China in Africa

Summary: Africa, particularly sub-Saharan Africa, has long been a source of resources, including petroleum, for industrialized European countries. In the twenty-first century, China joined in the race to make deals to extract mineral resources, including oil. As with the Europeans before them, the Chinese adjusted their political and diplomatic policies to align with these economic interests. In some cases, such as West African oil fields, China emerged as a prospective competitor with long-established Western oil firms. In other cases, China emerged as a new supplier of loans, labor, and materials to build transportation systems and infrastructure for mineral extraction. According to the Wall Street Journal: "China is now the continent's largest trading partner, edging out the U.S. Last year, its trade with Africa reached $114 billion, up from $10 billion in 2000 and $1 billion in 1980, according to China's State Council, or cabinet." By the 2020s, China became a dominant force on the African continent, developing political and commercial rivalries with the US. The Biden Administration addressed concerns about China’s continued dominance, stating the country had to be watched as it advanced its own commercial and geopolitical interests. By the 2020s, China increased its role in African infrastructure and resource extraction and became the continent's largest two-way trading partner.

In-Depth Overview

China's rapid emergence as a leading player on the world's economic stage also made it a leading player in the competition for natural resources from Africa, especially oil. This is a role that Western European nations - and, to a lesser extent, the United States - had played since before the nineteenth century. While driven by economics, this competition also has important political and diplomatic implications. In addition, China claims an increasing competitive presence on other continents where it hopes to gain concessions to extract oil and other minerals needed to support its manufacturing base at home - this is especially true of South America. However, nowhere has Beijing emerged as a bigger player than in Africa.

China became a net oil importer in 1993. Fifteen years later, it was importing approximately one-third of its oil, even as oil demand was soaring due to economic growth and the introduction of private automobiles as a fast-growing means of transportation. China has become the biggest net importer of oil and remained so in the 2020s.

As early as 2005, David Zweig and Bi Jianhai wrote in Foreign Affairs: "Chinese foreign policy is now driven by China's unprecedented need for resources. In exchange for access to oil and other raw materials to fuel its booming economy, Beijing has boosted its bilateral relations with resource-rich states, sometimes striking deals with rogue governments or treading on U.S. turf."

European and American companies already control the easiest and biggest supplies of African oil, notably those in Angola and Nigeria. China, being a relative late-comer to the race for African resources, has consequently been forced into forging agreements with smaller suppliers and/or countries whose resources have not yet been proven. In 2014, China accounted for about 43 percent of total oil consumption growth in the world. By 2023, China made up 40 percent of the total rise in global oil demand. China's use of oil and other energy sources is expected to increase as its economic growth outpaces increases in domestic oil production. Plans to ensure this flow have, in turn, put China into political relationships with some African leaders widely denounced by the West for violating human rights.

Using subsidized loans, China has become a major investor in African economies. This is a different approach than the Western world takes, with most investments going directly to non-governmental organizations (NGOs). China, however, prefers to work directly with the governments to create "investment-friendly" zones where security is heightened and stability is "encouraged." Furthermore, China frequently offers education to government leaders about subjects related to successful government-run businesses.

In the early 2010s, more than half of all loans by China's Import-Export Bank were given to thirty-six African countries. By 2021, China had developed trade relationships with almost all African countries. Projects tend to be concentrated in the area of resource extraction - either transportation systems or actual mining facilities. Unlike projects begun during the Cold War era under Mao Tse-tung, most contemporary economic deals involving China are carried out by private companies, sometimes competing with one another for projects. In these deals, the government supplies financing and (where needed) political support to international bodies such as the Security Council. A significant portion of Chinese loans to Africa take the form of barter: skilled Chinese labor and materials in exchange for African resources sent back to China.

In the early 2000s, five countries accounted for nearly all of China's imports from Africa: Sudan, Angola, Equatorial Guinea, Nigeria, and the Republic of Congo. In just one year, 2002-2003, China's imports doubled. Between 2003 and 2007, it increased nearly four-fold, from $18.5 billion to $73 billion. In 2008, that figure had risen to $107 billion and increased a further 77. By 2014, imports from sub-Saharan African countries totaled approximately $180 billion. In November 2009, Chinese Prime Minister Wen Jiabao led a delegation representing more than 300 Chinese companies at which he promised $10 billion in subsidized loans carrying lower interest rates and longer repayment terms than market rates over the next three years. By the 2020s, China’s main import countries in Africa were Nigeria, South Africa, Egypt, Ghana, and Kenya.

Western powers, notably the United States, have not entirely accepted China's policies with equanimity. Reflecting the competitive and economic-political nature of China's relations in Africa, the International Monetary Fund objected to plans by the Democratic Republic of Congo to use Chinese investment funds and threatened to cut off IMF lines of credit in 2009. The IMF is often thought to reflect the attitudes of the United States.

