers say.

A ZTE spokesman says interconnection problems such as those the network experienced in that era are a common result of different suppliers’ equipment using the same frequency.

Some of those managers say they raised concerns about giving contracts to ZTE—and were punished for it.

The former managers say they argued that Ethiopia’s telecom operator hadn’t run a proper competitive bidding process for the 2006 ZTE contract. They say they worried the deal would make Ethiopia completely dependent on ZTE.

“We complained: It will damage the future of the Ethiopian Telecommunications Corporation,” says a former manager at the ETC, a predecessor to Ethio Telecom. “If we select only one company, we are going to depend on one company.”

The managers who say they raised the concerns were among two dozen employees that the Federal Ethics and Anti-Corruption Commission of Ethiopia prosecuted in 2008 for violating government contracting rules, mainly for a previous contract that they awarded to Ericsson in 2005.

A court sentenced some to jail, including the former chief executive, Tesfaye Birru, who has denied the charges and remains in jail.

Senior government officials “tried to intimidate others not to speak against the Chinese company,” says the former ETC manager.

Officials at the anticorruption commission deny the prosecutions were an attempt to silence ZTE’s critics. The commission didn’t accuse the managers of personally profiting from the Ericsson deal.

The anticorruption commission says: “What is confirmed is that the defendants abused their power, violated existing rules and regulations, conspired to benefit others and caused the government to incur unnecessary costs.”

A former Ericsson manager in Ethiopia who is no longer in the country, Moncef Mettiji, says there were no improprieties involved in the 2005 contract.

—Olivia Geng contributed to this article.

Write to Matthew Dalton at Matthew.Dalton@wsj.com

January 14, 2013

China in Ethiopia: oppressing, torturing, raping, killing, looting in Ethiopia(Amharic video)

Filed under: China — ethiopiantimes @ 12:13 pm
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December 7, 2012

Chinese blamed for bird decline in Ethiopia

Filed under: China,Ethiopia — ethiopiantimes @ 10:10 am
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Liben Lark

Disappearing habitat and climate change have been blamed for a decline in the Ethiopia’s bird populations – now a conservationist says the Chinese nationals living in Ethiopia could be causing the Ethiopian birds to disappear.
Speaking to the Amharic Reporter published yesterday, director of Ethiopian Wildlife and Natural History Society, Mengistu Wondafrash, said many of the Chinese living in Ethiopia are using a a board with sticky liquid and cereals to hunt birds and consume them.This is the first time a notable conservationist spoke openly about what others knew but not dared to express.
Other than threats of overpopulation, ecology and land management, the Chinese are becoming the reasons behind declines of bird population in Ethiopia, the conservationist explained.
Mengistu said his association has issued letters to responsible parties to warn Chinese to stop slaughtering birds.
Many changes have also affected bird populations – most notably changes in land use and the management of the countryside, Mengistu said.
These changes can change the amount or quality of key resources needed by birds, such as suitable places to nest or a shortage of food in summer or winter, he added.
Mengistu stated that rare birds like Liben larks are also continuing to be at risk. Liben larks that are restricted to a very small range of grassland that measures only 36 square kilometers in Negele Borena are experiencing widespread decline and if nothing is done and their populations continue to decline, they may also have the unfortunate distinction of being the first bird to go extinct in Ethiopia, Mengistu said.Two other Ethiopian endemics share an incredibly limited range in southern Ethiopian with the White-tailed Swallow Hirundo megaensis and Ethiopian (Stresemann’s) Bush Crow Zavattariornis stresemanni. The flagship bird of Birdfair 2010, Prince Ruspoli’s Turaco Tauraco ruspolii, has a limited distribution to the northeast of Yabello.

October 30, 2012

How the Chinese leaders steal billions (A lesson for Ethiopians)

Filed under: China — ethiopiantimes @ 11:59 am
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The late Meles and his Chinese counterpart, Wen Jiabao in 2011 in Beijing

Editor’s Note– Corruption in Ethiopia is so rife that the country had lost over $11.7 billion to illicit capital outflows from 2000 to 2009, according to a report by the Global Financial Integrity. The people of Ethiopia are being bled dry, the report adds. Well, it is no brainer that the leaders in the massive theft are the Meles-Azeb family and their cohorts in power. The following report may shed a powerful light on how the corrupt officials in Ethiopia stash away the money they steal from the Ethiopian people:

 

 

BEIJING — The mother of China’s prime minister was a schoolteacher in northern China. His father was ordered to tend pigs in one of Mao’s political campaigns. And during childhood, “my family was extremely poor,” the prime minister, Wen Jiabao, said in a speech last year.

