PBS: Escaping Eritrea … [Read More...] about ካብ ውሽጢ ቤት ማእሰርታት ኤርትራ
“Yellow cat, black cat, as long as it catches mice, it is a good cat.” Deng Xiaoping (circa 1962)
This article seeks to specifically focus on and explore a key facet of China’s interest in Africa’s resources – oil. In doing so, some of the main implications for Africa and for the West of China’s oil diplomacy are unpacked and discussed. It is argued that Chinese oil diplomacy in Africa has two main goals: in the short-term secure oil supplies to help feed growing domestic demand back in China; and in the long-term position China as a global player in the international oil market. Energetically pursuing these aims whilst playing on African leaders’ historic suspicion of Western intentions is how Beijing generally engages in its oil diplomacy on the continent.
“Non-interference” and Sino-African diplomacy: China has long believed African countries to be diplomatically important, a position that dates back to the late 1950s and early 1960s. However, in contemporary times, Chinese interest in Africa was reignited by events surrounding Tienanmen Square in June 1989, when African leaders were quick to rush to support Beijing in the face of intense criticism by the West. This rediscovery of its African friends had followed a decade of neglect of Africa by China as Beijing embarked on its Socialist Modernization project.
However, post-Tienanmen Square China remembered that Africa was a very useful support constituency if and when Beijing was in dispute with other global actors – and also as a site where Beijing could continue to marginalize the Taiwanese. At the same time, China’s renewed interest in Africa coincided with the newfound attention of the West in promoting liberal democracy and human rights. Indeed, as the Cold War came to an end, the so-called Third Wave of Democracy swept across Africa, supported (albeit unevenly) by the developed world. This trend however threatened the entrenched position of incumbent presidents across the continent. As Philip Snow has pointed out, both Chinese and African elites like to posture themselves as having experienced – and continuing to face – common enemies, namely imperialism and “neo-imperialism”.
This translates into a deep suspicion by many African leaders of criticism of their regimes on the grounds of “Western-centric” norms of human rights and liberal democracy, something which is instrumentalized whenever domestic governance records are criticized. China taps into this, asserting that human rights such as “economic rights” and “rights of subsistence” are the main priority of developing nations and take precedence over personal, individual rights as conceptualized in the West. It is a claim shared by many African leaders. He Wenping, director of the African Studies Section at the Chinese Academy of Social Sciences in Beijing, has equally claimed that “We [China] don’t believe that human rights should stand above sovereignty…We have a different view on this, and African countries share this view”. The Chinese Ambassador to Eritrea echoes such views, asserting that governments can never have the right to criticize other governments. Importantly, non-interference in state sovereignty and freedom from “hegemony” has been a theme of Chinese foreign policy since the Five Principles of Peaceful Co-existence, formulated in the 1950s as the basis of Beijing’s foreign relations.
Consequently, as a Chinese embassy press statement puts it, “[China and Africa] support each other in international affairs, especially on major issues such as human rights, safeguard the legitimate rights of developing countries and make efforts to promote the establishment of a new, just and rational international political and economic order”. Much of this is tied to the long-held stance by Beijing that it is the de facto leader of the developing world. This posture has been cast within the rubric that whilst “Africa [is] the continent with the largest number of developing countries”, China is “the largest developing country in the world”. China’s ranking of its own Five Principle of Peaceful Coexistence on an equal footing with the Charter of the African Union – and even the Charter of the United Nations – is an example of the way in which Beijing seeks to court Africa within the broader framework of global politics, whilst at the same time asserting its leadership claims.
Paradoxically, as China increasingly integrates itself into the global economy and starts to tentatively play by essentially Western rules (as exemplified by its membership of the World Trade Organization), China has sought to strengthen political ties with African countries, exemplified by the establishment of the China-Africa Cooperation Forum (CACF) in 2000. These links however are in part being constructed to be deployed against norms that Beijing views as transgressing Chinese sensibilities, even whilst China engages on a huge expansion of its economic and political engagement globally. This irony reflects the overall tension in Chinese foreign policy of pursuing both engagement and a critical stance towards certain norms that underpin the existing global order. It has led to difficulties for Beijing as it has increasingly been accused of turning a blind eye to autocracy and corruption (a charge that could, admittedly, be leveled at many external actors involved in Africa) in its quest for resources.
