Angola is a priority for China in Africa

26 May 2014

Angola is one of the priority countries for China in Africa, where it will continue to focus over the next few years, according to US research organisation Brookings.

In its recent report “Africa in China’s Foreign Policy,” published by Brookings, analyst Yun Sun noted increased investment in training African human resources and social responsibility programmes in Africa as signs of continuing interest in the continent.

“Over the next few years, China’s involvement in Africa should increase,” the analyst said, forecasting that the current system will be “updated by adopting faster solutions for some social problems.”

According to the report to which Macauhub had access, “China’s economic activities are at an unprecedented level,” which also brings challenges.

According to Yun Sun, the relationship needs to undergo more in-depth strategic reconsideration, as it is now a priority to have access to African natural resources and to its growing markets in order to stimulate Chinese economic growth.

As Angola is China’s largest oil supplier, alongside Sudan, the study focuses on the role of the Portuguese-speaking country as one of China’s main partners in Africa.

In 2010 the two countries set up a strategic partnership, with China offering credit lines to Angola that are repaid in oil, which led to two-way trade rising by over 2,000 percent since the end of the civil war in 2002. This makes Angola the second-largest trading partner amongst the Portuguese-speaking nations.

According to official figures, trade between the two countries totalled US$35.91 billion in 2013, with China selling goods to Angola worth US$3.96 billion and buying goods worth US$31.94 billion.

Beijing’s priorities, Yun Sun said, mean that the Chinese Trade Ministry is “naturally inclined” to consigning much of its foreign aid to countries that offer China more trade opportunities and benefits.

As China’s economic interest is focused on African natural resources it is the countries that have a wealth of them that are the focus of its attention, such as Angola.

The level of aid provided to Angola and the system of support so effective that it has been extended to other countries under the name of the “Angola Model” – finance agreements at low interest rates for African countries, guaranteed by supplies of raw materials.

“These countries have great difficulty securing financing on international financial markets and China has made that funding relatively available,” said Yun Sun.

Angola paid off its first oil-guaranteed loan in March 2004 and, according to the analyst, the credit lines have helped Chinese companies to secure oil exploration contracts.

In 2005, the acquisition of Block 3/80 by Sinopec was announced at the same time as a US$2 billion loan to Angola, and in 2010, the same Chinese state oil company acquired 50 percent of Block 18, at the same time as the first tranche of a loan was provided by the China export-Import Bank.

Between 2004 and 2011, according to researcher Deborah Brautigam, China did unprecedented business with at least seven countries rich in natural resources, to a value of almost US$14 billion.

At the beginning of May China’s Prime Minister Li Keqiang visited Angola as part of an African tour that also included visits to Ethiopia, Nigeria and Kenya.

Angola and China signed two agreements, one to do away with the need for diplomatic visas between the two countries and another in the financial sector, following a meeting between Li Keqiang and Angolan President José Eduardo dos Santos. (macauhub/AO/CN)

MACAUHUB FRENCH