But now 90, the prime minister’s mother, Yang Zhiyun, not only left poverty behind, she became outright rich, at least on paper, according to corporate and regulatory records. Just one investment in her name, in a large Chinese financial services company, had a value of $120 million five years ago, the records show.

The details of how Ms. Yang, a widow, accumulated such wealth are not known, or even if she was aware of the holdings in her name. But it happened after her son was elevated to China’s ruling elite, first in 1998 as vice prime minister and then five years later as prime minister.

Many relatives of Wen Jiabao, including his son, daughter, younger brother and brother-in-law, have become extraordinarily wealthy during his leadership, an investigation by The New York Times shows. A review of corporate and regulatory records indicates that the prime minister’s relatives — some of whom, including his wife, have a knack for aggressive deal making — have controlled assets worth at least $2.7 billion.

In many cases, the names of the relatives have been hidden behind layers of partnerships and investment vehicles involving friends, work colleagues and business partners. Untangling their financial holdings provides an unusually detailed look at how politically connected people have profited from being at the intersection of government and business as state influence and private wealth converge in China’s fast-growing economy.

Unlike most new businesses in China, the family’s ventures sometimes received financial backing from state-owned companies, including China Mobile, one of the country’s biggest phone operators, the documents show. At other times, the ventures won support from some of Asia’s richest tycoons. The Times found that Mr. Wen’s relatives accumulated shares in banks, jewelers, tourist resorts, telecommunications companies and infrastructure projects, sometimes by using offshore entities.

The holdings include a villa development project in Beijing; a tire factory in northern China; a company that helped build some of Beijing’s Olympic stadiums, including the well-known “Bird’s Nest”; and Ping An Insurance, one of the world’s biggest financial services companies.

As prime minister in an economy that remains heavily state-driven, Mr. Wen, who is best known for his simple ways and common touch, more importantly has broad authority over the major industries where his relatives have made their fortunes. Chinese companies cannot list their shares on a stock exchange without approval from agencies overseen by Mr. Wen, for example. He also has the power to influence investments in strategic sectors like energy and telecommunications.

Because the Chinese government rarely makes its deliberations public, it is not known what role — if any — Mr. Wen, who is 70, has played in most policy or regulatory decisions. But in some cases, his relatives have sought to profit from opportunities made possible by those decisions.

The prime minister’s younger brother, for example, has a company that was awarded more than $30 million in government contracts and subsidies to handle wastewater treatment and medical waste disposal for some of China’s biggest cities, according to estimates based on government records. The contracts were announced after Mr. Wen ordered tougher regulations on medical waste disposal in 2003 after the SARS outbreak.

In 2004, after the State Council, a government body Mr. Wen presides over, exempted Ping An Insurance and other companies from rules that limited their scope, Ping An went on to raise $1.8 billion in an initial public offering of stock. Partnerships controlled by Mr. Wen’s relatives — along with their friends and colleagues — made a fortune by investing in the company before the public offering.

In 2007, the last year the stock holdings were disclosed in public documents, those partnerships held as much as $2.2 billion worth of Ping An stock, according to an accounting of the investments by The Times that was verified by outside auditors. Ping An’s overall market value is now nearly $60 billion.

Ping An said in a statement that the company did “not know the background of the entities behind our shareholders.” The statement said, “Ping An has no means to know the intentions behind shareholders when they buy and sell our shares.”

While Communist Party regulations call for top officials to disclose their wealth and that of their immediate family members, no law or regulation prohibits relatives of even the most senior officials from becoming deal-makers or major investors — a loophole that effectively allows them to trade on their family name. Some Chinese argue that permitting the families of Communist Party leaders to profit from the country’s long economic boom has been important to ensuring elite support for market-oriented reforms.

Even so, the business dealings of Mr. Wen’s relatives have sometimes been hidden in ways that suggest the relatives are eager to avoid public scrutiny, the records filed with Chinese regulatory authorities show. Their ownership stakes are often veiled by an intricate web of holdings as many as five steps removed from the operating companies, according to the review.

In the case of Mr. Wen’s mother, The Times calculated her stake in Ping An — valued at $120 million in 2007 — by examining public records and government-issued identity cards, and by following the ownership trail to three Chinese investment entities. The name recorded on his mother’s shares was Taihong, a holding company registered in Tianjin, the prime minister’s hometown.

The apparent efforts to conceal the wealth reflect the highly charged politics surrounding the country’s ruling elite, many of whom are also enormously wealthy but reluctant to draw attention to their riches. When Bloomberg News reported in June that the extended family of Vice President Xi Jinping, set to become China’s next president, had amassed hundreds of millions of dollars in assets, the Chinese government blocked access inside the country to the Bloomberg Web site.

“In the senior leadership, there’s no family that doesn’t have these problems,” said a former government colleague of Wen Jiabao who has known him for more than 20 years and who spoke on the condition of anonymity. “His enemies are intentionally trying to smear him by letting this leak out.”