Because of the exponential increase in China’s oil interests in Africa, questions are increasingly being asked about the nature of this engagement, both specifically in Africa and elsewhere. Importantly, whilst Sino-Africa relations have an historic basis and one built on the principle of “noninterference”, the economic impulse is now arguably dominant. This is not contradictory, as the ideological cover of state sovereignty is utilized by Beijing as part and parcel of its oil diplomacy and in the construction of its diplomatic ties. It is, after all, a motif that is highly attractive to many African leaders. However, China’s particular focus on African oil (albeit not to the exclusion of other resources), coupled with its stated disinterest in the internal affairs of other countries, is potentially problematic. Difficulties associated with China’s emphasis on state sovereignty are discussed later but at this point the character of the Chinese oil industry and its interests in Africa need to discussed.
China’s oil industry: China’s oil industry has recently experienced significant restructuring as China’s oil needs have become ever more pressing. The Chinese government rationalized most state-owned fuel operations in 1998, placing them under the regulatory oversight of the State Energy Administration. In the oil sector specifically, Beijing established two firms, namely the China National Petroleum Corporation (CNPC) and the China Petrochemical Corporation (Sinopec). In doing so, both CNPC and Sinopec emerged as two vertically integrated oil and petrochemical corporations with interests that stretched across the whole value chain. The new CNPC, which had been mostly involved in exploration of oil and gas fields, production and the upstream aspect of the oil business, emerged to account for 66 per cent of both China’s oil and gas output, and 42 per cent of Beijing’s refining capacity. Sinopec, which had formerly focused on refining and delivery, made up 23 per cent of oil output, 11 per cent of gas output and 54 per cent of refining capacity. Both of the two groups are now major global players in the world oil industry and both companies are more or less involved in all levels of exploration and production. The China National Offshore Oil Corporation (CNOOC), incorporated in 1982, operates offshore exploration and production.
All three companies continue to be fundamentally state-owned, although the administrative functions of CNPC and Sinopec were divided from the corporations” business management task. The State Petroleum and Chemical Industry Bureau under the State Economic and Trade Commission was established to assume the administration functions of CNPC and Sinopec. Consequently, it is likely that the corporations function in accordance with China’s national strategy regarding resources and foreign policy – a policy that is established by the political leadership in Beijing in cooperation with business leaders running state-owned corporations. Indeed, the China Institute for International Studies, a state think-tank, regularly brings together academics, business leaders, the military and the government to devise strategies for the country, so that “partly on these people’s advice, Beijing has been encouraging representatives of state-controlled companies to secure exploration and supply agreements with states that produce oil, gas, and other resources”.
The strategy chosen is basically to acquire foreign energy resources via long-term contracts as well as purchasing overseas assets in the energy industry. This policy is based on the desire to circumvent an over-reliance on the global oil market through either actually acquiring major stakes in Africa’s oilfields or safeguarding access. Africa is a prime site because “China confronts foreign competition. Chinese companies must go places for oil where American and European companies are not present”. Arguably, Chinese companies saw the opportunities in Africa before other actors – who are now expressing anxiety and concern over the scale of China’s activities on the continent. This is compounded by the nature of Chinese corporations. Because China’s oil companies are state-owned, China is able to do this even if it means outbidding competitors in major contracts awarded by African governments and paying over the odds. China takes the long-term view vis-à-vis energy security, rather than the short-term view of private Western companies – a view necessitated by considerations of profits and shareholders.
Having said that, China’s quest for oil overseas may have less to do with Beijing’s energy security than other long-term considerations. Even given China’s huge increase in its overseas oil production activities, Beijing’s foreign oil diplomacy will almost certainly never be enough to fulfill the country’s massively increasing demand. Rather, the recent upsurge in Chinese oil diplomacy may be linked to Chinese strategists at the national level who may well first and foremost be paying attention to the long-term goal of being in charge of oil resources at their source in a strategy to manipulate future prices. This would be not simply as a consumer of oil – although this would be of increasing importance – but also as an emerging producer of note, particularly if and when China’s offshore oil discoveries come online. As part of the immediate strategy, Sinopec and CNPC in particular have been active in buying operating rights overseas. Chinese expansion into oil operations overseas has subsequently become obvious and more and more aggressive, with Chinese oil companies now having a presence in places as diverse as Canada, Peru and Sudan. One way by which this policy has been cemented is to use what China refers to as “special relationships” or its “win-win” China-Africa cooperation policy.
