AFRICA’S PETROLEUM AND CHINA’S ECONOMIC GROWTH AND DEVELOPMENT
How Africa’s Petroleum Supply Is Important to China’s Economic Growth and Development
While China continues to grow, its oil demand is poised to grow rapidly. For China to ensure its oil security, it must obtain oil from the global world because it lacks adequate domestic resources to quench the thirsty appetite of the country’s rapid economic development. Any approach for growth that the country takes in its demand for oil is likely to affect the global oil market and influence existing system and order of international oil. As one of its oil strategy, China’s firms are reaching every corner of the world to purchase oil or invest in oil fields showing to have opportunities disregarding the possible enormous risks. Some of China’s national oil enterprises have made outstanding investment activities in African countries (Ma, 2010). Today, China’s largest imports from Africa continue to attract global eyes. Therefore, Africa-China oil ties founded on oil investments in and oil purchases from Africa are increasingly becoming of concern to various experts and policy makers. This is especially in China, Europe, United States, and African oil producing nations.
Africa-China ties have been drastically expanding and deepening since 1995. This growing association has become the topic of international attention and debates, particularly, in popular journals and the press. Most people have argued that the involvement of China in Africa will erode the interests and influence of the developed Western countries on the continent. This is because the West has always been perceived as instruments for implementing the concerted energy strategy of China (Lensey, 2007). Similarly, the Chinese government has always supported the cause of promoting human rights and good governance. A few experts stress that the globally exploitative activities of China have increased the total supply of oil and contributed to the mitigation of the intense global oil market condition. All these have led to an improved world energy security. Additionally, some individuals contend that the engagement of China in Africa will facilitate Africa’s increased abilities and economic growth (Cichon, 2007).
Africa is viewed as a vast continent with diverse geographic trends and limited population. Africa has an enormous resource base, with world leading concentration of strategic minerals, with powerful rivers, uranium deposits, and key petroleum deposits. However, it is mainly composed of developing nations with limited infrastructure and capacity. Western strategies of development have miserably failed in Africa, falling victim to cultural differences, Cold War politics, and Africa’s colonial heritage. For a long time, China, self-declared a role model and friend of the developing world, continues to be in the midst of a resurgence African initiative grounded in a politics-free model of development (Venier, 2004). This strategy aims at securing access to resource supplies within the African content. This research examines China’s African strategy and the significance of China in globalization. The paper provides an analysis of its implications for the U.S. national security and recommends proactive strategies to deal with this phenomenon (Kupchan, 2012).
China in Africa
The interests of China in the African continent are not new; for long, China has considered itself as the leader of the developing world. As such, it has been involved in Africa from 1960s, supporting the insurgency of anti-colonial and offering development support to the socialist regimes of Africa. Tanzania-Zambia railway (TAZARA) is one of the crowns of this development assistance. The railway line ran from Dar es Salaam across to Tanzania through to Zambia. China deployed its workers to Africa to build the railway and gave financial support through interest free loans. The new rail line was intended to transport resources such as copper from Zaire and Zambia. It also provided an option to the reliance on the white governed airports in South Africa. China’s support of African leaders such as Robert Mugabe of Zimbabwe spans decades. During the declaration of independence in some African countries, China provided training, logistical, funding and arms support to the African liberation front. For instance, when Mugabe was elected, he dismantled the rival political party and through China’s support, the ruling party has remained in power for more than twenty-five years. Although China has retained most of its relationships with African countries, in the early 1980s, China adopted a focused and renewed presence on the African continent (Ozdemir, 2008). This presence has been driven by the need to access resources.
The fundamental reason for China’s renewed engagement in Africa is the desire for access to the natural resources in Africa primarily minerals and energy. After the implementation of the free market reforms in 1978, China’s GDP has been growing at an average of ten percent annually (Griffin, 2011). The country continues to tap into various resource markets, to satisfy its ever-growing economy. China’s intention is not to compete on the open market in terms of natural resources; it seeks to own the resources, as well as their infrastructures to create a safe source of supply. This push has been accompanied by varying levels of financial aid. State-owned Chinese construction firms in Africa receive incentives in terms of government guarantees and export credits from bank loans (Wang, et al. 2012). Similarly, state-controlled financial institutions and banks have ensured expensive loans are available to private Chinese enterprises investing abroad. Some Chinese think-tank experts like Lucy Corkin explain that this trend has trickled down to Africa’s micro-entrepreneurs. It has a gigantic fragmentation and diversification of Chinese commercial actors coming from China. Strategies of national security of the U.S. government have often been characterized as having had three factors like defense, development, and diplomacy. China’s efforts to grip the diverse physical and human geography of Africa will be best examined throughout the paper (Ma, 2010).