The Times presented its findings to the Chinese government for comment. The Foreign Ministry declined to respond to questions about the investments, the prime minister or his relatives. Members of Mr. Wen’s family also declined to comment or did not respond to requests for comment.

Duan Weihong, a wealthy businesswoman whose company, Taihong, was the investment vehicle for the Ping An shares held by the prime minister’s mother and other relatives, said the investments were actually her own. Ms. Duan, who comes from the prime minister’s hometown and is a close friend of his wife, said ownership of the shares was listed in the names of Mr. Wen’s relatives in an effort to conceal the size of Ms. Duan’s own holdings.

“When I invested in Ping An I didn’t want to be written about,” Ms. Duan said, “so I had my relatives find some other people to hold these shares for me.”

But it was an “accident,” she said, that her company chose the relatives of the prime minister as the listed shareholders — a process that required registering their official ID numbers and obtaining their signatures. Until presented with the names of the investors by The Times, she said, she had no idea that they had selected the relatives of Wen Jiabao.

The review of the corporate and regulatory records, which covers 1992 to 2012, found no holdings in Mr. Wen’s name. And it was not possible to determine from the documents whether he recused himself from any decisions that might have affected his relatives’ holdings, or whether they received preferential treatment on investments.

For much of his tenure, Wen Jiabao has been at the center of rumors and conjecture about efforts by his relatives to profit from his position. Yet until the review by The Times, there has been no detailed accounting of the family’s riches.

His wife, Zhang Beili, is one of the country’s leading authorities on jewelry and gemstones and is an accomplished businesswoman in her own right. By managing state diamond companies that were later privatized, The Times found, she helped her relatives parlay their minority stakes into a billion-dollar portfolio of insurance, technology and real estate ventures.

The couple’s only son sold a technology company he started to the family of Hong Kong’s richest man, Li Ka-shing, for $10 million, and used another investment vehicle to establish New Horizon Capital, now one of China’s biggest private equity firms, with partners like the government of Singapore, according to records and interviews with bankers.

The prime minister’s younger brother, Wen Jiahong, controls $200 million in assets, including wastewater treatment plants and recycling businesses, the records show.

As prime minister, Mr. Wen has staked out a position as a populist and a reformer, someone whom the state-run media has nicknamed “the People’s Premier” and “Grandpa Wen” because of his frequent outings to meet ordinary people, especially in moments of crisis like natural disasters.

While it is unclear how much the prime minister knows about his family’s wealth, State Department documents released by the WikiLeaks organization in 2010 included a cable that suggested Mr. Wen was aware of his relatives’ business dealings and unhappy about them.

“Wen is disgusted with his family’s activities, but is either unable or unwilling to curtail them,” a Chinese-born executive working at an American company in Shanghai told American diplomats, according to the 2007 cable.

China’s ‘Diamond Queen’

It is no secret in China’s elite circles that the prime minister’s wife, Zhang Beili, is rich, and that she has helped control the nation’s jewelry and gem trade. But her lucrative diamond businesses became an off-the-charts success only as her husband moved into the country’s top leadership ranks, the review of corporate and regulatory records by The Times found.

A geologist with an expertise in gemstones, Ms. Zhang is largely unknown among ordinary Chinese. She rarely travels with the prime minister or appears with him, and there are few official photographs of the couple together. And while people who have worked with her say she has a taste for jade and fine diamonds, they say she usually dresses modestly, does not exude glamour and prefers to wield influence behind the scenes, much like the relatives of other senior leaders.

The State Department documents released by WikiLeaks included a suggestion that Mr. Wen had once considered divorcing Ms. Zhang because she had exploited their relationship in her diamond trades. Taiwanese television reported in 2007 that Ms. Zhang had bought a pair of jade earrings worth about $275,000 at a Beijing trade show, though the source — a Taiwanese trader — later backed off the claim and Chinese government censors moved swiftly to block coverage of the subject in China, according to news reports at the time.

“Her business activities are known to everyone in the leadership,” said one banker who worked with relatives of Wen Jiabao. The banker said it was not unusual for her office to call upon businesspeople. “And if you get that call, how can you say no?”

Zhang Beili first gained influence in the 1990s, while working as a regulator at the Ministry of Geology. At the time, China’s jewelry market was still in its infancy.

While her husband was serving in China’s main leadership compound, known as Zhongnanhai, Ms. Zhang was setting industry standards in the jewelry and gem trade. She helped create the National Gemstone Testing Center in Beijing, and the Shanghai Diamond Exchange, two of the industry’s most powerful institutions.