Sudan. A substantial portion of China's growth in trade with Africa came with Sudan, notably in the form of oil imports. At the same time, China became a major supplier of arms to the government in Khartoum, which was engaged in conflicts with separatists in Darfur in the West and in the South. During much of this period, China used its status as a permanent member of the Security Council to block sanctions against Sudan especially over the government's support of the Janjaweed militia in the continuing fighting over the Darfur region of western Sudan, and against a different separatist movement in the South. China altered its staunch support of the government in Khartoum, encouraging it to accept UN peacekeepers. In 2008, in advance of the Beijing Olympics, some international celebrities tried to make the connection between refugees in and from Darfur and China's oil trade with Sudan; their public protests and calls for an Olympics boycott may have helped influence China to put new pressure on Sudan to control the Janjaweed and/or negotiate a peace settlement in Darfur.

Angola. This country is Africa's second-largest oil producer, behind Nigeria. The United States and China are believed to be Angola's biggest oil export customers, although details of oil transactions are shrouded in mystery. Oil sales are conducted through the state-owned Sonangol, and details are kept secret from other government ministries and the parliament. China extended more than $5 billion in loans and credit to Angola in the early 2000s, mostly backed by oil. One-fourth of this amount ($1.4 billion) came from a single operating loan to Sonangol from the China Petroleum and Chemical Corporation in 2007.

Equatorial Guinea. Equatorial Guinea lies in West Africa and covers an area of about 10,600 square miles; since a coup d'etat in 1979, it has been ruled by Teodoro Obiang Nguema Mbasogo. The discovery of offshore oil reserves in 1995 quickly converted Equatorial Guinea from one of the world's poorest nations into one of the world's richest, as measured per capita, although little of the oil revenue is distributed to the country's citizens. In June 2005, Chinese Vice-President Zeng Qinghong announced that China would boost bilateral ties to a "new level," and in October 2005 President Obiang visited Beijing for the fifth time. In February 2006, the China National Offshore Oil Company (CNOOC) signed a five-year agreement to explore for oil in a 915-square-mile area off the coast of Equatorial Guinea, which is Africa's third-largest oil-producing state. Previously, American companies had exclusive exploration rights to Equatorial Guinea's prospective sources. Leaders of the two states promised jointly to seek "a just and sound new international political and economic order." In 2007, China canceled debts totaling $75 million and promised future aid; President Obiang described China as his country's "best friend." A Chinese company is also responsible for virtually all log exports from Equatorial Guinea - exports that some environmentalists say have endangered the country's forests.

Role of the United States. China faces major competition for African oil from the United States. In 2014, the United States imported a significant amount of oil from Nigeria and Angola. In 2007, the United States established Africa Command, the newest and smallest of America's six regional military commands. (Others include Middle East Command, Pacific Command, European Command, Northern Command for North America, and Southern Command for Latin America.) The new command initially focused on East Africa, where Islamist radicals had long been active in Somalia, but it also reflected America's growing dependence on natural resources, especially oil, from the continent. As China’s involvement on the African continent increased throughout the twenty-first century, the relationship between China, the US, and African trading partners only become more complicated.

Nigeria. China has long been shut out of a relationship with Africa's second-largest (and once largest) oil producer, but not for lack of trying. In June 2009, China proposed helping Nigeria fund joint ventures with Western oil companies that have long dominated the country's petroleum production. The presidential adviser on energy matters, Emmanuel Egbogah, was quoted as saying China had offered $50 billion to acquire rights to six billion barrels of Nigerian oil reserves - or possibly Nigeria's share in joint production agreements with Western oil companies - rather than rights for Chinese companies to explore and drill for oil on their own.

Oil production in Nigeria's Delta region had been adversely affected by Indigenous people conducting terrorist attacks (see Nigerian Delta Oil War), and for many years, Nigeria had run short of its share of funding joint projects with Western oil companies. China is viewed as a possible source of investment in such projects. Some news reports in 2009 quoted oil executives as saying that Nigeria was using the prospect of partnership with China as a bargaining chip in negotiating new agreements with Western oil companies. In November 2009, after intense negotiating, Nigeria renewed leases to Western oil companies, including Shell, ExxonMobil, and Total, for a further twenty years with an option to renew, which happened in 2023. In 2006, during a tour of Africa by Chinese President Hu Jintao, China agreed to invest $4 billion in oil and infrastructure projects in exchange for four oil drilling licenses. China made other investments in Nigeria, including buying a stake in an oil refinery, in a railroad system, and in several factories. By 2015, China has become the largest exporter of goods from sub-Saharan countries and the region's largest development partner. By 2021, Nigeria had become the continent’s largest importer from China.

At the US-Africa Leaders Summit in 2022, diplomatic and commercial relations between the US, Africa, and China were at the forefront of the conversation. By the 2020s, China secured its place as the main rival of the US on the African continent. Members of the Biden Administration expressed concern that China was too quickly advancing its own geopolitical and commercial interests, which could potentially interfere with US-African relationships. The US stated China needed to be watched as its dealings affected African infrastructure, resource extraction, and conflict resolution.

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