China Seeks African Energy Resources

The Asian Giant Makes Advances to Africa in Search of Oil

May 3, 2009 Simon Davies

China's rapid economic growth has led the Asian giant to look at Africa as an alternative source of resources, especailly oil and gas.

Over the last decade, Africa has returned to centre stage in terms of international trade. China, in particular, has been making sustained advances to the forgotten continent, in a bid to obtain the energy resources it need to fuel its rapidly expanding economy. Is this attention good news or bad news for an African continent that is plagued by war, famine and poverty?

At a conference in Uppsala, Sweden in September 2008, researchers, experts, diplomats and journalist discussed this very issue and came to the conclusion that the opportunities outweigh the challenges, as long as the African governments begin to develop a coherent framework on how to deal with the Chinese advances (See China and India in Africa)

China Needs Oil

China's economy has averaged an annual growth of 9 percent for the last two decades, requiring that massive levels of energy. China used to be Asia's largest oil exporter but became a net importer in 1993. Most of its oil currently comes from the Middle East, but the potential of African oil is causing its attention to shift there.

Africa possesses only nine percent of the world's proven oil reserves, but experts believe that there could be much more, and the quality of the oil is very high – with higher levels of the lighter hydrocarbons making it cheaper to refine. China has been quick off the mark in its involvement in the African oil industry, importing large quantities of oil from Angola, Equatorial Guinea, Nigeria, Republic of Congo and Sudan.

Chinese Strategy of Investment

The Chinese government has used what is actually a very traditional strategy in its involvement in Africa. Like the Europeans, Americans and Japanese before them, they have offered the poor countries comprehensive and exploitative trade deals combined with aid. So, according to China, Africa and Oil, Chinese companies have been involved in building railways, schools, roads, hospitals and bridges across places like Angola and Sudan in return for major stakes in oil production from those countries, and the Chinese armed forces have been heavily represented in the UN peacekeeping forces in Darfur, where oil production is often hampered by violence.

Opportunities and Challenges

While there are some concerns about the nature of Chinese involvement in Africa – especially in regard to arms sales to countries already torn apart by civil wars – the potential for the growth of the economy of Africa is huge. In fact an economic alliance between China and Africa could change the face of the global economic system which has been dominated for so long by the northern hemisphere.

Enjoyed this article? Then read about India's relationship with Africa.

References:

China and India in Africa: Opportunities and Challenges a report by Christian Palme of the Nordiska Afrikaninstitutet

China Africa and Oil by Stephanie Hanson of Council on Foreign Relations

The copyright of the article China Seeks African Energy Resources in International Trade is owned by Simon Davies. Permission to republish China Seeks African Energy Resources in print or online must be granted by the author in writing.

Oil Derrick

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