In a country where the state has long dominated the marketplace, jewelry regulators often decided which companies could set up diamond-processing factories, and which would gain entry to the retail jewelry market. State regulators even formulated rules that required diamond sellers to buy certificates of authenticity for any diamond sold in China, from the government-run testing center in Beijing, which Ms. Zhang managed.

As a result, when executives from Cartier or De Beers visited China with hopes of selling diamonds and jewelry here, they often went to visit Ms. Zhang, who became known as China’s “diamond queen.”

“She’s the most important person there,” said Gaetano Cavalieri, president of the World Jewelry Confederation in Switzerland. “She was bridging relations between partners — Chinese and foreign partners.”

As early as 1992, people who worked with Ms. Zhang said, she had begun to blur the line between government official and businesswoman. As head of the state-owned China Mineral and Gem Corporation, she began investing the state company’s money in start-ups. And by the time her husband was named vice premier, in 1998, she was busy setting up business ventures with friends and relatives.

The state company she ran invested in a group of affiliated diamond companies, according to public records. Many of them were run by Ms. Zhang’s relatives — or colleagues who had worked with her at the National Gemstone Testing Center.

In 1993, for instance, the state company Ms. Zhang ran helped found Beijing Diamond, a big jewelry retailer. A year later, one of her younger brothers, Zhang Jianming, and two of her government colleagues personally acquired 80 percent of the company, according to shareholder registers. Beijing Diamond invested in Shenzhen Diamond, which was controlled by her brother-in-law, Wen Jiahong, the prime minister’s younger brother.

Among the successful undertakings was Sino-Diamond, a venture financed by the state-owned China Mineral and Gem Corporation, which she headed. The company had business ties with a state-owned company managed by another brother, Zhang Jiankun, who worked as an official in Jiaxing, Ms. Zhang’s hometown, in Zhejiang Province.

In the summer of 1999, after securing agreements to import diamonds from Russia and South Africa, Sino-Diamond went public, raising $50 million on the Shanghai Stock Exchange. The offering netted Ms. Zhang’s family about $8 million, according to corporate filings.

Although she was never listed as a shareholder, former colleagues and business partners say Ms. Zhang’s early diamond partnerships were the nucleus of a larger portfolio of companies she would later help her family and colleagues gain a stake in.

The Times found no indication that Wen Jiabao used his political clout to influence the diamond companies his relatives invested in. But former business partners said that the family’s success in diamonds, and beyond, was often bolstered with financial backing from wealthy businessmen who sought to curry favor with the prime minister’s family.

“After Wen became prime minister, his wife sold off some of her diamond investments and moved into new things,” said a Chinese executive who did business with the family. He asked not to be named because of fear of government retaliation. Corporate records show that beginning in the late 1990s, a series of rich businessmen took turns buying up large stakes in the diamond companies, often from relatives of Mr. Wen, and then helped them reinvest in other lucrative ventures, like real estate and finance.

According to corporate records and interviews, the businessmen often supplied accountants and office space to investment partnerships partly controlled by the relatives.

“When they formed companies,” said one businessman who set up a company with members of the Wen family, “Ms. Zhang stayed in the background. That’s how it worked.”

The Only Son

Late one evening early this year, the prime minister’s only son, Wen Yunsong, was in the cigar lounge at Xiu, an upscale bar and lounge at the Park Hyatt in Beijing. He was having cocktails as Beijing’s nouveau riche gathered around, clutching designer bags and wearing expensive business suits, according to two guests who were present.

In China, the children of senior leaders are widely believed to be in a class of their own. Known as “princelings,” they often hold Ivy League degrees, get V.I.P. treatment, and are even offered preferred pricing on shares in hot stock offerings.

They are also known as people who can get things done in China’s heavily regulated marketplace, where the state controls access. And in recent years, few princelings have been as bold as the younger Mr. Wen, who goes by the English name Winston and is about 40 years old.

A Times review of Winston Wen’s investments, and interviews with people who have known him for years, show that his deal-making has been extensive and lucrative, even by the standards of his princeling peers.

State-run giants like China Mobile have formed start-ups with him. In recent years, Winston Wen has been in talks with Hollywood studios about a financing deal.

Concerned that China does not have an elite boarding school for Chinese students, he recently hired the headmasters of Choate and Hotchkiss in Connecticut to oversee the creation of a $150 million private school now being built in the Beijing suburbs.

Winston Wen and his wife, moreover, have stakes in the technology industry and an electric company, as well as an indirect stake in Union Mobile Pay, the government-backed online payment platform — all while living in the prime minister’s residence, in central Beijing, according to corporate records and people familiar with the family’s investments.

“He’s not shy about using his influence to get things done,” said one venture capitalist who regularly meets with Winston Wen.