Facts about Africa-China Oil Ties and the Global Oil Market
Some facts must be attached to Africa-China oil relations and the world energy ties. Oil meant for transportation is extremely challenging to substitute for a different energy for various reasons namely its high-energy transportability and density. The global transportation framework is fueled entirely by liquids. The transportation industry accounts for approximately 80% of the U.S. oil consumption and is driven by petroleum (Resende & Cote, 2008). More oil is being used in China’s transportation industry as the number of commercial trucks or passenger cars increase rapidly. Nevertheless, the remaining percentage of China’s oil consumption goes to industry and different sectors. The global oil market is internationally integrated, and various energy markets like coal and natural gas are increasingly interacting with it. This implies that no single country can become an isolated land with immunity from the implications of oil markets.
The spatial distribution across the production, reserves, and consumption of oil all over the world is unbalanced. Over sixty percent of the world has proved oil reserves are concentrated within the Middle East. In addition, approximately eighty percent is concentrated in OPEC while the regions share of the global oil consumption and production is estimated at thirty-three percent and nine percent respectively in 2012. Africa accounts for ten percent, eight percent, and five percent of the global oil reserves, production, and consumption in 2012 respectively. On the other hand, countries such as China and U.S. hold fewer oil reserves than they consume and produce. In 2012, China’s and U.S.’s oil production accounted for roughly five percent and nine percent total global production respectively. These two nations own less than 1% and two percent (China and U.S.) respectively, of the global proved oil reserves in 2012. The United States consumed twenty percent of the global oil in 2012 while China consumed roughly twelve percent. The two countries are among the biggest producers of oil in the world, and the United States is the largest oil consumer followed by China. Therefore, both nations have a significant influence on the global oil market.
National oil firms dominate global oil production and control the largest part of the world’s oil reserves. National oil firms are controlling about eighty percent of the world’s oil reserves with no equity involvement by international oil firms. Western international oil firms now control less than ten percent of the world’s gas and oil resource base. In addition, out of the top twenty oil-producing firms across the world, fourteen are national oil producing companies (Wang, et al. 2012). Most oil-producing firms across Africa are open to foreign investment for production and exploration because they lack capital, skills, technology, and expertise in these fields. On the contrary, the leading reserve holders in other regions of the world do not permit foreign oil firms to access their oil resources or limit the incentives and opportunities for foreign investors. Therefore, almost all of the leading international oil companies are penetrating, into the African continent to compete for its oil resources. China has quickly overtaken the United States to become the largest trading partner of Africa. Just in 2012, volumes of trade between Africa and China totaled up to almost $250 billion (Peterson, 2005). Most of Africa’s exports to the U.S. And China are oil and other primary goods.
The world oil market has recorded important trends. The global demand for oil is projected to grow by more than five percent by 2030 with the Middle East, China, and India accounting for seventy percent of the increase. China’s oil demand is anticipated to expand during this period, and oil imports will grow. This implies that China will overtake the United States thereby becoming the largest world net importer of oil by 2020 (Bhaumik, 2009). It will reach approximately twenty-four million barrels daily net oil consumption by 2030. This suggests that nearly eighty percent of China’s oil consumption will rely on imported oil. However, United States oil demand will decline or remain unchanged; thus, its oil imports are subject to fall to the extent that North Americans will become the largest producer of oil by 2030. With the rising oil production in the U.S., by 2020, the U.S. is anticipated to become the largest global producer of oil. The demand for oil is likely to peak just before 2020, and by 2030, it will be almost 14 million barrels per day, lower (Peterson, 2007). This decline is equal to the current Norway and Russia oil production combined, easing the pressure for new developments and discoveries.
Two Different Views of China’s Engagement in Africa
China’s extending involvement with Africa has made a serious debate around universal observers, pundits, and policymakers. The center of the argument lies in how to assess China’s emerging role in Africa’s development. Another challenge is how to respond to China’s diverse ways or shows through which China creates consolidated multilateral and bilateral relations with numerous African nations. There are two opposing perspectives concerning the China-Africa oil ties. The “negative side” disapproves and opposes China’s model. The positive side upholds the supportive perspective and appraises China’s approach to secure African oil (Platten, 2004). The negative side underscores that the operations of China’s oil organizations in Africa threaten Western interests, cause different new issues, and increase the existing baffling challenges in African oil-processing nations. Most promoters of the negative side are U.S. policymakers, universal observers, critics, and experts in environmental protection and human rights NGOs who see China as a danger to the Western world (Resende & Cote, 2008).
Defenders of the negative side look after four fundamental contentions. First, China’s acquisition of African oil is a threat to Western oil interests, yet it erodes their impact on Africa, particularly America’s authority. A few investigators accept that the African continent has now turned into an indispensable arena of geopolitical and strategic rivalry for old and new faces. This is because it is the most promising world regions for future oil manufacturing. China’s pursuit of Africa’s oil might undermine American oil interests in the region (Cheung & Haan, 2013).