Part of this is a somewhat unquestioning stance regarding norms relating to transparency and human rights. That this is problematic for the African continent will be detailed below. Returning to China’s energy milieu, China’s exceptionally robust economic growth over the last twenty years has stimulated a huge upsurge in its demand for oil – between 1995 and 2005 China’s oil consumption doubled to 6.8 million barrels per day. In 1993, China became a net importer of oil and oil will be the only feasible primary fuel for the foreseeable future that will be in the position to fulfill China’s growing needs regarding both transportation and industry. Since it became a net oil importer, China’s resource diplomacy and hunt for oil supplies has escalated massively – reflected in Beijing’s increased presence in Africa’s oil industry.
In 2003, China surpassed Japan to become the world’s second biggest consumer of petroleum products after the United States. Problematically, in 2004, China’s oil consumption grew by 15 per cent whilst its output only rose by 2 per cent. Previously, China’s consumption in 2004 was a 16 per cent increase over what it was in 2003. The pattern is clear: an exponential increase in China’s demand for oil. Indeed, China is projected to rely on imports for forty-five per cent of its oil use by 2010. This has massive implications for the global oil industry given that the International Energy Agency predicts that by 2030 Chinese oil imports will equal current imports by the United States; China’s demand for oil is projected to increase by 130 per cent to 12.8 million barrels per day by 2025, according to the US Energy Information Administration. As the Administration puts it, “As the source of around 40 per cent of world oil demand growth over the past four years, with year-on-year growth of 1.0 million bbl/d [barrels a day] in 2004, Chinese oil demand is a key factor in world oil markets.
Indeed, if China’s imports of oil rise, as projected, from 4 million barrels a day today to 7 million barrels a day in 2020, to 8 million barrels a day in 2025, and to 11 million barrels a day in 2030, the consequence of such a monumental increase will drastically affect the availability of oil and the cost of crude oil. Since around 1995 China has pursued an “outward-looking oil economy”, but, as one analyst puts it, “China’s quest for energy security is more than simple economics. It is about China’s overall development strategy; the direction of China’s modernization program [and] what kind of China is emerging as a world power”. This is a fundamental question that Beijing’s policymakers need to address.
China’s oil safari in Africa: Africa is seen by both the Chinese government and by Chinese companies to be rich in natural resources, particularly in crude oil, non-ferrous metals and fisheries. In contrast to the past heady days of Maoist “solidarity”, China’s economic dealings with most African countries are today based on a cool evaluation of their perceived commercial potential. Indeed, it is China’s rapidly developing oil requirements that have helped propel Sino-African trade in recent years. Beijing also sees Africa as playing a greater role in future world politics. A Chinese commentary asserted that “as more African countries improve political stability and make headway in economic growth, the continent’s nations will have more say in international affairs”. Beijing seems to see this as to their advantage as it is repeatedly asserted that China and Africa share “identical or similar opinions on many major international affairs as well as common interests”. Indeed, it has become common amongst Chinese policy speeches to emphasize the commonality of experiences that link China and Africa together, including perceptions of historical oppression by the West and the similar levels of economic development.
This has been the rhetorical theme for a whole raft of new contracts signed between China and Africa in the oil industry. A brief listing of some of the more recent ones gives a flavor of the extent to which Chinese oil diplomacy is picking up speed in Africa. In 2002 Sinopec signed a contract for $525 million to develop the Zarzaitine oil field in Algeria. In 2003 CNPC purchased a number of Algerian refineries for $350 million and signed a deal to explore for oil in two blocks. PetroChina also signed a contract with Algeria’s Hydrogen Carbide to jointly develop oilfields and construct a refinery. In 2004 TotalGabon signed a contract with Sinopec under which Gabonese crude oil will be sold to China. In 2005 Angola was given a $2 billion loan from China in exchange for oil deals (China added another $1 billion to this loan in March 2006). In the same year, China and Nigeria signed an $800 million crude oil sale deal between PetroChina and the Nigerian National Petroleum Corporation to supply 30,000 barrels of crude oil per day to China. It was also announced that the Chinese were interested in carrying out exploitation of manganese, oil and gold in the Ivory Coast, where Sinopec already has investments in an oil field off the coast, with 27per cent of the block. In 2006 CNOOC agreed to pay $2.3 billion for a stake in a Nigerian oil and gas field. An offshore exploration deal was signed with Kenya, allowing CNOOC to explore in six blocks covering 44,500 sq. miles in the north and south of the country. Beijing also struck a $4 billion deal for drilling licenses in Nigeria whilst Angola’s Sonangol announced that Sinopec had taken up a 40 per cent stake in the lucrative oil Block 18 after suggesting a $1.1 billion government “signature bonus” out of a total investment amounting to more than $1.4 billion.