The younger Mr. Wen declined to comment. But in a telephone interview, his wife, Yang Xiaomeng, said her husband had been unfairly criticized for his business dealings.

“Everything that has been written about him has been wrong,” she said. “He’s really not doing that much business anymore.”

Winston Wen was educated in Beijing and then earned an engineering degree from the Beijing Institute of Technology. He went abroad and earned a master’s degree in engineering materials from the University of Windsor, in Canada, and an M.B.A. from the Kellogg School of Business at Northwestern University in Evanston, Ill., just outside Chicago.

When he returned to China in 2000, he helped set up three successful technology companies in five years, according to people familiar with those deals. Two of them were sold to Hong Kong businessmen, one to the family of Li Ka-shing, one of the wealthiest men in Asia.

Winston Wen’s earliest venture, an Internet data services provider called Unihub Global, was founded in 2000 with $2 million in start-up capital, according to Hong Kong and Beijing corporate filings. Financing came from a tight-knit group of relatives and his mother’s former colleagues from government and the diamond trade, as well as an associate of Cheng Yu-tung, patriarch of Hong Kong’s second-wealthiest family. The firm’s earliest customers were state-owned brokerage houses and Ping An, in which the Wen family has held a large financial stake.

He made an even bolder move in 2005, by pushing into private equity when he formed New Horizon Capital with a group of Chinese-born classmates from Northwestern. The firm quickly raised $100 million from investors, including SBI Holdings, a division of the Japanese group SoftBank, and Temasek, the Singapore government investment fund.

Under Mr. Wen, New Horizon established itself as a leading private equity firm, investing in biotech, solar, wind and construction equipment makers. Since it began operations, the firm has returned about $430 million to investors, a fourfold profit, according to SBI Holdings.

“Their first fund was dynamite,” said Kathleen Ng, editor of Asia Private Equity Review, an industry publication in Hong Kong. “And that allowed them to raise a lot more money.”

Today, New Horizon has more than $2.5 billion under management.

Some of Winston Wen’s deal-making, though, has attracted unwanted attention for the prime minister.

In 2010, when New Horizon acquired a 9 percent stake in a company called Sihuan Pharmaceuticals just two months before its public offering, the Hong Kong Stock Exchange said the late-stage investment violated its rules and forced the firm to return the stake. Still, New Horizon made a $46.5 million profit on the sale.

Soon after, New Horizon announced that Winston Wen had handed over day-to-day operations and taken up a position at the China Satellite Communications Corporation, a state-owned company that has ties to the Chinese space program. He has since been named chairman.

The Tycoons

In the late 1990s, Duan Weihong was managing an office building and several other properties in Tianjin, the prime minister’s hometown in northern China, through her property company, Taihong. She was in her 20s and had studied at the Nanjing University of Science and Technology.

Around 2002, Ms. Duan went into business with several relatives of Wen Jiabao, transforming her property company into an investment vehicle of the same name. The company helped make Ms. Duan very wealthy.

It is not known whether Ms. Duan, now 43, is related to the prime minister. In a series of interviews, she first said she did not know any members of the Wen family, but later described herself as a friend of the family and particularly close to Zhang Beili, the prime minister’s wife. As happened to a handful of other Chinese entrepreneurs, Ms. Duan’s fortunes soared as she teamed up with the relatives and their network of friends and colleagues, though she described her relationship with them involving the shares in Ping An as existing on paper only and having no financial component.

Ms. Duan and other wealthy businesspeople — among them, six billionaires from across China — have been instrumental in getting multimillion-dollar ventures off the ground and, at crucial times, helping members of the Wen family set up investment vehicles to profit from them, according to investment bankers who have worked with all parties.

Established in Tianjin, Taihong had spectacular returns. In 2002, the company paid about $65 million to acquire a 3 percent stake in Ping An before its initial public offering, according to corporate records and Ms. Duan’s graduate school thesis. Five years later, those shares were worth $3.7 billion

The company’s Hong Kong affiliate, Great Ocean, also run by Ms. Duan, later formed a joint venture with the Beijing government and acquired a huge tract of land adjacent to Capital International Airport. Today, the site is home to a sprawling cargo and logistics center. Last year, Great Ocean sold its 53 percent stake in the project to a Singapore company for nearly $400 million.

That deal and several other investments, in luxury hotels, Beijing villa developments and the Hong Kong-listed BBMG, one of China’s largest building materials companies, have been instrumental to Ms. Duan’s accumulation of riches, according to The Times’s review of corporate records.

The review also showed that over the past decade there have been nearly three dozen individual shareholders of Taihong, many of whom are either relatives of Wen Jiabao or former colleagues of his wife.

