China's African Safari
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Issue Vol 26.2 Apr-Jun 2011 | Date : 08 Jun , 2011

The first decade of the 21st century has seen subtle changes in Chinese foreign policy. Reasons may be many, but the principal foreign policy determinant has been the demands of the Chinese economy. In order to meet the demands of its heavy industry such as steel and chemicals, Chinese hunger for natural resources and raw material grew exponentially. Its domestic minerals and raw material proved insufficient to meet the demands of its industry Says Bill Emmott, former editor of the ‘Economist’ and author of the book, ‘Rivals’, “…. Abundant Chinese savings enabled the country to accumulate capital, and gave China’s big state owned mining and oil companies the wherewithal to invest abroad. So, as well as buying oil, iron ore and other commodities from the Middle East, Latin America, India and elsewhere, Chinese firms began to invest directly in mines and oil fields, most notably in Africa, in order in increase the supply of those products. In that way, Chinese interests came to spread well beyond its Asian neighborhood across the Indian Ocean to the Middle East and Africa; across the world to Latin America, Australia and Canada.”

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In almost every corner of Africa, there is something that interests China. The continent is rich in natural resources, which promises to keep Chinese booming, fuel hungry economy on the road. The trade between China and the world’s poorest continent totaled about $ 30 billion in the year 2008, a six fold increase since the year 2000. China buys about one third of its oil from Africa, mainly from Angola, where an $ 800 million deal to develop a new field was signed, and from Sudan, where Beijing built a 900 mile pipeline and invested at least $ 8 billion. China is spending another $ 1.2 billion on a new off shore oil field in Nigeria. Meanwhile, Beijing has acquired mines in Zambia, textile factories in Lesotho, railways in Uganda, timber in the Central African Republic, infrastructure development in the Democratic Republic of Congo and retail developments in almost every capital.

Considering Indias growing energy needs and the requirement to diversify oil imports to prevent oil from becoming a strategic weakness, India not only needs to sharpen its diplomatic skills but increasingly factor in, the movement of Chinese battleships in the IOR and the Gulf of Aden.

The reasoning behind China’s new focus on Africa is simple. If its economic boom is to be sustained, Beijing must procure more raw material and new markets for manufactured goods. China’s oil consumption is forecast to grow by at least 10 per cent annually for the foreseeable future. At this level of demand, its domestic reserves will vanish within 20 years. Therefore its thirst for overseas oil. Yet, Beijing’s options are limited. The US and Western powers have already snapped up the world’s largest oil reserves. Saudi Arabia and Iraq with 45 percent of the world’s oil between them, are in effect closed to China. So, the less developed tracts of Africa are an obvious target.

For oil, Chinese companies have made deep investments in Nigeria, Sudan and Angola. Nigeria is sub-Saharan Africa’s largest oil producer and the fifth largest in OPEC after Saudi Arabia, Venezuela, Iran and the UAE. Sudan has total reserves at 5 billion barrels and estimated proven reserves at 700 million barrels with new plans to explore oil in North West Sudan, the Blue Nile basin in South East Sudan and the Red Sea area in Eastern Sudan. With reserves of over seven billion barrels, reputed to be larger than that of Kuwait, it is the most successful non – OPEC country in terms of oil exploration.

Between 2003 and 2008, Chinese direct investment skyrocketed from $ 75 million to $ 5.5 billion in Africa. China is the number one foreign investor in Sudan besides having huge investments in Algeria, Zambia, Lesotho, Ethiopia, Nigeria, Tonga and the Solomon Islands.

Is it all swan song, then? Many countries in these parts of the world initially welcomed the Chinese in every sector from i.e. tapping natural resources to building infrastructure because China, unlike the West, does not tie its aid or investments to human rights. Nevertheless bitterness among local populations is rising against the growing Chinese presence in these countries.

Sparked by high unemployment, 100 Algerian and Chinese migrant workers clashed in the capital Algiers in the year 2010. Nine Chinese oil workers in Sudan were kidnapped by an unknown group and five among then were killed. In Zambia 500 employees at a copper mine went on strike and damaged a Chinese dormitory. Chinese managers were taken hostage in Lesotho, street vendors in Maseru destroyed Chinese shops. In Ethiopia, ethnic Somali rebels killed nine Chinese oil workers and kidnapped seven more. In Tonga in the year 2006, pro-democracy protesters damaged 30 Chinese owned shops. In Solomon Islands, upset at the election of a new Prime Minister accused of using Chinese money to buy votes, demonstrators destroyed the capitals’ China town.So, what’s happening? If China is pumping so much money into these regions, why should riots happen? Why is there a groundswell of resentment against Chinese presence? In an article ‘The World of China Inc’ in ‘The Time’ magazine, Hannah Beech/Ramu have explained, “when China began its global investment push in the early part of this century, the flood of new money was welcomed, particularly in those parts of Asia, Africa and America that felt abandoned by West, China’s promise not to politicize aid and investment by attaching pesky conditions like improved human rights pleased many governments…in exchange for the natural resources needed to feed China’s economic engine, Beijing began an assiduous campaign to win foreign hearts and minds by financing stadiums, hospitals and lavish government offices.

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The views expressed are of the author and do not necessarily represent the opinions or policies of the Indian Defence Review.

About the Author

Rohit Singh

Rohit Singh is a Research Assistant at the Center for Land Warfare Studies (CLAWS)

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