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China Expanding Political, Economic Reach Deep into East Africa  - 2004-09-29

In recent years, China's rapid economic growth and increasing political clout have greatly accelerated the country's involvement on the African continent, especially in key oil-producing countries such as Sudan in East Africa. Analysts see China's activities in East Africa as a multi-layered approach by the government to secure partnerships for long-term economic gain and for advancing China's geopolitical ambitions.

Four months ago, a large delegation of experts from the China National Petroleum Corporation traveled to Nairobi, Kenya, to meet the country's energy minister and to visit the headquarters of the National Oil Corporation of Kenya.

The Kenyan oil company's managing director, Mary Kimotho M'Mukindia, recalls that the officials from the state-run Chinese oil giant showed special interest in exploring a basin in northern Kenya.

"The northern part of Kenya, we believe, is really a part of the central Rift System that extends into Sudan, on to Chad and into Nigeria and, as you know, that is an oil-producing basin," she said. "I believe it was very much an exploratory visit where they wanted to make their ties at a senior level, establish contacts, know who they have to deal with. We have corresponded in writing and we are hopeful that they would be able to send a team of geologists and study the data that we have."

China National Petroleum Corporation is already well established in East Africa, particularly in oil-rich, war-ravaged Sudan. In 1995, the company won a coveted bid to exploit the country's oil reserves.

China's foothold in Sudan strengthened, two years later, when U.S. economic sanctions against the government in Khartoum prevented most American oil companies from doing business in the country.

Under the flag of its petroleum company, China began pouring millions of dollars into Sudan's fledgling oil industry, constructing several oil fields, a refinery, and two long-distance pipelines to transport crude from the oil fields to Port Sudan on the Red Sea for export.

In less than a decade, China helped transform Sudan from being an oil importer to a country which now earns nearly two billion dollars annually in oil sales abroad. In turn, China has secured a 40 percent stake in the Greater Nile Petroleum Operating Company, the main international consortium drilling for oil in Sudan.

But having transformed Sudan's economy, China is now under increasing international pressure to exert political influence on the Sudanese government to stop Sudan's military build-up. Human rights groups charge the government in Khartoum is using oil revenues to purchase jets, helicopters, and arms for use in the Darfur region of western Sudan, where government forces and pro-government Arab militias have been accused of killing tens of thousands of black civilians during the 17-month civil war.

China has been reluctant to intervene in the Darfur conflict, insisting that its oil business in Sudan should remain separate from Sudanese internal affairs.

Washington-based Sino-African analyst Domingos Jardo Muekalia says he believes China makes that distinction for a vital economic reason.

"China's goal is to look after China," said Mr. Muekalia. "This is certainly a struggle for its own survival, to increase the ability to sustain its growth."

China has the world's fastest growing economy, moving ahead at a steamy pace of eight to 10 percent a year for the past decade.

The seed for this phenomenal growth was planted, nearly two decades ago, in the reformist policies of Chinese leader Deng Xioping. That was when Mr. Deng ordered communist China to adopt rapid economic development as the way to lift more than a billion people out of poverty and to secure China's place as a global power.

Oil from Sudan is now meeting some of China's ever-increasing fuel demands. But political scientist Garth Shelton at the South African Institute of International Affairs in Pretoria says he believes China's strategy in East Africa and other parts of the African continent is aimed at securing other important concessions.

"It's quite clear that there's a desperate need for increased agricultural land in China," said Mr. Shelton. "In South Africa, we know that China has invested in some farm areas in one of our northern provinces. So, it's very possible that China will look to East Africa as well to increase food production, possibly for export back to China or export to global markets."

China is already involved in a major agricultural project in the tiny country of Rwanda, teaching local communities how to cultivate rice.

In Tanzania, state-run Chinese agricultural firms have helped revitalize thousands of hectares of abandoned farmland that once grew sisal, a vital cash crop in both Tanzania and in China. After four years of work, the farms are now producing surplus crop for export.

Beyond agriculture and oil, China has also rapidly expanded its investments in East Africa for the past several years.

State-run Chinese companies have been intensely engaged in building roads, railway lines, dams, and hydropower stations in several countries, including Rwanda, Sudan and Ethiopia. China also recently played a role in long-running regional talks to end the 13-year civil war in Somalia. Last month, China gave mediators $100,000 to finance the last phase of the talks, urging warring Somali factions to maintain peace and form a functioning government.

Such activities may not appear to have a clear immediate benefit for China. But Sino-African analyst Domingos Jardo Muekalia says he believes they do fit into China's long-term strategic goal to expand and strengthen its political and economic influence in East Africa and elsewhere on the African continent.

"China is not simply looking at today," said Mr. Muekalia. "The Chinese are good at projecting themselves 60, 100 years ahead of time. Both the U.S. and China will need to increase their influence in Africa; for oil, for political influence, for market, for space. I mean, Africa's importance in the international arena is going to increase a lot. So, they are trying to move in as fast as they can and position themselves."

Mr. Muekalia says determining how and if China's new approach to Africa can also benefit the continent now depends largely on the actions of African leaders and their governments.

To maximize what Africa can get from China, Mr. Muekalia says African leaders must find a way to turn Chinese interest and investments into long-term economic development for their people.