Chinese oil companies were also reported to have signed contracts to begin offshore oil exploration and production with Congo-Brazzaville and have begun oil exploration in northern Namibia and looking into the establishment of an oil refinery. Nigeria also announced that it would give the first right of refusal to CNPC on four oil exploration blocks in exchange for a commitment to invest $4 billion in infrastructure. The deal involves China buying a controlling stake in Nigeria’s 110,000 barrel-a-day Kaduna oil refinery and building a railroad and power stations. The year 2006 also saw Zhongyuan Petroleum Company start exploratory drilling in the Gambella basin, western Ethiopia, Chinese oil companies investigate forming upstream joint ventures in Madagascar to exploit newly discovered reserves on the island, and Sinopec and CNPC team up to acquire drilling rights to an oilfield in Sudan for about $600 million.
Clearly, Chinese energy interests in Africa are growing dramatically. However, questions have been more and more asked about China’s tactics and strategies in its quest for resources in Africa. The no-questions-asked policy is indeed coming under greater pressure from observers both external and internal to Africa. And Chinese responses have been getting both more defensive and also, contradictory. Thus for instance on the one hand Wang Yingping of the China Institute of International Studies will assert that “Chinese businesses pay greater attention to protecting the environment when building factories and exploring for Africa’s rich reserves in oil, ore and non-ferrous metals”. Yet an official Chinese publication quoted, without comment, the assertion by Sierra Leone’s Ambassador to China that “The Chinese just come and do it. They don’t hold meetings about environmental impact assessments, human rights, bad governance and good governance. I’m not saying it is right, just that Chinese investment is succeeding because they don’t set high benchmarks”. This is now a common cause for complaint with Sierra Leone. It is the failure to set high benchmarks, particularly regarding transparency and human rights that China’s oil diplomacy in Africa stands accused of – a subject we now turn to.
“There are no rogue states”: Whilst Western public diplomacy has recently focused on “rogue states”, “axes of evil” and “arcs of extremism”, Beijing has a very different take on such matters. According to the Chinese Ambassador to Eritrea, “There are no rogue states. China has been labeled this in the past and other governments should not criticize”. Yet within Africa, China has been increasingly criticized. For instance, a South African newspaper noted that “China’s no-strings-attached buy-in to major oil producers, such as Angola, will undermine efforts by Western governments to pressure them to open their oil books to public scrutiny”. Two countries in particular stand out as examples where Beijing has intimate dealings, but where standards of good governance (by any criterion) are woefully inadequate: Angola and Sudan.
Angola has been described as a country that has moved from “Afro-Stalinism” to “petro-diamond capitalism”, where patronage and corruption reign supreme. International agencies say as much as $4 billion in oil revenues – equivalent to 10 percent of GDP – has been lost to graft over the past five years. According to one observer: “Lack of transparency remains the norm for all key financial accounts, such as those used for oil revenues and diamond revenues and those of the National Bank of Angola and the national treasury. Parliament faithfully votes each year to approve a budget in which a substantial portion of the monies received by the Angolan state simply does not appear. The official budget is thus a document which bears no relationship to reality, and in any case it is just not implemented for the most part.”
This does not seem to be a problem for Beijing. Indeed, the Chinese have taken advantage of this milieu – and the conflict that this has generated with international creditors. Currently, Angola is China’s second largest trading partner in Africa. In 2004, bilateral trade totaled $ 4.9 billion, representing more than a 113 per cent increase from 2003. Chinese companies continue to look for secure oil deliveries and Angola, as sub-Saharan Africa’s second largest oil producer, is central to this policy. Thus, during a recent visit by Vice Premier Zeng Peiyang, a total of nine cooperation agreements with Angola were signed, three of which related to oil.
During the visit Zeng Peiyang agreed to provide Angola with more development aid, providing Angola with approximately $6.3 million in interest free loans. The elites in Luanda (an oppressive, dictatorial regime by any standards) are deeply appreciative of China’s “non-interference” stance. Over the last couple of years, Angola’s government, in need of reconstruction funds after the civil war, has been in the midst of negotiating a new loan with the International Monetary Fund (IMF). Because of Luanda’s malgovernance, the IMF was determined to include transparency measures to curb corruption and improve economic management.
