Africa Battleground For Chinese-American Rivalry

By IndepthAfrica
In Angola
Sep 5th, 2012
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By Alsir Sidahmed

The recently concluded election in Angola is a non-event given the fact that the ruling party, the Popular Movement for the Liberation of Angola (MPLA), led by President Jose Eduardos Dos Santos was expected to win anyway, as it did in the previous election. The difference this time was that 82 percent of the votes the party received in the 2008 elections fell slightly to 73 percent leaving the rest to be shared by others, mainly, the two main opposition parties — UNITA and CASA-CE. UNITA’s share climbed to 18 percent while CASA-CE won 5 percent of the vote.

The case of Angola is quite interesting given the fact that Dos Santos managed to pull the country out of the Portuguese colonialism that lasted for centuries, ended the 27-year-old civil war and utilized the country’s oil wealth that fueled the country’s economic growth and made Angola the fastest growing economy in the African continent.

But what is more interesting is that despite the fact that the main players in the Angolan oil industry are the US and Western oil companies — ExxonMobil, Chevron, Texaco, Elf, Agip, BP and even the Brazilian Petrobras, but the Chinese are gaining ground in terms of being the biggest importer of Angola’s oil on one hand in addition to growing partnerships between the Angolan national oil company Sonangol and a number of Chinese oil companies like Sinopec and CNOOC. These deals were supported by a generous line of credit that exceeded $ 6 billion in less than four years, a move that allowed Chinese oil companies to have stakes in at least seven blocks.

Out of a daily output of 1.8 million barrels per day that rivals Nigeria’s standing as Africa’s major oil producer, close to 3 percent of the United States oil imports come from Angola, while China imports stand at around 16 percent. This puts China as Angola’s largest trading partner with an estimated volume of more than $ 24 billion of trade.

On the other side such relationship seems to underscore the rising oil-for-infrastructure deals between the two. In a typical Chinese way, Beijing is providing low interest loans in addition to the most-loved principle of noninterference in domestic affairs, much liked by African countries.

As such Angola seems to be one of the main battlegrounds between the two growing powers of the United States and China as to who will have a commanding presence in the continent.

During her recent visit to Africa last month, Secretary of State Hilary Clinton took an opportunity in Dakar, Senegal, to declare that the days of foreign companies coming to Africa to extract the wealth leaving little or very little to Africans should come to an end. The remark was seen as directed against Chinese growing presence, where they keep themselves out of meddling in domestic affairs of the host countries. And with their initial donations and soft financing of some projects they seem poised to take over a dominant position in a number of African countries.

Moreover, and instead of preaching host countries on the need to respect human rights, transparency and sticking to the principal of change of power, they emphasize the fact that they don’t have a colonial history in Africa and that their experience is similar to that of the newly independent African nations.

With the growing competition in virgin markets and the push to get access to natural resources, Africa is expected to be one of the battlegrounds between China and the Western countries led by the United States.

Already Beijing is surpassing Washington as being the continent’s largest trading partner. China has signed so far 32 bilateral investment agreements, another trade cooperation zone with six countries and some $ 50 billion in direct investment deals according to David Shinn former US ambassador to Ethiopia and Burkina Faso.

Besides, China is well positioned to use its huge foreign reserve surplus to provide soft finance and carry out infrastructure projects, as well as winning contract being a low bidder.

But it is not a free, easy sailing as some criticism started to surface against Chinese quality, its competition with local products and not providing opportunity for local workforce to have a chance.

It will be interesting to watch how this race plays out in the future.

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