China has played “vital” role in Angola’s economic consolidation

27 December 2010

Luanda, Angola, 27 Dec – Chinese investment in Angola is playing a “vital” role in the country’s economic consolidation, as well as a positive impact on the living conditions of many Angolans, said researcher Phillippe Asanzi, of South Africa’s Stellenbosch University.

In the latest edition of the Centre for Chinese Studies bulletin from the university, China Monitor, Asanzi said that Angola’s success in recent management of its macroeconomic policies was not only due to investments from Beijing, but was also strongly liked to the Chinese and China’s imports of Angolan oil.

“The general assessment is that Chinese investments have had a considerably positive impact on the Angolan economy. In the last few years, China has become a big player in Angola’s oil industry,” the researcher said in the document to which Macauhub had access.

Today, he noted, 45 percent of Angolan oil goes to China, the large economy that has most increased its consumption of oil.

The rise in exports to China, together with high oil prices on the international market, have meant that in the last few years Angolan public revenues have increased significantly, as well as foreign reserves, he noted.

This trend was interrupted last year and even in 2010 production has been affected by technical problems, but recent figures published by the Economist magazine point to a continued rise in oil production, which is expected to drive economic growth and state revenues.

Assanzi noted that the rise in revenues has made it possible for Luanda to reduce its budget deficit and stabilise inflation, of around 18.5 percent in 2005 to close to 12 percent since 2006.

“Chinese investments in Angola, especially those in the construction sector, have had a generally positive impact on the Angolan economy, as well as the population,” he noted.

Chinese loans, estimated at over US$10 billion, have ensured the country’s reconstruction since 2002, and have made it possible for Chinese construction companies to gain a strong presence in the Angolan market.

Companies from Beijing have also invested considerably in the telecommunications, automotive, fishing and energy sectors.

The oil industry is “emblematic,” Asanzi said, given the size of investment, namely the acquisition of stakes by Sinopec in three Angolan offshore oil blocks.

According to the researcher, there are still, “imperfections” to be corrected in the Chinese-Angolan economic relationship, particularly in the creation of Angolan jobs on a large scale, boosting local economies and transferring Chinese technologies.

These imperfections are often liked to internal factors, specifically the nature of political power in Luanda, but Beijing should do more, according to the researcher.

For now, he said, China’s economic involvement has a “positive impact on the standard of living of (part of) the Angolan population.” (macauhub)