However, as the IMF pressed for agreement, the Angolan government suddenly stopped negotiations. The reason for this was that Luanda had received a counter-offer of a $2 billion loan from China’s export-credit agency, Exim Bank. The deal came with an interest rate repayment of 1.5 per cent over 17 years and was tied to an agreement to at first supply 10,000 barrels per day of crude oil, to increase later to 40,000 barrels per day, as well as the award of substantial construction contracts. This provoked consternation within Angola’s nascent indigenous business sector as, Angolan economist José Cerqueira put it: “There is a condition in the loan that 30 per cent will be subcontracted to Angolan firms, but that still leaves 70 per cent which will not”. Angolan businessmen are very worried about this, because they don’t get the business, and the construction sector is one in which Angolans hope they can find work’. Thus the real cost of the loan is higher than that suggested by the published rates as non-Chinese suppliers are excluded, which will negatively affect the prices of goods and services imports. To be fair though, the real cost should still be below the rates at which Angola was previously borrowing from other sources. But perhaps more critically, none of the IMF’s conditionalities regarding corruption or graft were included in the loan’s details, enabling Luanda to overcome the refusal by Western donors to bankroll a Donor’s Conference until Angola had reached agreement with the IMF and concluded a Poverty Reduction Strategy Paper.
Responding to the news, the Angolan Embassy in London stated that the deal “… cannot be matched on the current international financial market, which imposes conditions on developing countries that are nearly always unbearable and sometimes even politically unacceptable. Indeed: It is a well-known fact that many developed countries make the support and aid they give conditional on the recurrent issue of transparency. In the case of the agreement recently signed with the Chinese bank, no humiliating conditions were imposed on Angola. The agreement therefore greatly surpasses the contractual framework imposed on the Angolan government by European and traditional markets and opens up a practical means of sustained and mutually advantageous cooperation with one of the world economies with the highest growth rate”.
The Angolan Ambassador in China later called Beijing “a true friend of Africa” and crowed that “Africa can [now] develop by its own effort with China’s help…without any political conditions”. In other words, the regime in Luanda was flagging up its great satisfaction that an alternative source of resources had been identified, one that did not demand the “humiliating conditions” associated with IMF loans. However, Douglas Steinberg, Angola country director for the humanitarian NGO, CARE noted that “When I hear of this big Chinese loan [I think] it distorts the whole process and gives a lot more flexibility for Angola not to comply with the conditions for other deals…It allows the government to escape…transparency”.
In the past international organizations such as the World Bank have been criticized for making loans to countries in need conditional upon non-negotiable demands. Now the situation is reversed, with China granting unconditional, instant credits that encourage white elephant projects, without concern for financial transparency. Yet on the other hand, China is investing much needed resources into Angola’s infrastructure and is widely seen as the “savior” of the country in terms of recovery and post-conflict development. The Eximbank loan will rehabilitate roads and railways, especially in Benguela, which is essential to Angola’s mineral exports. Angola has a desperate need for financing to carry out an extensive program of infrastructure investments as a precondition to the reintegration of the country, urgently required in order to kick-start the economy, especially in the agricultural sector. Alternative sources of funding have been stymied by Paris Club rules; not so China’s.
Another example of China’s involvement in an oil-rich nation which has attracted controversy is Sudan. China is now Sudan’s largest investor, with an investment estimated at $4 billion. Apart from the governance and human rights issues in Khartoum, Beijing’s weapons exporting policy and its involvement in Sudan’s long-running civil war have been particularly criticized. It should be noted that China is the only major arms exporting power that has not entered into any multilateral agreement setting out principles, such as respect for human rights, to guide arms export licensing decisions. Instead, Chinese actors have pursued a policy that is entirely based on narrow economic interests and have been keen to supply the Sudanese government with fighter aircraft and an assortment of weaponry. Apart from the profits accrued from these arms sales, the policy helps consolidate and protect Chinese shares in the exploitation of Sudan’s oil reserves. Reports say that the Sudan air force is equipped with $100 million worth of Shenyang fighter planes, including a dozen supersonic F-7 jets.