Some U.S. government reports note that China is adhering to a mercantilist strategy, attempting to lock up oil supplies worldwide by looking for close ties with major oil manufacturers, incorporating Angola and Sudan. China’s oil diplomacy in Africa is challenging U.S. foreign approach, security, and economic concerns. Iran Taylor, an African-China expert, contends that China’s oil pursuit in Africa is inciting concern in Western capitals and China’s defined concentration on African oil is possibly dangerous. China’s policy is grounded in the desire to circumvent overreliance on the worldwide oil market. It intends to achieve this through either truly obtaining major stakes in Africa’s oil fields or to defend access to them (Mackinder, 2009).
Since Chinese oil organizations are state-owned, China’s quest for oil abroad might have less to do with Beijing’s energy security than with other long-term factors. Since the upsurge in Chinese oil diplomacy, the first prerequisite of Chinese strategists is the long-term objective of being accountable for oil resources at their source to empower them to control future prices. China’s deliberations do not look favorable for the U.S. government. Although China’s chase for African resources is not an immediate danger to U.S. energy security, it is a risk to different U.S. interests across the continent. For instance, it will harm the battle against terrorism and proliferation of nuclear weapons. Second, the negative side contends that the nature of China’s oil extension in Africa is neo-colonialism. Some high governmental officials and Western journalists have made charges on Chinese neo-colonialism in Africa. For instance, former British Foreign Secretary Jack Straw expressed in 2006 that China was doing what they (Britons) had done in Africa in the past one hundred and fifty years (Friedberg, 2011). In addition, the then U.S. Secretary Clinton expressed that they would prefer not to see another colonialism rise in Africa. Consistent with the criticisms, China’s chase for Africa’s oil is not based on moral and fair methodologies. It is premised on exploitation and extending African reliance on China. Some have portrayed China’s activities as unbridled loot of African raw materials and natural resources driven by thin business interest.
The negative notion considers the operations of China’s oil organizations in Africa as having undermined Western deliberations to market exceptional services and enhancing human rights in Africa, weakening the rise of an international regime, and harming the local environment. China’s oil organizations work in some problematic and unstable nations like Sudan and Angola, which have recorded intense violations of human rights violations and corruption. Evidently, China has currently embraced a discourse in Africa that successfully legitimizes human rights violations and undemocratic practices under the pretense of state power and non-obstruction. China’s exertions do not look good for African democratic system, which worst-case scenario, complicate African and U.S. exertions to respect human rights and generate good governance in the continent. Different observers criticized that China’s movements, incorporating China’s oil purchases and sale of arms, have escalated the unstable scenario of Africa. A few experts have scrutinized the negative impacts of Chinese venture on Africa’s local setting and communities, impacts that have showed up in a few instances of resource exploitation and extraction of timber.
The negative side upholds that governmental aid for China’s oil organizations through oil negotiations, foreign aid, finance, and concerted government approach is not fair to Western oil organizations competing for acreage in Africa (Hwang, 2008). A few investigators have called attention that China has sought after Africa’s oil by offering coordinated aid bundles. For instance, to get oil deals, China enlarged expansive oil-sponsored loans, helped train employees, and build infrastructure. Similarly, a financial approach concentrating on augmenting its business investment is the driving component of China’s engagement with petroleum generating states. A few observers accept that China has an extensive energy approach and uniquely coordinated policies to back the operations of China’s oil organizations in Africa. In fact, it has developed a grand strategy to acquire a majority share of Africa’s oil accounts because of the numerous Chinese high-level official visits to Africa.
On the contrary, numerous policymakers and intellectuals in China and Africa, numerous energy exporters and some worldwide observers take an alternate stance: the positive side. The positive side touts the potential for expanding the global oil supply by the practices of China’s oil organizations in some unstable oil-handling nations in Africa, which in the meantime helps push Africa’s improvement and make economic opportunities for China and oil-manufacturing nations. For instance, while some are condemning of China for looking for selective access to oil and gas supplies in Africa, others acclaim Beijing’s eagerness to risk entering into markets where some Western energy firms cannot strive for various reasons, seemingly adding to global energy supplies, bringing down costs, and profiting customers. Positive advocates contend four fundamental points.
China’s oil organizations’ abroad ventures in oil fields are expanding the world oil supply, helping stabilize the worldwide oil business, alleviating the upward force of oil costs, and enhancing worldwide oil security. Not all of these should be considered a danger to American interests. Some experts contend that the expansion of China’s oil organizations has positive effects on worldwide oil markets by pumping oil abroad, particularly in oil fields in which different organizations are unable or unwilling to invest (Ma, 2010). Further, Chinese oil organizations are driven essential by profits and reserves, which is as same as global oil organizations and their practices are not a risk to American energy security. A few experts have challenged the presence of a U.S.- Chinese race or a “New Scramble” in Africa and the hugeness of U.S. — Chinese competition or, a business race for Africa’s resources (Scerri & Lastres, 2013).
