China’s Interest in AfricaChina as Savior, or China as Exploiter?

David Pietz, Washington State University

Libya

Security Council Resolution 1973 (March 17, 2011):

immediate cease fire, authorized all member states to protect their civilians, authorized a no-fly zone,

and strengthened arms embargo against Libya

What was China’s position?

In Four Parts

A Deepening Relationship: Some Data and Characterization

Background: Feeding the Economic Machine

Case Study: Oil

Generalizing: “Resource Nationalism,” “Beijing Consensus,” “New Great Game”

In the Ten + Years since the 1997 “East Asian Economic Crisis” . . .

Return to growth of ca 8-10% annually

Poverty rates cut in half

$3 trillion (US$) in foreign reserves

3-4x of $ value of economic output

Emergence of China as global economic power

China: Key Indicators2002 2003 2004 2005 2006 2007/p 2008/p

Output, Employment and PricesGDP ( % change previous year) 9.1 10.0 10.1 10.4 10.7 9.6 8.7Industrial production index (value-added) 10.0 12.8 11.5 11.6 12.5 11.0 9.6Unemployment rate (%) /1 4.0 4.3 4.2 4.2 4.1 4.2 4.2Real wage growth 15.5 12.0 10.5 12.8 .. ..Consumer price index (% change, previous year) -0.8 1.2 3.9 1.8 1.5 2.5 2.4

Public SectorGovernment balance (% GDP) -3.0 -2.5 -1.5 -1.3 -0.5 -0.8 -1.0Domestic public sector debt (% GDP)/7 18.3 18.6 18.0 17.5 16.1 14.8 14.0

Foreign Trade, BOP and External DebtTrade balance ($US billion) 44.1 44.8 59.0 134.2 170.0 174.4 345.7Exports of goods ($US billion) 325.6 438.4 593.4 762.5 969.1 1190.0 1435.0 (% change, previous year)/2 22.4 34.6 35.4 28.4 27.1 22.8 20.6Key export (% change, previous year) /3 23.9 35.8 37.0 29.0 29.1 23.8 21.2Imports of goods ($US billion) 281.5 393.6 534.4 628.3 754.0 910.9 1089.3 (% change, previous year)/2 21.2 39.8 35.8 17.6 17.9 20.8 19.6Current account balance ($US billion ) 35.4 45.9 68.7 160.8 230.0 260.0 296.8 (% GDP) 2.4 2.8 3.6 7.2 8.7 8.4 8.1Foreign direct investment (US$ billion)/4 49.3 47.1 54.9 79.1 78.3 67.0 50.0Total external debt ($US billion) 186.4 208.7 248.9 281.6 .. .. (% GDP) 13.0 12.8 12.9 12.5 .. ..Short-term debt ($US billion) 65.7 88.1 115.8 148.3 .. ..Debt service ratio (% exports of g&s) 7.8 7.9 3.4 3.1 2.2 ..Reserves, including gold ($US billion) 292.0 409.2 615.5 822.5 .. .. (months of imports of goods and services) 10.5 10.6 12.0 13.0 .. ..Total reserves excl. gold ($US billion) 291.1 408.2 614.5 821.5 1068.5 ..

Financial MarketsDomestic credit (% change, previous year, nominal) 29.3 19.6 8.8 10.7 16.3 ..Short-term interest rate (less than 20 days)/5 2.7 2.7 3.3 3.3 3.3 ..Exchange rate (end-period) 8.3 8.3 8.3 8.2 7.8 7.5 7.2Real effective exchange rate ( + = appn) 2000=100 101.9 95.2 92.7 92.5 .. .. (% change, previous year) -2.8 -6.6 -2.6 -0.2 .. ..Stock market index (Dec. 19, 1990=100), close/6 1419.1 1569.1 1330.2 1220.9 2815.1 ..

Memo: GDP (US$ billion) 1453.8 1641.0 1931.7 2243.9 2615.4 3112.0

China's Oil Production (m b/d)

00.5

11.5

22.5

33.5

4

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

Saudi Arabia 9.48Russia 9.40United States 7.61Iran 3.98China 3.63Mexico 3.42Norway 3.22Canada 3.14European Union 3.12Venezuela 3.08United Arab Emirates 2.54Nigeria 2.45Kuwait 2.42Iraq 2.13United Kingdom 2.08Libya 1.72Angola 1.60Brazil 1.59Algeria 1.37

CIA World Factbook (https://www.cia.gov/cia/publications/factbook/rankorder/2173rank.html)

Top Twenty Oil Producing Countries(million b/d)

China’s Oil Balance

Primary Energy Demand by Fuel - 2010

Coal

Oil

Gas

Nuclear

Hydro

Biomass and Waste

Other Renewables

Primary Energy Demand by Fuel - 2030

Coal

Oil

Gas

Nuclear

Hydro

Biomass andWasteOther Renewables

Region Number of Deals % of DealsEurasia 21 15Middle East 25 18Africa 37 27Northeast Asia 3 2Southeast Asia 31 22Latin America 16 11North America 6 4Total 139 100

Chinese Petroleum Companies Investments AbroadKey Countries

MongoliaIndonesia, Australia, Papua New Guinea

Venezuela, Brazil, Ecuador, PeruCanada

Russia, Kazakhstan, UzbekistanSaudia Arabia, Oman, Iram

Sudan, Angola, Algeria, Nigeria

BY THE NUMBERS: China-Africa Economic Integration

$114 billion: Value of trade between China and Africa (2010)43.5% Year-on-Year growth in two-way trade45: Number of African countries China has signed bi-lateral

trade agreements with$9.33 billion: Amount of Chinese direct investment in Africa

(end of 2009)5,000: Scholarships offered to African students by Chinese

government$10 billion: Amount of preferential loans China has

promised to African countries1 million: Number of Chinese working in Africa (100,000 ten

years ago)500: Number of infrastructure project China has financed in

Africa (end of 2009)

What Makes China an Attractive Partner?

Lots of moneyGenerous lenderSpeed of project implementationWilling to take on large infrastructure

projects (West not interested in)

Anaytical Frameworks:

A New Great Game?

A New Colonialism?

Development Paths: Washington Consensus vs. the Beijing Consensus