The other wealthy entrepreneurs who have worked with the prime minister’s relatives declined to comment for this article. Ms. Duan strongly denied having financial ties to the prime minister or his relatives and said she was only trying to avoid publicity by listing others as owning Ping An shares. “The money I invested in Ping An was completely my own,” said Ms. Duan, who has served as a member of the Ping An board of supervisors. “Everything I did was legal.”

Another wealthy partner of the Wen relatives has been Cheng Yu-tung, who controls the Hong Kong conglomerate New World Development and is one of the richest men in Asia, worth about $15 billion, according to Forbes.

In the 1990s, New World was seeking a foothold in mainland China for a sister company that specializes in high-end retail jewelry. The retail chain, Chow Tai Fook, opened its first store in China in 1998.

Mr. Cheng and his associates invested in a diamond venture backed by the relatives of Mr. Wen and co-invested with them in an array of corporate entities, including Sino-Life, National Trust and Ping An, according to records and interviews with some of those involved. Those investments by Mr. Cheng are now worth at least $5 billion, according to the corporate filings. Chow Tai Fook, the jewelry chain, has also flourished. Today, China accounts for 60 percent of the chain’s $4.2 billion in annual revenue.

Mr. Cheng, 87, could not be reached for comment. Calls to New World Development were not returned.

Fallout for Premier

In the winter of 2007, just before he began his second term as prime minister, Wen Jiabao called for new measures to fight corruption, particularly among high-ranking officials.

“Leaders at all levels of government should take the lead in the antigraft drive,” he told a gathering of high-level party members in Beijing. “They should strictly ensure that their family members, friends and close subordinates do not abuse government influence.”

The speech was consistent with the prime minister’s earlier drive to toughen disclosure rules for public servants, and to require senior officials to reveal their family assets.

Whether Mr. Wen has made such disclosures for his own family is unclear, since the Communist Party does not release such information. Even so, many of the holdings found by The Times would not need to be disclosed under the rules since they are not held in the name of the prime minister’s immediate family — his wife, son and daughter.

Eighty percent of the $2.7 billion in assets identified in The Times’s investigation and verified by the outside auditors were held by, among others, the prime minister’s mother, his younger brother, two brothers-in-law, a sister-in-law, daughter-in-law and the parents of his son’s wife, none of whom is subject to party disclosure rules. The total value of the relatives’ stake in Ping An is based on calculations by The Times that were confirmed by the auditors. The total includes shares held by the relatives that were sold between 2004 and 2006, and the value of the remaining shares in late 2007, the last time the holdings were publicly disclosed.

Legal experts said that determining the precise value of holdings in China could be difficult because there might be undisclosed side agreements about the true beneficiaries.

“Complex corporate structures are not necessarily insidious,” said Curtis J. Milhaupt, a Columbia University Law School professor who has studied China’s corporate group structures. “But in a system like China’s, where corporate ownership and political power are closely intertwined, shell companies magnify questions about who owns what and where the money came from.”

Among the investors in the Wen family ventures are longtime business associates, former colleagues and college classmates, including Yu Jianming, who attended Northwestern with Winston Wen, and Zhang Yuhong, a longtime colleague of Wen Jiahong, the prime minister’s younger brother. The associates did not return telephone calls seeking comment.

Revelations about the Wen family’s wealth could weaken him politically.

Next month, at the 18th Party Congress in Beijing, the Communist Party is expected to announce a new generation of leaders. But the selection process has already been marred by one of the worst political scandals in decades, the downfall of Bo Xilai, the Chongqing party boss, who was vying for a top position.

In Beijing, Wen Jiabao is expected to step down as prime minister in March at the end of his second term. Political analysts say that even after leaving office he could remain a strong backstage political force. But documents showing that his relatives amassed a fortune during his tenure could diminish his standing, the analysts said.

“This will affect whatever residual power Wen has,” said Minxin Pei, an expert on Chinese leadership and a professor of government at Claremont McKenna College in California.

The prime minister’s supporters say he has not personally benefited from his extended family’s business dealings, and may not even be knowledgeable about the extent of them.

Last March, the prime minister hinted that he was at least aware of the persistent rumors about his relatives. During a nationally televised news conference in Beijing, he insisted that he had “never pursued personal gain” in public office.

“I have the courage to face the people and to face history,” he said in an emotional session. “There are people who will appreciate what I have done, but there are also people who will criticize me. Ultimately, history will have the final say.”

January 30, 2012

African Dictators gathered togethre in HQ funded by Chinese sponsers of dictators

Filed under: Africa — ethiopiantimes @ 11:54 am
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January 30, 2012 by Olalekan Adetayo, Addis Ababa, Ethiopia Leave a Comment
AFRICAN SUMMIT

The 20-storey African Union Conference Centre built and donated to Africa by the Chinese government was inaugurated on Saturday in Addis Ababa, Ethiopia amidst fanfare.

