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China, Africa, and Oil

Author: Esther Pan - Counsel on Foreign Relations



With integrated packages of aid that lead to business opportunities and market share for Chinese companies. "One of the interesting things about doing business with China these days is that it's a full-on supplier," Economy says. "They will come in and provide everything that surrounds the development of the country." In Angola, which currently exports 25 percent of its oil production to China, Beijing has secured a major stake in future oil production with a $2 billion package of loans and aid that includes funds for Chinese companies to build railroads, schools, roads, hospitals, bridges, and offices; lay a fiber-optic network; and train Angolan telecommunications workers. Economy says China is following a very traditional path established by Europe, Japan, and the United States: offering poor countries comprehensive and exploitative trade deals combined with aid. For example, Japan after World War II paid $5 billion in war reparations to South Korea, Taiwan, and China in the form of export credits for Japanese goods and loans to be used for Japanese construction and other services, Kang says.
Is there a link between oil production and arms sales?

Selling arms to African countries helps China cement relationships with African leaders and helps offset the costs of buying oil from them. China doesn't have the same human rights concerns as the United States and European countries, experts say, so it will sell military hardware and weapons to nearly anyone. Indeed, Beijing sees Africa as a growth market for its military hardware. China's active exploration of oil sources in Africa also leads to a need to ensure security around them, experts say, which has led Beijing to send Chinese military trainers to help their African counterparts. In return, China gains important African allies in the United Nations—including Sudan, Zimbabwe, and Nigeria—for its political goals, including preventing Taiwanese independence and diverting attention from its own human rights record. A report, "China's Arms Sales: Motivations and Implications" by Daniel Byman and Roger Cliff for the RAND Corporation, says China's government exerts strong central control over its arms exports and uses them as a foreign policy tool.

Which African countries has China sold weapons to?

Between 1955 and 1977, Le Monde reports, China sold $142 million worth of military equipment to Africa, and the pace of sales has picked up significantly since then. The Congressional Research Service reports China's arms sales to Africa made up 10 percent of all conventional arms transfers to the continent between 1996 and 2003. They include:

What is China's policy toward human rights?

It is officially termed "non-interference in domestic affairs." Chinese leaders say human rights are relative, and each country should be allowed their own definition of them and timetable for reaching them. "Let's not forget, this is an authoritarian state itself," Kang says. Economy says the Chinese perspective is that, unlike the United States, they don't mix business with politics. In fact, China has argued that attempts by foreign nations to discuss democracy and human rights violate the rights of a sovereign country. Some experts say China's approach is not significantly different from how any other country pursues its interests. "The United States is highly selective about who we're moral about," Kang says. "We support Pakistan, Egypt, Saudi Arabia—huge human-rights violators—because we have other strategic interests. China's not unique in cutting deals with bad governments and providing them arms."

"China's not unique in cutting deals with bad governments and providing them arms," Kang says.

Has China had a positive impact on Africa?

Economy says many Africans are concerned over how China operates in Africa, accusing Chinese companies of underbidding local firms and not hiring Africans. International observers say the way China does business—particularly its willingness to pay bribes and attach no conditions to aid money—undermines local efforts to increase transparency and good governance and international efforts at macroeconomic reform by institutions like the World Bank and the International Monetary Fund.

On the other hand, Africa registered 5.2 percent economic growth in 2005, its highest level ever, in part because of Chinese investment. African nations are enthusiastic that Chinese demand has pushed up oil prices, says Princeton Lyman, adjunct senior fellow for Africa studies at the Council on Foreign Relations. The roads, bridges, and dams built by Chinese firms are low cost, good quality, and completed in a fraction of the time such projects usually take in Africa, experts say. The UN-supervised China-Africa Business Council, based in China, encourages much-needed trade and development with the continent. In 2004, China contributed 1,500 peacekeepers to UN missions across Africa, including Liberia. It has undertaken or contributed to construction projects in Ethiopia, Tanzania, Zambia, in addition to the countries named above. It has cancelled $10 billion in bilateral debt from African countries, sends doctors to treat Africans across the continent, and hosts thousands of African workers and students in Chinese universities and training centers. Critics say these projects are meant to build goodwill for later investment opportunities or stockpile international support for contentious political issues. Lyman says China's interest in Africa has both positive and negative effects. "It's good for the continent because it brings in a new actor who's willing to invest, but it's bad for Africa if it turns countries away from the hard work of political and economic reform," he says.

Overall, experts say, China's involvement could likely jump-start change on the continent. "This is Africa's internal problem," Kang says. "How do you build infrastructure without outside investment? And how do you have a stable government with no resources?" The roads and schools built by Chinese companies didn't exist before, so their presence is an improvement. And the infrastructure improvements help African countries secure other loans and investment opportunities, contributing to an atmosphere of development that may one day change the continent -- a welcome, even if unintended, result of China's quest to secure global energy resources.


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