Moreover, experts have underlined that African nations have a tendency to be in the driving seat today and will independently lure the fancied external sources of investment and political backing. Chinese investments and loans specifically have opened new policy alternatives to African leaders. Undoubtedly, most Chinese scholars and officials concede that China’s oil organizations have no competitive advantage over global oil organizations in Africa, whether in international operating experiences or technology. They additionally respect Chinese oil organizations’ engagement with Africa as handy for China and Africa’s oil-manufacturing nations (Lensey, 2007).
According to the positive side, the development of China-Africa oil ties assumes a vital part in pushing Africa’s economic advancement. The mission for oil through the package approach that China has acquired from Japan is “win-win” for African and Chinese oil-generating nations. China expands extremely huge loans to some oil-manufacturing nations, credits that are attached to Chinese equipment, machinery, and construction services repaid with resources like oil. This approach furnishes another opening for the development of gravely required infrastructure and is a pragmatic approach to address the curse of natural resources, which plagues a large number of African nations. A World Bank report has reasoned that Chinese fund is on a scale extensive enough to make a material commitment to help meet Africa’s vast infrastructure needs (Bhaumik, 2009).
This offers an essential advancement opportunity for the region. Additionally, China is en-route to transform Africa and assumes a paramount part in ending Africa’s poverty. Advocates of the positive side contend that the charges that China’s acquisition of African oil by the non-impedance approach harms Western endeavors to fortify democracy, human rights, and influence of African nations are out of line and disregard other significantly more vital elements. The conduct of Chinese oil organizations is the same as that of global oil organizations that have worked in Africa for more than fifty years. Furthermore, China’s oil organizations are latecomers as well as minor players in Africa. Along these lines, a few pros have contended that just keeping tabs on China’s oil organizations is unjustifiable and that universal oil organizations may set an exceptional example for others. In the meantime, researchers note that many of the concerns expressed by U.S. pundits and policy makers about what China is doing to meet its oil needs are things that the U.S. itself has done. Besides, literature about how China’s look for oil is genuinely threatening Western interests and impact on the continent disregard the role of other powerful factors.
The positive side advocates state that China’s governmental aid for its oil organizations is overemphasized and exaggerated. After evaluating the role of China’s government and oil organizations in its go global technique, numerous energy experts have discovered that China’s oil organizations are not arms of its government and that the inspiration of the go global procedure is based on benefit, making them act like worldwide oil organizations. Furthermore, China does not have a concerted and prospective energy technique. Additionally, China’s government entities, which are underfunded and understaffed, cannot adequately coordinate and implement national energy strategies as those organizations lack sufficient information and legal authority. Indeed, China’s oil organizations depend on their government for diplomatic backing of overseas acquisitions. This is not any different from firms in various industries across the world (Sucha-ek, 2011).
Analysis
From this pattern, coupled with the facts that transporting oil is expensive and that China is the world’s second biggest importer of oil, we can claim that China has the right to utilize foreign oil resources to take care of its demand via reasonable trade and investment. Although China’s oil interest may create pressure on the global oil market, and expedite expanding oil prices. These outcomes are the cost of China’s entry into the planet market; the world should prepare for and accept this truth. Therefore, the center of the solution lies in how the worldwide oil framework ought to be changed to adapt and respond to this new scenario. From the integration of the international oil market, keeping up the stability of worldwide oil market and guaranteeing the free stream of the world oil are basic common interests of China and the U.S. Regardless of the fact that the U.S. turns into the biggest oil maker, and North America turns into a net exporter in the near future.
China can take a few measures to slow down, restrain, or reduce the growth rate of its oil demand by enhancing fuel economy policies, economizing oil, and expanding alternative energy production. China might as well likewise fortify universal cooperation with other major oil-generating and oil-consuming nations (Lensey, 2007). This will alleviate the negative effect of China’s engagement in the world oil market and highlight the positive impact of China’s entry on the world oil-processing nations. The global oil framework has encountered the effect of new participants before; for instance, Italian and French oil organizations, emulated by Japanese ones, started to enter into global oil-manufacturing locales after World War II. Likewise, since World War II some little U.S. local oil firms have developed into enormous oil organizations by globally competing with worldwide oil organizations in Libya and other oil-rich areas (Kupchan, 2012).
