AFRICANGLOBE – Over the past few decades, China’s rapid economic growth and expanding middle class has fueled an unprecedented need for resources. The economic powerhouse has focused on securing the long-term energy supplies needed to sustain its rapid industrialization, locking down sources of oil and other raw materials across the globe. As part of this effort, China has turned to Africa. Through significant investment in a continent known for political and security risks, China has helped many African countries develop their nascent oil sectors in exchange for advantageous trade deals. However, China faces growing international criticism over its controversial business practices, as well as its failure to promote good governance and human rights. At the same time, Beijing’s complex relationship with the continent has challenged its noninterference policy in the affairs of African governments.
China’s economy, which had averaged an annual growth rate of 10 percent for the last three decades until 2010, requires substantial levels of energy to sustain its momentum. Though China relies on coal for most of its energy needs, its oil consumption is second worldwide, behind the United States. Once the largest oil exporter in Asia, China became a net importer in 1993. The International Energy Agency’s World Energy Outlook 2014 (PDF) projects that China will become the world’s largest consumer of oil by the early 2030s. According to the U.S. Energy Information Administration (EIA), the country will import over 66 percent of its total oil by 2020 and 72 percent by 2040.
China imports just over half of its crude oil from the Middle East, which holds nearly 62 percent of the world’s reserves. According to the EIA, the Middle East supplied 2.9 million barrels per day, or 52 percent of China’s imported crude volume in 2013. China’s second-largest source of crude imports for that year was Africa, from which it imported 1.3 million barrels per day, or 23 percent. Its largest African suppliers of oil are Angola, Equatorial Guinea, Nigeria, the Republic of Congo, and Sudan. Smaller exporters include Algeria, Chad, Gabon, Kenya, Liberia, and Libya.
In the latter half of 2014, China took advantage of plummeting crude oil prices by filling strategic petroleum reserves to hedge against its heavy reliance on imported energy. But some experts say that China’s slowing economic growth and cutbacks in coal mining may be contributing to the country’s energy slowdown and weakening demand for oil.
While the majority of Africa’s exports to China are in oil, it also exports iron ore, metals, and other commodities, as well as a small amount of food and agricultural products. At the same time, China exports a range of machinery and transportation equipment, communications equipment, and electronics to African countries. In 2009, China surpassed the United States as Africa’s largest trade partner. According to the Chinese Ministry of Commerce, Sino-African trade reached $126.9 billion for 2010, while the trade volume between China and Africa rose 30 percent year-on-year during the first three quarters of 2011, signaling a new record high (ChinaDaily). China’s top five African trading partners (CapitalWeek) are Angola, South Africa, Sudan, Nigeria, and Egypt.
China has taken a two-pronged approach in its economic relations with Africa, American University’s Deborah Brautigam wrote in Foreign Affairs in January 2010. It has offered resource-backed development loans to oil and mineral-rich nations like Angola, and developed special trade and economic cooperation zones in several states, including Nigeria, Ethiopia, and Zambia. Special economic zones, Brautigam argues, allow African countries to “improve poor infrastructure, inadequate services, and weak institutions by focusing efforts on a limited geographical area.”
In its quest to secure resources, China engages in a form of commercial diplomacy that most other countries can’t match, CFR’s Michael Levi and Elizabeth C. Economy argue in their 2014 book By All Means Necessary. Beijing pitches vast trade, aid, and investment deals on frequent trips to resource-rich countries, and retains an almost unparalleled ability to provide low-cost financing and cheap labor for infrastructure projects, Economy explains. China has also pursued exploration and production deals in smaller, lower-visibility countries, like Gabon.
Some experts refer to China’s financing strategy as the “Angola model,” by which Beijing provides low-interest loans to countries with low credit ratings, and in turn receives favorable rights to develop oil and mining projects. In 2014, Premier Li unveiled an extra funding package totaling at least $12 billion for Africa, extending credit lines by $10 billion and boosting the China-Africa Development Fund by $2 billion. Experts say that most of China’s funding has taken the form of infrastructure financing, which is direly needed on the continent; the Chinese central government, including its state-owned banks, said it will provide $1 trillion in financing to Africa by 2025, much of which will go toward infrastructure, including transnational highways, railways, and airports.
Despite burgeoning trade relations, some African nations are beginning to push back against China’s resource development activity. Grievances range from poor compliance with safety and environmental standards to unfair business practices and the flouting of local laws. Chad, which built new roads and public buildings with Chinese financial assistance, took a hard line with China National Petroleum after the company dumped excess crude oil in ditches near the capital of N’Djamena in 2013. Gabon also withdrew an oil field permit from a subsidiary of the Beijing-based oil and gas company Sinopec in 2013 due to environmental concerns.
Local African workers have also begun to fault Chinese companies for maintaining unfair labor practices, says Ian Taylor, a professor of African politics at Scotland’s University of St. Andrews. Beijing has “less and less” ability to control these companies, he explains, thus undermining China’s official stance that says Chinese investment in Africa “win-win” situation for both sides. Zambia, in particular, has experienced an uptick in civil strife in response to an influx of Chinese companies; in 2012, the country witnessed protests and even deaths of Chinese mine managers over wages and labor practices.
Other African countries have voiced concern over China’s continued use of its own labor and equipment in its projects on the continent. In the past two decades, more than one million Chinese citizens have moved to Africa. The impression that China has exploited resources without building up local African economies and society has triggered fierce criticism from some leaders. In September 2011, Michael Sata won Zambia’s presidency largely by tapping into anti-Chinese resentments after Chinese managers shot protesters at a large coal mine in southern Zambia one year prior. In 2013, Lamido Sanusi, governor of the Central Bank of Nigeria, compared China’s presence on the continent to “a new form of imperialism.”
Since former Chinese President Jiang Zemin inaugurated China’s reengagement with Africa in 1996, China has tried to maintain a policy of noninterference in the domestic affairs of African countries, explains Donald L. Sparks in an April 2011 paper. Other experts highlight the competition between China and the United States for influence on the continent, as well as their differing approaches. “On the technical level, China views development and foreign aid as practical policy instruments to promote political friendship and economic cooperation, while the U.S. attaches clearly stated goals, stringent conditions, and strict criteria to its development programs,” writes Brookings’ Sun.
Moreover, the policy of noninterference has freed up China to sell weapons to rogue states like Sudan and Egypt, Richard Dowden argues in his 2009 book Africa: Altered States, Ordinary Miracles. St. Andrews’ Taylor says that China rarely attaches any political strings to its assistance to Africa, opening up space for Beijing to “deal quite profitably” with controversial regimes. “In short, by advancing the theme of non-interference in domestic affairs and promoting a culturally relativist notion of human rights, China has been able to appeal to numerous African leaders,” Taylor writes.