President Goodluck Jonathan attended the inauguration and several other meetings of the AU alongside his counterparts from the continent.

The inauguration featured colourful cultural display by many African countries including Nigeria.

The 100 metre tall centre said to the tallest tower in Ethiopia incorporating a 2,500 capacity plenary hall was built at a cost of $200 million.

In his opening remarks, the Chairperson of the African Union Commission, Dr. Jean Ping, described the building as a dream come true.

Ping expressed his gratitude to both the governments of Ethiopia and China.

“Our dream came true and we are now overlooking a modern architectural jewel symbolising the historical relations between China and our continent,” he said.

He added that the new conference centre would help promote the AU’s presence and its competitiveness in the global arena, as well as improve its working capacity.

The Prime Minister of the Democratic Republic of Ethiopia, Mr. Meles Zenawi, said the new headquarters of the continental organisation which has been at the centre of the struggle for the African integration and development was a symbol of the rise of Africa.

He noted that over the past decades and despite rampant hopelessness throughout the continent, China-Africa cooperation has gone from strength to strength.

“The future prospects of our partnership are even brighter and it is therefore very appropriate for China to decide to build this hall,” he said.

President of the Republic of Equatorial Guinea and Chairperson of the African Union, Mr. Teodoro Mbasogo, said the new conference centre was a reflection of the new Africa, and that it endows Africans with the right tools to showcase their human and natural resources.

The inauguration of the building concluded with the presentation of gifts to seven Chinese officials who played a key role in the construction of the centre followed by the handing over of the golden key of the conference centre to the Chairperson of the Union who then handed it over the Chairperson of the AU.

Following a group photograph and amidst cultural performances drawn from member states of the AU, a statue of Kwame Nkrumah was unveiled.

There was also a brief ceremony to lay the foundation stone for the construction of an African Union Human Rights Memorial.

July 23, 2011

Ethiopia Awards Ogaden Gas Fields to Chinese Company

Filed under: Ethiopia — ethiopiantimes @ 10:02 pm
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July 23, 2011 – The Ministry of Mines yesterday awarded the Calub and Hilala natural gas fields and eight exploration blocks found in the Ogaden basin to a Chinese oil and gas company, PetroTrans Company, according to the Ethiopian Reporter.

Sikinesh Ejigu, minister of Mines and chairman of PetroTrans, Mr. John Chin, signed a petroleum development agreement and four exploration and production sharing agreements at the Sheraton Addis. The petroleum development agreement will enable PetroTrans to develop the natural gas reserves in the Calub and Hilala localities found in the Somali Regional State. The gas fields, which have an estimated reserve of four TCF (trillion cubic feet), are found 1200 km south east of Addis Ababa.

The gas fields as well as all the exploration blocks were previously held by the Malaysian oil and gas giant Petronas. The ministry floated all Petronas’s concessions in Ethiopia except the Gambella block, found in west Ethiopia near the Sudanese border. An independent petroleum expert told The Reporter that all the blocks held by Petronas are promising for oil and gas discovery.

PetroTrans Company Ltd. Was established in 1997. Founded by Mr. John Chin, it has been mainly involved in the Upstream Oil & Gas Industry, as well as Oil & Gas financing and leasing.

Following the withdrawal of Petronas from Ethiopia, the Ministry of Mines last March invited seven companies to bid for Calub and Hilala gas fields and the eight exploration blocks deemed promising for oil and gas discovery. The total area of the exploration blocks is 93,000 sq.km while the Calub and Hilala gasfileds cover 283 sq.km.

The seven local and international oil companies shortlisted by the ministry bought the bid document and four of them submitted their technical and financial proposals to the ministry. The companies that returned the bid documents were PetroTrans, South West Energy Ltd, an Ethiopian oil and gas company, Cobramar of Seychelles and National Oil Company (NOC), a local petroleum which has a chain of fuel stations across the nation. NOC was established by the Ethiopian-born Saudi billionaire, Sheik Mohammed Hussien Ali Alamoudi.

The ministry said the best proposals were submitted by PetroTrans. According to the ministry, the company will pay the Ethiopian government an upfront payment of USD 130 million and will invest up to four billion dollars on the gas development project. “When you compare the proposals of PetroTrans with the proposals offered by the other companies it is incomparable. PetroTrans’s proposal by far exceeds that of the others,” Sinkenesh said at the signing ceremony.

John Chin said that his company is committed to develop the proven gas reserves and discover new oil and gas reserves. “We have discovered oil in Sudan, Chad and Nigeria. We want to do the same here,” he told The Reporter. He said ten years ago his company built a 600-km oil pipeline from Port Sudan to Khartoum in less than ten months. “Two years ago we built 8300 kms of pipeline in China in less than two years. Once we get into a commitment we are very serious and we do it quickly,” He said. The company hopes to finalise the project within 30 months. “A study has to be undertaken to determine where to build the gas treatment plant. We also have to conduct a survey to identify the route of the pipeline,” Chin said.