Africa’s oil resources are of significant importance to China and the U.S. And might as well assume distinctive roles in every nation’s energy strategy in the future. Africa’s oil-handling nations also treat the inclusion of China and the U.S. How did Africa change from a hopeless continent into a hopeful continent labeled by the Economist Magazine some years ago? Unexpectedly, when we discuss the hopeful continent to some degree, we additionally allude to the most undeveloped continent and its enormous potential for prospective advancement. Africa endured the loss ten years in the 1980s, in which numerous Western organizations felt extremely cynical about the future of Africa and withdrew from the continent (Buss, 2011). In any case, Chinese ventures and overseas traders, as newcomers, revamped the trust of Africa by steadily entering into Africa in the 1990s to seek after benefits. The developing division of labor on the planet makes China and Africa complementary associates in internationally integrated supply chains. Both the Chinese and American governments come to be intrigued by Africa, their interest focused on Africa’s oil, but Africa’s oil resources have clearly distinctive significances for China and the U.S.
How vital are Africa’s oil resources to China’s government and the U.S. respectively?
U.S. commodity imports from sub-Saharan Africa throughout 2011 were $74.2 billion, of which unrefined petroleum imports totaled $59.8 billion and represented more than eighty percent of sum stock imports. From 2000 to 2010, petroleum items represented around eighty-nine percent of U.S. imports from Africa. At least forty percent of Nigeria’s oil exports head westwards to the United States. Contrary to the U.S., in 2011, roughly 62% of African exported going to China comprised of unrefined petroleum while Africa-China bilateral trade hit at $166 billion (Wang, et al. 2012). These numbers infer that the U.S. is in dire need for oil from Africa, but China needs a larger number of products than oil.
Indeed, the minor volume of non-oil products that Africa exports to the U.S. could be substituted by different region’s comparable merchandise. Therefore, African oil resources will be insignificant in U.S. energy consumption. Bilateral trade between U.S. also Africa will be favoring U.S., lessening the strategic economic worth of Africa for U.S. This will prompt a scenario where Africa will not be able to win or acquire the equal economic stance in the future. On the other hand, Africa oil resources will play a more vital role in China’s energy approach. Bilateral exchange between China and Africa will be driven by interdependence. This implies that Africa will have more initiatives and voice. At the end, the economic ties between Africa and China will be equivalent.
Since the oil business sector is universally integrated, the spatial dispersion of oil is unequal, and China is the second biggest oil importer, China is and will be a stable and vast oil demander: For oil exporters China is a fancied destination. Furthermore, the worldwide oil market dependably encounters bust and boom cycles. With the supply exceeding the demand, China, as the biggest future oil importer, will secure substantially more power in the market. Africa, whose strategic value of oil resources is less critical than that of the Middle East, must maintain great relations with China. Many oil organizations will be involved with Africa’s oil because African nations remain open to foreign investment. All oil organizations will attempt their best to search for oil if they can make substantial benefits. Developments and explorations can profit, given growing oil demand and high oil prices. Numerous oil firms, incorporating China’s, will contend with each other for Africa’s oil for the longest time in history (Kupchan, 2012).
Possible Implications for the U.S.
There are both positive and negative implications of China’s expanding engagement in Africa. On the positive side, China’s engagement in oil generation in the region and its venture in high hazard nations could add a new limit to the world’s tight energy market and subsequently drive prices down. Besides, the expertise and revenue that China carries could be profoundly useful to undeveloped nations in Africa. Without this help and technology, some of these nations might be unable to understand the financial benefits from oil within their borders. In the current era of globalization, certain components are crucial to success. Telecommunications is the leading vehicle linking Africa to the entire world. China has been at the forefront of providing innovative telecommunications technology to countries critically in need, giving them a geopolitical preference. China’s inclusion in a few nations could lead to instability by further empowering these nations to disregard human rights and partake in corrupt practices. A year ago, Transparency International endorsed Dr. J. Graf Lambdorff, from the University of Passau, to prepare a table ranking the perceived corruption levels across the globe. The table provided a corruption perceptions index (CPI) score for every nation.
These CPI scores identified with perceptions of the level of corruption as seen by businesspersons and nation analysts. They extended from ten as highly clean to zero demonstrating profoundly corrupt. In Africa, nine nations have more than five billion barrels of known oil reserves. None of these nine nations scored higher than a 3.4 CPI score, and six of the nine nations scored 2.5 or less.
While the U.S. supports better business practices in the worldwide business environment, China’s approach of not meddling with another nation’s internal affairs make it a perfect associate to numerous countries taking part in questionable practices. China’s developing impact in Africa is, thus counterproductive to western goals of marketing human rights and nullifying corruption. China’s developing engagement in Africa could make African governments more corrupt. Much of China’s infrastructure support to Africa is manifested as advanced loans or credits. This is of concern because dealing with Chinese Companies does not come with the same moral conditions as dealing with Western organizations (Sucha-ek, 2011).
