Out of Beijing

by Stéphanie Giry | November 15, 2004

All summer, the U.N. Security Council debated whether to condemn the Sudanese government for supporting the murderous Janjaweed militias in Darfur. In July, it passed a weak resolution threatening sanctions against Khartoum. Then, in September, after the Bush administration labeled the massacres genocide, the United Nations passed another, similar, resolution threatening sanctions if the killing continued. Yet the United Nations did nothing more, even as the death toll rose in Darfur. On the campaign trail, John Kerry blasted the Bush administration for failing to push the United Nations to take a stronger stand. Editorials in nearly every major U.S. newspaper echoed Kerry’s criticisms, denouncing the White House for watching Sudan burn.

Yet the Bush administration is getting more blame for Darfur than it deserves—and Beijing is not getting enough. Quietly but steadfastly, China’s ambassador to the United Nations, Wang Guangya, has helped defang U.S.-sponsored drafts against Sudan, transforming language threatening to “take further action” against Khartoum into the more benign “consider taking additional measures.” China then abstained from voting on even this weakened resolution, along with longtime ally Pakistan.

Beijing’s goal? Probably to protect its investments in the Sudanese oil industry, including a 40 percent stake in a refinery pumping more than 300,000 barrels a day and a 1,500-kilometer pipeline from Sudan to the Red Sea. China’s projects in Sudan are the pride of Beijing’s new policy of prospecting for oil abroad—especially in Africa, where vast untapped fields could help fuel China, which recently became the world’s second-largest oil consumer. In fact, by massively investing not only in African oil but also in African public works, telecoms, agriculture, and other sectors, China is trying to buy the hearts and minds of African leaders as part of a broader push to win allies in the developing world and boost its soft power abroad.

But China’s efforts don’t bode well for African democracy—or for Washington. As the diplomatic wrangling over Sudan shows, China’s march into Africa will, at best, complicate African and U.S. efforts to bring good governance and human rights to the continent. At worst, it will hurt the fight against terrorism and weapons proliferation.

In 1993, after decades of self-sufficiency, Chinese domestic oil production could no longer satisfy demand, which had shot up because of the country’s extraordinary economic growth. Since then, China has had to import more oil every year, from 6.4 percent of its total consumption in 1993, to 31 percent in 2002, to a projected 60 percent by 2020. As a result, Beijing has started to look for more oil abroad. In theory, China should be content to buy its oil from the world market. But, like the United States and other big consumers that don’t trust the system to work perfectly, China has started courting producers directly. In 1996, Beijing set out to meet a third of its oil needs by sending state-controlled companies to prospect throughout the world.

So far, Beijing hasn’t had much success in Asia. Deals for two pipelines, one from Russia and another from Kazakhstan, have stalled, leaving China with no direct conduit to any of its neighbors. Meanwhile, China’s state-controlled oil companies haven’t been able to displace well-established U.S. and European competitors in the Middle East. Despite fervent negotiations, the most Beijing has obtained from Saudi Arabia, the world’s largest producer, is the right to prospect natural gas to sell to the domestic Saudi market.

Little wonder, then, that Chinese officials see Africa as El Dorado. A recent report by Washington’s Center for Strategic and International Studies estimates that proven oil reserves in West Africa have doubled in the past decade to over 60 billion barrels. And, thanks to foreign investment, production in the region is about to take off. A decade ago, West African states (other than Nigeria) produced little. But Cambridge Energy Research Associates predicts that the region will turn out one in every five barrels of crude produced in the world between now and 2010, as well as vast quantities of natural gas. Except for Chad’s inland fields, most of these resources lie offshore in the Gulf of Guinea, in an arc running from Nigeria to Angola. West African oil is of high quality—light, waxy, and low in sulfur—and is especially appealing to Chinese companies, which use refineries designed for domestic oil of a similar grade. Another bonus: Aside from Nigeria, West African producers do not belong to OPEC and are not subject to the cartel’s production or export caps.

Chinese officials understand what is at stake. China already buys 25 percent of its foreign oil from Africa, and a recent report commissioned by Prime Minister Wen Jiabao urges Beijing to increase that share to 30 percent. (African oil accounts for 14 percent of total oil imports to the United States.) Beijing now hopes to get 50 million tons of oil from the Gulf of Guinea every year. In 2003, it bought ten million tons from Khartoum and more than $1 billion of petroleum products from Angola and South Africa each. Chinese oil firms CNPC and Sinopec recently struck deals with Algeria, Gabon, and Nigeria, and they are in talks with the governments of Niger, Chad, the Central African Republic (CAR), Congo, and Angola.

These projects are the handsome result of Beijing’s aggressive new African diplomacy. In February, President Hu Jintao embarked on a highly publicized tour of Algeria, Egypt, and Gabon, with oil executives in tow. At roughly the same time, Sinopec inked its first agreement with Gabon, a nation also wooed by the Bush administration and U.S. oil majors. Gabonese Foreign Minister Jean Ping, whom Hu met earlier this year, is known in West Africa as a Sinophile. Ping could prove a good intermediary between Beijing and the tiny island-state of Sao Tome and Principe, an official ally of Taiwan that sits on major untapped oil reserves and was saved from an attempted coup last year by Ping’s intervention. Sao Tome and Principe has also been aggressively courted by U.S. oil companies.

Beijing’s oil-slicked diplomacy builds on goodwill generated by its past actions in Africa. In the 1960s and 1970s, China supported revolutionary movements in Africa, vowing to help protect it against U.S. and Soviet imperialism. Many of those former rebels have now come to power and are willing to repay favors to Beijing. What’s more, unlike the United States or other Western nations, Beijing does business without setting conditions on human rights, transparency, or good governance. It requires only that trading partners not recognize Taiwan, and all but a handful of African states have obliged.