PetroTrans has been working with two renowned Chinese oil companies – SinoPec International and CNPC. The gas pipeline construction work will be given to either of the two, a company executive told The Reporter.

PetroTrans will pay to the government 35 percent income tax and a five percent royalty fee. The Ethiopian government will have a five percent stake in the project.

Source: Reporter

May 31, 2011

China’s backing for Ethiopia dam riles activists

Filed under: China,Ethiopia — ethiopiantimes @ 2:13 pm
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It’s a story that truly spans the globe: Activists from all over the world, including San Francisco, are trying to stop the construction of a dam in Ethiopia financed by a Chinese bank.

The Gibe 3 Dam is in the early phases of construction on Ethiopia’s powerful Omo River, using $500 million dollars in equipment funded by the Industrial and Commercial Bank of China (ICBC). The hydroelectric dam, one of the largest construction projects in Ethiopia’s history, would regulate the flow of water along the Omo River as it courses through Ethiopia and into Kenya’s massive Lake Turkhana — a freshwater oasis in the heart of the desert.

The project has been mired in controversy since it was just a blueprint. The World Bank and the European Investment Bank financed smaller hydroelectric projects on the Omo River, but dropped consideration of the Gibe 3 Dam after viewing the environmental impact report commissioned by the Ethiopian government. Activists say the banks were scared away by the Ethiopian government’s lack of transparency regarding construction plans and the fact that the Gibe 3 will have a profound ecological impact on the region’s fragile ecosystem, from Ethiopia into Kenya.

A November 2010 hydrology report by the African Development Bank (pdf) (AfDB) noted that the Omo River is responsible for 90 percent of the water leading into Lake Turkhana. A major dam blocking the river would drain most of the lake, depriving 300,000 Kenyans of the water needed for agriculture, cattle herding and fishing. And that’s just the first concern: The activists’ extended list of fears about the dam seems as long as the Omo River itself.

Any changes to the Omo River’s natural flood pattern could affect 70 percent of the “more important” species living around Lake Turkhana, according to the AfDB report. Also, in the long term, independent Ethiopian engineers have questioned the wisdom of building such a large dam in a region with a history of strong earthquakes.

That’s not all. The area that will be flooded by the dam is home to low-level farmlands used by 300,000 Ethiopians. Food resources are already so scarce in the drought-hit border region between Kenya and Ethiopia that two of the main ethnic groups living there have resorted to violence in their bid for more land and water. In May, 70 ethnic Turkhana people from Kenya were killed when they attempted to buy food across the border in Ethiopia.

Landlocked Ethiopia is starved for electricity and also hopes to boost its revenue by exporting hydroelectricity. One section of the Kenyan government has already signed a Memorandum of Understanding to buy hydropower from the Gibe 3 dam. In a fax to CBS, the ICBC noted “relevant nations expressed interest in buying electricity from Ethiopia.”

However, Friends of Lake Turkhana, an activist group battling the dam, is taking the Kenyan government to court to fight the agreement to buy electricity without conducting a full environmental impact assessment on the dam. Now that the ICBC bank in China is offering financial support for the dam, the Kenyan opponents to the dam are widening their campaign to stop construction of the Gibe 3.

The ICBC Bank has long been silent on its reasons for supporting controversial Gibe 3 Dam, until now. Activists from Kenya and International Rivers flew to Beijing to plea their case to the ICBC, but their meeting requests were ignored. So, I contacted ICBC Bank to ask about the widespread concerns regarding ecological and safety risks of building the GIBE 3 Dam. Days later, the unsigned letter from ICBC faxed to CBS News insisted, “credit and loan for all projects conforms to environmental requirements.”

Further, the bank argues that other, smaller hydro projects on the Omo River, Gibe 1 and Gibe 2, were supported by the World Bank, the European Investment Bank and other financial institutions. The fax did not answer CBS News’ question as to why the ICBC continues to support the Gibe 3 project when other financial institutions have stepped away.

The ICBC’s annual general meeting begins Tuesday in Beijing and Hong Kong.

“Based on the serious findings of the [African Development Bank] hydrological impact report, which has now been published, ICBC should reconsider their funding of the Gibe 3 Dam,” Peter Bosshard, Policy Director at International Rivers tells CBS News.

The Chinese government is pressuring the country’s state-owned banks to invest in more projects outside of China. As Chinese banks extend their interests into international territory, activists from all over the world will likely find themselves spending more time in Beijing.

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