The Chinese are considerably more inclined to do business in a manner that today Europeans and Americans do not acknowledge paying various bonuses and bribes under the table. These things have been rampant all around Africa, especially in Angola, Nigeria, and Equatorial Guinea and to a certain degree Gabon and Chad. It will be easy for those nations to work with Chinese organizations unlike the American and European organizations that are becoming limited by their emphasis on transparency in business deals. With such limitations and impositions set on oil incomes, a recently corrupt government in Africa could be more inclined to acknowledge the Chinese deals that are not connected to any restrictions (Moore, Nordquist & Fu, 2006).
The methodology that China takes to guaranteeing exceptional relations with Africa is that of unconditional aid and deliberately ignoring human right issues. Western governments have frequently questioned China’s record of accomplishment on human rights. As Africa has additionally been referred to for various human rights violations, China tends to show a strong understanding and impartiality. According to China, one of the principle advantages of Africa working with China is that there are no political strings attached (Resende & Cote, 2008).
China does not request good governance or human rights record of accomplishment, as do aid packages from the International Monetary Fund and the World Bank. A few experts highlight that the general effect of Chinese organizations in Africa remains restricted because of their absence of financial power or technology to enter the continent’s grandest oil fields, which are found offshore. On the contrary, this is changing with time. As China’s economy develops, besides its oil industry, so does its financial power. Additionally, China has recently joined various profound water ventures. One such sample is in the 2004 agreement between China and Nigeria, to improve some oil fields in the profoundly rich waters of the oil-rich Niger Delta (Neugebauer, 2009).
The Importance of Africa’s Resources
At the height of the 1970s oil ban, the then Soviet’s Premier, Leonid Brezhnev clarified the Soviet Union’s resource approach to then Somalia’s President Siad Barre. The aim of the Soviet government was to gain control of the major treasure houses, on which the West relies on. These were the mineral treasure of the Southern and Central Africa, as well as the Persian Gulf energy treasure. During the Cold War, the Soviet Union supplied the West with manganese and chromium and utilized it to its strategic advantage. In the face of the Berlin blockade, the Soviets cut off supplies of these minerals. In 1978, the Soviet Union bought a two-year supply of cobalt instantly before the Cuban upheld attack of Zaire’s (today, the Democratic Republic of Congo’s) copper cobalt manufacturing Shaba region (PWC Economics, 2013).
Besides, after the Portuguese departure, the Soviet Union ventured in and transformed both Angola and Mozambique into Marxist customer states with Soviet supplies and trained armies, which made strategic moves on the mineral handling gigantic South Africa. Further, the oil ban highlighted the United States about the geopolitical essentialness of the imbalance of supply and interest in strategically imperative resources, and control of the aforementioned resources by manufacturing states or peer contenders. The Chinese have gained experience from this later history and have advanced a resource strategy pointed at ensuring sufficient mineral imports to supply their greedy economy. The most significant part of China’s resource strategy is its concentration on securing control or ownership of the mineral resource concession. Africa assumes a monumental role in this strategy (Sucha-ek, 2011).
During the end of the Cold War, the U.S. sold off vast portions of its key mineral stockpile, and now relies upon the world market for a large portion of its imports of industrial and petroleum materials. Without a Soviet threat, the United States turned to the cheaper free market methodology of obtaining mineral imports on the world market instead of concentrating on alliances and stability of mineral processing nations. Assuming that prices rose, the United States would essentially outbid others for the resources (Lensey, 2007). For over fifteen years, the free market method has succeeded, but the development of the Chinese economy has overwhelmed its domestic supplies of crucial petroleum and industrial minerals. This created an avaricious new contender for worldwide resources, and considerably tightened the planet product market. This is pressuring the United States to revise its mineral import method and the national security impacts of China’s pursuit for mineral supplies (Resende & Cote, 2008).
Another pattern is calling into criticism of the free market methodology and its impacts on U.S. national security. Mineral processing states discharging their supplies to the world business market are presently constraining their accessibility based on political considerations. Russia and Venezuela are heartily seeking for resource geopolitics as an approach to push a political program and further their national security interests. History has shown that such strategies demoralize direct foreign investment in the mineral extraction businesses, constrain access to key new technologies, and at last decreases mineral recovery. In the short-term, such strategies might prove valuable to the producing state. The U.S. geopolitical position is further disintegrated because the vast majority of the traditional oil manufacturing is concentrated in the crucial Middle East and regulated by Muslim states. These states have recently exhibited an ability to ban shipments to the West for political reasons. Although the United States has 700 million barrels of oil stored in the Strategic Petroleum Reserve (SPR), the later Government Accounting Office expressed that was insufficient for managing the ten million barrels daily cutoff of petroleum manufactured in Saudi Arabia. This also falls short of the eighteen million daily barrel productions from the Persian Gulf (Sucha-ek, 2011).