The motivation for such supplies is simple. The state-owned Chinese company CNPC owns the largest share (i.e. forty per cent) in Sudan’s largest oil venture, the Greater Nile Petroleum Operating Company. CNPC’s equity oil from the project is around 150,000 barrels a day. The Sino-Sudanese oilfield project covers 50,000 square miles in the southern non-Muslim [now independent country of South Sudan] region of the country and is expected to produce 15 million tons of crude oil annually. With proven reserves of 220 million tons, the project is amongst the largest China has undertaken overseas. During the civil war Sudanese government forces, armed with Chinese weapons, used CNPC facilities as a base from which to attack and dislodge southerners in the vicinity of the new oil fields. Certainly, Khartoum used hard currency generated by Chinese investment in oilfields to finance its ethnic cleansing of non-Muslim insurgents and civilians in the southern part of the country. Consequently, China has been strongly criticized by various non-governmental organizations, with Amnesty International stating in June 2006 that “China has transferred military, security and police equipment to armed forces and law enforcement agencies in countries where these arms are used for persistent and systematic violations of human rights”.
China, for its part, deployed its “alternative” reading of human rights to block United Nations action in the country. For instance, the Chinese ambassador to Sudan, Deng Shao Zin, openly stated that Beijing was “opposed to any intervention by the United Nations in the internal affairs of Sudan under the pretext of human rights violations”. Thus whilst during the late 1980s and early 1990s, Western oil companies were forced to scale down operations in Sudan due to human rights violations and the civil war, China stepped in to displace Western corporations. Consequently, CNPC has been a partner in a consortium developing oil production in Sudan since the mid-1990s and CNPC’s construction wing helped build the 930-mile pipeline to the Red Sea and built an oil refinery close to Khartoum. The Petroleum Engineering Construction Group is at present constructing a $215 million export tanker terminal at Port Sudan as well as a pipeline from the oilfields to the port.
It should be said that Beijing has welcomed the recent peace agreement signed in early 2005 between the north and south and China has committed around 200 troops for UNMIS, the UN mission to oversee the cease-fire. Given that oil agreements signed by Khartoum will be respected, this is no surprise. As has been mentioned, Beijing has used its position at the United Nations to head off Western pressure on Khartoum – lately over human rights abuses in Darfur. In mitigation, China maintains that it is working hard to encourage the Sudanese government to resolve the conflict. But United Nations investigators have found most of the small arms in the conflict in Darfur are Chinese manufactured, despite an arms ban within the region. Amnesty International has reported that China provided hundreds of military trucks to Sudan in 2004 at the height of the three-year-old Darfur conflict and that the Sudanese army and the Janjaweed militia had used these vehicles for travel and for transporting people for execution. China in turn rejects such charges on the grounds that other countries similarly export arms and equipment. As Chinese Deputy Foreign Minister Zhou Wenzhong was quoted as saying, “Business is business. We try to separate politics from business…I think the internal situation in the Sudan is an internal affair”.
China’s approach: Any analysis of China’s oil diplomacy in Africa needs to be balanced and avoid the hyperbole that has characterized some accounts. In the short-term, China’s trade and investment with Africa is of assistance to the development of the continent if for no other reason than that investment is not really forthcoming otherwise. China’s investment in Africa’s crumbling infrastructure is needed and is welcomed by most. Throughout Africa, Chinese companies are occupied in building hospitals, dams, government offices and stadiums and the refurbishment of facilities abandoned by Western companies. In addition, China’s demand for energy resources has inflated prices, bringing a windfall to African states’ income. Partly as a result of China’s interest – particularly in oil – the continent’s growth rate has increased, touching 4.5 per cent in 2004. Of course, what African leaders do with this sudden influx of receipts is another issue. Indeed, the big question is how do governments engage with this phenomenon and utilize the increased engagement by China to benefit the ordinary people.
Here, China’s stance of “non-interference” and a studied disinterest in where the money goes is not particularly helpful. But certainly in the short-term China’s increased engagement with Africa is beneficial in the sense that it is providing investment where little was previously forthcoming. Development may be stimulated by such activities and the Chinese provide what may be seen as a low-cost developmental solution to many African nations. But it is when one looks at the long-term trajectory that concerns mount.
Firstly, reliance upon oil and other commodities is deeply problematic for African nations wishing to avoid the typical resource curses that tend to accompany over-dependence on one particular commodity and/or move beyond being suppliers of primary products. “One risk is that the commodity boom might give rise to a sense of complacency, which might prevent governments from undertaking the necessary measures to make growth sustainable in the medium term (i.e. investment in human capital and infrastructure, institutional reform, etc.)’. Over-reliance on commodities such as oil threatens to make African nations even more vulnerable to negative price shocks. Furthermore, if receipts accrue from oil exports to China there is a very real temptation for the local elites not to diversify their economies.
