Friends and Interests: China's Distinctive Links with Africa

Africa is the most resource-laden continent, with every primary product required for industry, including (in 2005) 10 million (m) of the globe's 84m barrels per day (bpd) of oil production. Some 85 percent of new oil reserves found from 2001 to 2004 were on west/central African coasts, most of it light, sweet, highly profitable crude. Strong competition for African oil exists because 90 percent of the world's untapped conventional oil reserves are owned by states, and 75 percent of known reserves are in states that exclude or sharply limit outside investment in oil. According to estimates, world demand for oil may reach 115m bpd by 2030. In 2005 the U.S. imported 60 percent of its 20m bpd of oil, 16 percent from Africa. In 2006, however, U.S. imports of oil from Africa equaled or slightly surpassed those from the Middle East, with both at 22 percent of total imports (2.23m bpd). oil today accounts for more than 70 percent of all U.S. imports from Africa.8 In 2005 China imported 48 percent of its 7.2m bpd, with 38 percent of its imports from Africa (1.33m bpd). By 2025, its imports should reach 10.7m bpd, 75 percent of consumption. More than 60 percent of the output of Sudan, Africa's third largest oil producer, went to China and supplied 5 percent of PRC oil needs. Angola and Nigeria, the next largest producers, each sent a quarter of their production to China, and in 2006 Angola overtook Saudi Arabia as China's greatest source, supplying 15 percent of PRC oil imports. Overall, however, China consumed less than onetenth of oil exported from Africa.9

Chinese bids for resources fare well because they are packaged with investments and infrastructure loans. China preeminently invests "in longneglected infrastructure projects and hardly viable industries" {New Era 2006), and its loans, typically advanced at zero or near-zero interest, are often repaid in natural resources, if they are not canceled entirely (Brautigam 2007). In Angola, China offered $2b in aid for infrastructure projects and secured a former Shell oil block that the largest Indian company had sought (Hurst 2006:10). In Nigeria, a promised $7b in investments and rehabilitation of power stations secured for PRC firms oil areas sought by Western multinationals (Alden 8c Davies 2006). Chinese companies outbid Brazilian and French firms for a $3b iron ore project in Gabon after pledging to build a rail line, dam, and deepwater port {China's Industries 2007; South China Morning Post 2007). Its firms had $6.3b in construction contracts in 2005 (Singh 2006) and now employ many African workers. A Nigerian official has noted that "the Western world is never prepared to transfer technology-but the Chinese do, [and] while China's technology may not be as sophisticated as some Western governments', it is better to have Chinese technology than to have none at all" {Financial Times 2006a).

The notion of a specifically "Chinese model" of economic growth and foreign relations, in which trade and investment play prominent roles, is common in Africa. African analysts contrast the PRC government's massive investment in infrastructure and support services within China with their own governments' failure to provide these prerequisites for development (UNDESA 2007:105). They also compare it to Western economic practices, which are seen as exploiting "unequal and disparate exchange" to lock in underdevelopment (Williams 1985; Raffer 1987; Srkar 2001). The director of the U.K. Centre for Foreign Policy Analysis has observed that "the phenomenal growth rates in China and the fact that hundreds of millions have been lifted out of poverty is an attractive model for Africans, and not just the elderly leadership. Young, intelligent, well-educated Africans are attracted to the Chinese model, even though Beijing is not trying to spread democracy" (Moorcraft 2007; see also Zhang 2006). The president of the African Development Bank has said of the Chinese that "we can learn from them how to organize our trade policy, to move from low to middle income status, to educate our children in skills and areas that pay off in just a couple years" (World Economic Forum 2006).