China’s Import Dependence
China is the quickest developing consumer of energy on the planet; in 2003, China passed Japan to become the world’s number two consumer of petroleum behind the United States. Once independent in petroleum handling, China now imports 3.7 million per day of oil of its everyday utilization of eight million per day in the recent five years; growth in energy demand has been on normal, thirteen percent for every year. This pattern is prone to proceed. Manufacturing accounts for sixty percent of energy consumption in China and twenty percent of that is from the quickly developing steel and iron division. Government subsidies, lax environmental standard, and its intrinsic productivity will probably guarantee a minimal change of this consumption trend. In addition, affluence will drive an upsurge in transportation identified petroleum utilization. Ownership of vehicle in China is expected to hit 140 million by 2020, a huge growth from the twenty-five million vehicle owners in 2007. By 2025 when China’s population will have increased, another 123 million individuals, addition to oil consumption will be in excess of fourteen million per day and China will probably import an extra seven million per day of foreign oil (Sanderson & Forsythe, 2013).
The source of China’s oil imports is strategically important and a central point for China’s state-owned energy organizations and its political corps. The Middle East, which is politically unstable, headed by Saudi Arabia, Oman, and Iran represent forty-four percent of China’s oil imports. Africa, headed by Angola, Sudan, and Nigeria represent thirty-two percent of oil imports (Rosenau, 2010). Moreover, Russia supplies eleven percent of Chinese oil imports, by means of rail. A large portion of China’s oil imports must travel the Malacca Strait and other key oceanic choke points. The U.S. Navy force ensures the safety of these choke points; in addition to relying on a U.S. dominated energy market, this is perceived as a strategic vulnerability. China has developed a four-concept approach for minimizing this vulnerability:
I. To improve a blue water maritime capacity;
II. Advance a territorial, pipeline-based petroleum import framework from states like Kazakhstan and Russia;
III. Make a key petroleum reserve of 100 million barrels to supplant 30 days of lost imports; and IV. Have Chinese oil organizations buy equity stakes in, investigate, and generate petroleum in overseas oil fields.
While the concept of equity stakes so far accounts for roughly six thousand per day of oil imports, it is advancing investigation, advancement, and negotiation abilities within the government-owned Chinese oil organizations and earning respect on the petroleum market.
The heft of the world traditional oil reserves is situated in the politically shaky Middle East. A separated second spot is Europe and Eurasia, commanded by Russia, which is the biggest oil-producing state. Close behind Russia is Africa with in excess of 120 billion barrels of petroleum reserves. From its debt, governmental capacity and absence of infrastructure, and its valuable base of natural resources, Africa is profiting generously from China’s mineral import diplomacy. China’s state firms distinguish states with huge natural resource reserves. As such, they work closely with Chinese diplomats to plan an engagement program with pertinent economic and political profits. As it was throughout the Cold War, Africa remains a major supplier of strategically vital minerals (Wang, et al. 2012).
Fundamental industrial metals, such as copper, aluminum, bauxite, lead, iron core, Zinc, nickel, and the industrial minerals of phosphate rock, coal, and uranium are all present in Africa in vast amounts. Especially vital are the key minerals of platinum group metals, chromium, cobalt, and manganese. For their strategic provisions in weapons frameworks and crucial economic processes, there is usually no substitute for these minerals. The mineral reserves greatly are concentrated geologically in Zimbabwe, South Africa, Zambia, Democratic Republic of Congo (DRC), and Zimbabwe and absent in the United States or China in adequate amounts to take care of the demand.
For instance, thirty-three percent of the planet reserve base of chromium is located in the Republic of South Africa. In addition, South Africa and Kazakhstan alone represent ninety-five percent of planet chromium resources. Zambia and DRC have between fifty-two percent of planet cobalt reserves. South Africa has seventy-seven percent of the global manganese reserves and eighty-eight percent of the reserve base for the platinum group metals. The geographic concentration of these resources and absence of substitutes makes them strategically critical to China and other industrial states. Therefore, they help China’s exceptional investment in Africa (Resende & Cote, 2008).
China has made aggressive moves in tying up mineral concessions in Africa. In 2008, China signed a long-term agreement on infrastructure development with the Democratic Republic of Congo worth over $9 billion. In the meantime, the DRC national mining organization, Gecamines, consented to ease the finest mining organization, Katanga Mining Ltd. Out of the two key deposits of copper, Dikuluwe and Mashamba West in the copper-cobalt belt, paying Katanga an estimated $825 million and giving the concessions to a Chinese organization. Interestingly, the deposits have not yet been booked to manufacture copper until 2020, and China could not produce them until at least after five years (Cheung & Haan, 2013). This is an exceptional case of how access to minerals is connected to the advancement of China’s African strategy.