As mentioned earlier, this is a problem not specific to Chinese involvement. But the type of increased commodity exports and rising investment inflows into Africa stimulated by China’s commodity demands have a tendency to fuel currency over valuation, which undermines the competitive edge of export-oriented manufacturing sectors. This potential danger may be worsened by Beijing’s propensity to keep downstream and processing activities within China whilst only generally importing pure raw materials. In this sense, a huge increase in Chinese interest in Africa’s oil threatens to only deepen Africa’s dependency. Of equal concern however, is China’s relatively casual stance towards the liberal norms of human rights and democracy. In China’s defense it might be averred that the strategies adopted by an incoming power, seeking to grab opportunities wherever it can, and those of an established power, looking to protect its investments in an unstable environment, are intrinsically different and account for some of China’s actions. But the key question is how long is it going to take for Beijing to move from one stance to the other? Beijing’s current attitude regarding its supply of weapons to regimes such as Sudan is that it is an internal matter for that sovereign state and that weaponry strengthens the state, thereby stabilizing the political environment in which to do business.
But most observers view such transfers as profoundly destabilizing, particularly as African governments and armies are rarely in full control of the weapons they receive, as well as the more general point that providing arms to oppressive regimes is inherently anti-developmental. For how long China can maintain its position predicated on “non-interference” is a crucial question, particularly as China becomes more and more integrated into the global order and when on the very same day as the Dutch government were suspending nearly $150 million in aid to Kenya because of longstanding concerns over corruption, China was busy securing an important oil exploration agreement with that same country. A telling illustration of the difference in approaches between the West and China vis-à-vis malgovernance on the continent.
Currently, Beijing does not seem to realize that corruption and political instability sabotage the long-term possibilities of sustained Sino-African economic links and also help maintain the situation where Africa remains at the bottom of the global hierarchy, plagued by dictators and human rights abusers. Whilst a certain type of African leader is deeply appreciative of such a friend, it is doubtful that the average African shares the same sentiments. Problematically, as a Kenyan report put it: China has an Africa policy. Africa doesn’t have a China policy, only a Beijing-controlled forum in which Mandarins figure out which country to take a sweet shot at. China talks of mutual trust…The danger is that China will politely rip off Africa, just as the West did (The Nation, Nairobi, June 12, 2006).
Policies have consequences. Equally of note is China’s stance towards sovereignty, which may well come back to haunt China in the long-term. It is true that at the moment the notion of sovereignty provides a useful common ground between China and regimes such as Angola and Sudan in facilitating co-operation on oil matters. Yet at the same time it is a potentially awkward doctrine for a very large and powerful state such as China to espouse in its dealings with relatively poor and weak states. After all, what are the implications for China’s stance on non-interference in domestic affairs if a “sovereign” African state chooses to expropriate resources and materials owned by a Chinese corporation? Or if a Chinese corporation is punished for environmental damage or mistreating local employees?
This potential problem may be illustrated with reference to a non-oil producing state, such as Eritrea, where the government is intensely sensitive to any notion that its sovereignty is being encroached upon. One might think that such a state would be a natural ally of Beijing’s. Yet, in fact, dealing with such an entity is highly problematic as even the Chinese think that the government is untrustworthy and prone to act in unpredictable ways. Despite the untapped mineral riches of Eritrea, whose future possibilities seemingly drive Chinese interest in the country, there is a real issue whether or not Beijing can sustain the relationship as the ability to effectively work in such a state is compromised by its “sovereignty” i.e. erratic policy decisions made with little or no regard for external opinion. And because of this, China has no real influence over Asmara.
Ian Taylor is Professor in International Relations and African Politics at St Andrews and also Chair Professor in the School of International Studies, Focusing largely on sub-Saharan Africa (SSA). He has also studied China’s relations with Africa, producing a large body of work on this topic, conducted since 1994 and based on extensive fieldwork across Africa and in China. He has conducted fieldwork/research in Botswana, Cameroon, Cape Verde, China, D.R. Congo, Eritrea, Ethiopia, The Gambia, Ghana, India, Lesotho, Liberia, Mauritius, Mozambique, Namibia, Nigeria, Rwanda, Senegal, Sierra Leone, Somaliland, South Africa, South Sudan, Sudan, Tanzania, Uganda, United States of America, Zambia and Zimbabwe.