The China-Angola Partnership

China’s presence in Angola presents a fascinating case study of China’s oil relationships with African nations, and there is a complex interplay of benefits and challenges. In Angola, China’s presence remains modest relative to that of the Western IOC giants. However, beyond the percentage share of stakes, China’s loan-for-oil deals with Angola represent its growing reach and point to many intangible ramifications. China’s loans are an attractive alternative to those from international institutions that can have democratic-promoting strings attached. One common criticism is that China’s economic policy is resource-driven and goal-oriented; its means-to-an-end, non-interference approach can thus challenge Western countries’ hopes for democratic progress in Angola.

A fundamental question is whether moral responsibility is part of the equation, or whether oil deals are business transactions in essence – one exchange for another. Another is what kind of balance is preferable between Angola’s economic growth and economic development objectives.

These perspectives can be useful for assessing the lens through which observers view China’s Angola policy. There is little doubt that an increase in Angola’s GDP output is necessary to increase its standard of living, but oil-rich countries – Saudi Arabia and Oman, for example – that experience “windfall gains” from oil may need more time to adjust.

Thomas L. Friedman’s “First Law of Petropolitics” posits an inverse relationship between the price of crude oil and the pace of freedom. Yet China also provides Angola with much-needed infrastructure construction, at the opportunity cost of possible transparency and corruption improvements often required of International Monetary Fund assistance. Ian Taylor has remarked that Angolan elites are “deeply appreciative of China’s ‘non-interference’ stance.” Comparatively speaking, the low-interest, condition-free, and infrastructure-friendly Chinese loans remain attractive to the Angolan government.

From Angola’s side, analysts note that the Angolan government also wishes to diversify both its exports and its trade partners. A 2007 Chatham House paper “Angola and China: A Pragmatic Partnership” found that the African officials interviewed wished to avoid overdependence on China as an economic partner. The Angolan government has also expressed this publically. For example, in 2008, Angolan President dos Santos remarked on the country’s economic relationships that “globalization naturally makes us see the need to diversify international relations and to accept the principle of competition, which has in a dynamic manner, replaced the petrified concept of zones of influence that used to characterize the world.” The People’s Daily also reported that the Angolan Trade Minister Maria Idalina Valente said in January 2011 that Angola’s biggest challenge is diversification of its economy beyond oil.

Read the rest of this article by Shelly Zhao at China business news website, China-Briefing.com.

The site is published by the China business guide publishers, Asia Briefing Media, which also publishes the Vietnam business news site, Vietnam-Briefing.com.

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