Predictably, this amorality has been a boon to business. Beijing’s state-controlled CNPC held onto its share in the Sudanese project, even after stockholders pressured the Canadian company Talisman to pull out because of Khartoum’s human rights violations. (A 1997 sanctions package prohibits U.S. companies from investing in Sudan at all.) For African nations, doing business with U.S. companies “is complicated,” says International Crisis Group special adviser John Prendergast, an Africa expert. “[The United States has] a lot of different compartments to [its] foreign policy. And many of them are really irritating to countries like Nigeria and Angola.” Authoritarian African leaders understand the difference. Unlike America’s “tied aid,” China’s cooperation comes only “with mutual respect and regard for diversity,” said Gabonese President Omar Bongo, who has been in power for three decades and is routinely condemned in State Department human rights reports.

Unencumbered by principles, Chinese companies are free to go where many Western firms cannot. Beijing moved closer to Nigeria in the mid-’90s, when, after the execution of writer-activist Ken Saro-Wiwa, the U.S. Congress considered blocking new investments by U.S. oil companies. Chinese companies positioned themselves in Libya well before the U.N. sanctions against Tripoli were lifted last year. Consider also Beijing’s tactics in the CAR. When the European Union and international lenders refused last year to bail out the new authoritarian government until it restored constitutional order, Beijing stepped in, bankrolling the entire civil service. The move was savvy: Being in the CAR government’s good graces won’t hurt when, as energy experts predict, access to Chad’s oil fields opens up on the CAR side of the Chad border.

Beijing’s methods apply to more sectors than just energy. In 2000, the Chinese government launched the China-Africa Cooperation Forum, “a framework for collective dialogue” designed “to seek peace and development.” Beijing could have said commerce, too. By the forum’s second meeting, three years later, Beijing had signed 40 trade agreements and 34 investment treaties with African states and wiped clean a collective debt worth some $1.3 billion. Meanwhile, China has helped build roads in Equatorial Guinea, dams in Morocco, an airport and a nuclear reactor in Algeria, and government offices in Cite d’Ivoire, Djibouti, and Uganda. Beijing is even pushing the Chinese to travel to Africa and to buy African products at home.

In return, Beijing has won access to critical resources like natural gas, in addition to oil and vast new markets for its goods. Chinese trade with Africa has almost doubled since 2000; and, although it is still a fraction of China’s worldwide exchanges, it’s already about half of U.S.-Africa trade.

Beijing’s tactics should worry Washington—not to mention average Africans. Increasing demand and shrinking domestic supplies are making the United States overly dependent on oil imports, and Washington’s search for new suppliers in West Africa—which the Bush administration has called “the fastest-growing source of oil and gas for the American market”—seems to pit the United States against China. Yet, because Washington already has solid ties with the Gulf of Guinea’s largest exporters and U.S. companies are better equipped than CNPC or Sinopec to perform the type of deep offshore drilling that will unlock the region’s resources, China’s hunt for African resources is not a direct threat to U.S. energy security.

It is, however, a threat to other U.S. interests on the continent. While Beijing courts African capitals for access to oil and gas, Washington is trying to convince African leaders to host U.S. military bases, battle terrorism, and emphasize human rights. After all, with growing concerns that unstable regions could become terrorist havens, Washington’s commitment to democracy in Africa is becoming a security imperative. The Bush administration has committed $100 million to help eastern African states train their forces to better patrol borders, block terrorist financing, and reinforce aviation security. And, at an international counterterrorism conference in Algiers last month, U.S. ambassador for counterterrorism Cofer Black renewed a pitch for Africa’s cooperation, arguing that “the struggle against terrorism is also in part the struggle for a better society.” Meanwhile, through the Millennium Challenge Account, the Bush administration has offered aid to African nations that promote good government.

But China’s march could scuttle Washington’s efforts. In a searing 581-page report, Human Rights Watch recently argued that Chinese companies are complicit in Khartoum’s efforts to displace populations in southern Sudan to clear the way for oil rigs. It also charges that China’s oil purchases have enabled the Sudanese government to buy arms—sometimes from Beijing itself—fueling the violence in Darfur that Washington says it is now trying to stem. And who knows how much of the $1 billion in arms that Beijing sold to Ethiopia and Eritrea during their 1998-2000 war has migrated over the border into Sudan? Of course, it would be unfair to hold Beijing solely responsible for Sudan’s abuses, or to absolve Washington simply for condemning the violence in Darfur. But, by bypassing sanctions, trading arms, and leveraging its influence with international organizations, Beijing has indeed helped prop up Sudan’s oil industry and the government in Khartoum.

Likewise, Beijing could undermine U.S. efforts to stabilize President Olesegun Obasanjo’s beleaguered and reform-minded government in Nigeria, a key ally in Washington’s fight against terrorism. “It would really help the Nigerian [government] to have a business partner that didn’t care about human rights,” Prendergast says, citing Obasanjo’s continued struggle with rebels who regularly disrupt oil production. “Sudan is providing a really good example of how China can help you,” Prendergast says. “If I were Obasanjo, I’d be looking at that.

Some already are. Last month, the governor of Nigeria’s Kaduna Province, the site of sectarian killings and an enforcer of sharia law, invited Chinese investors to set up businesses there. And the government of Angola, which has been pushed by the United States and the World Bank to improve transparency in the distribution of its oil money, has increasingly sought out Chinese investors. As a result, Beijing’s unconditional investments across Africa could feed violence or prop up authoritarian leaders, much as they have in Burma, Laos, and other Asian nations where China has become the main external power. Just ask Darfurians where that can lead.

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