Conclusion
This paper puts China’s presence in the context. Since the U.S. is uncertain on how to approach China, as a foe or friend, China is equally ambivalent. The differences in the policies of the former president Bush and Barrack Obama’s administrations are substantial. Many reasons make China question U.S. intents. China looks at the U.S. As the world hegemony and expects it to embrace actions to maintain this position. If the historical containment strategy of U.S. against the former USSR, many view the present U.S. system of alliances with South Korea, Japan, India, Thailand, Vietnam, Taiwan and most recently Asia, as an effort to contain China; though the Bush administration often condemned the growing defense budget of China. A few people in china anticipate on the political motives behind the U.S. efforts to sanction Iran and the invasion of Iraq. U.S. have recently invested roughly $100 billion in Iran’s oil and gas industry (Bhaumik, 2009). In addition, China views the commodity markets, international economic and political institutions as serving the Western interests.
The International Monetary Fund, the World Bank, and the World Trade Organizations have a history of favoring developing nations with a Western orientation. This perception has been reinforced by the 2005 appointment of the former Deputy Defense Secretary, Paul Wolfowicz as the head of the World Bank. This perception of the U.S. motives continues to contribute to China’s African policy and its focus on securing resource imports from the region. The “go out strategy” of China has not been yet secured access to fundamental quantities of minerals and petroleum. It is early to conclude whether China’s government-owned enterprises will become key players in the metals and oil arena or whether they will succumb due to lack of meaningful contribution to the mineral import security. Nevertheless, it is obvious that China’s pursuit of mineral security if triggering significant political influence with the beneficiaries of its development strategy in Africa (Resende & Cote, 2008).
Sometimes, the U.S. foreign policy was criticized by various states for being heavy handed and unilateral, with limited restrictions. This approach has been accused of limiting states that should qualify for developmental aid. On the contrary, China has been using their sovereign wealth and the surplus of their trade accounts to support a new model of development. The One Child Policy is practical and merits qualification. Chinese packaging of agreements of resource access, with no strings attached model and military training affects states, which are strategically vital to the U.S. like Angola and Nigeria. However, the presence of China in Africa is confronting problems. It seems that the U.S. And China both will benefit from cooperation devoted to sustaining governments, building capacity, and promoting stability. The development focus of China on the African continent is grounded on agreements of access to resources and direct resource purchase. However, China’s efforts to pursue bilateral agreements based on resources are generating mixed results (Mackinder, 2009).
Stable states exhibiting sound governance have been viewed as a good investment risk than states characterized by dissent and internal violence. China and the U.S. have been collaborating to develop stable governments across Africa. Africa is viewed as a resource-based economy where one country may depend on the power grid, transport infrastructure, and social stability of multiple neighbors. In addition, collaboration with the defined goal of creating a greater stability on the continent will create significantly more development (Brewer & Miklancic, 2013). As a result, a large African market for China’s commodities and great potential to capitalize on its competitive advantage of cheap labor will be established. Perhaps, Africa could end up being a future breadbasket for China. Africa is rich in resources and a possible market for China’s manufactured goods. China is subject to acquire influence via its investment and increase its access to resources in a future resource-based market. Nevertheless, its investment in Africa targets states with rich resources and is less than that of Western investors. Possibly, China will stage a continental takeover where centuries of historical military and economic ties provide substantial influence without welcoming side effects (Cheung & Haan, 2013).
In fact, currently, China’s development approach risks promoting corruption, stunting manufacturing development, creating environmental problems and creating ill-will through the dumping of low-cost Chinese consumer commodities. In addition, the slumping global economic condition is projected to reduce African investment and development of mineral resources for the near-term.
Collaborations would be valuable in assisting African continent adapt to the impacts of climatic change, develop local medical capabilities and address issues of fresh water availability. These problems of human security demands on the fragile economies of limited capabilities and contributes to state and regional instability. Broadening China’s trade, developmental aid, and FDI goals to incorporate this stability and human security issues sustainable development will complement the work of other countries and organizations. It will be undertaken without undue emphasis on the distances between China and the West over conditions of support drawing with China’s aid for African peacekeeping efforts. This approach will serve as a confidence expanding measure between U.S. And China at a time when the Obama administration provides the opportunity to re-define the United States-China ties while curbing China’s quest for resources in Africa from becoming a zero game (Sucha-ek, 2011).
It is evident that Chinese engagement in Africa especially in the exploitation of resources like has both negative and positive effects. This has left many western powers worried about the rising command of the Asian giant in Africa. China has contributed significant in the growth of African nations as it exploits its petroleum reserves. This has led to significant economic growth in nations like Angola and Sudan. However, the Chinese government plays a little role in fostering the accountability of African governments it does business with. This has led to corruption. Western governments cherish accountability but admonish corruption. This may have favored the Asian giant against the U.S. (Cheung & Haan, 2013).
References
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