China and Angola

Lucy Corkin (2006) has a thorough piece on China’s interest in Angola. She states that the most important form of cooperation and joint venture exists between the Chinese oil company Oil Petroleum and Chemical Corporation (Sinopec) and the Angolan company Sonangol combined to form Sonangol-Sinopece International (SSI). Indira Campos and Alex Vines (2008) confirm the significance of Angola’s extractive industries for China. They report hat Sinopec Group has a 55 percent stake in the joint venture and Sonangol has 45 percent. Between 2005 and 2006, nine cooperation agreements were signed and SSI bought three new Angolan offshore oil blocks with reserves of 3.2 billion barrels. However, negotiations fell through in 2007. Sonangol declared independence and SSI gave up he three newly acquired negotiations.

According to Pambazuka News (2009), “Luanda has made no secret of its efforts to diversify is portfolio of investors, ensuring that no one partner becomes too powerful in the oil industry. Consequently, Chinese efforts to secure oil equity in Angola have proved less successful than Beijing’s original expectations, and the Western oil majors still predominate.”
Angola has a population of 14 million, about half of the population residing in Luanda. Oil production accounts for 52 percent of the country’s $24 billion economy (Corkin 2008). Diamonds and oil account for 95 percent of Angolan exports. China has played a particularly important role in post-conflict reconstruction for a civil war that lasted from 1975 to 2002.
F. Ugboaja Ohaegbulam in U.S. Policy in Postcolonial Africa argues that the conflict began as a postcolonial struggle, which evolved into a civil war.
The roots of the conflict lay deep, first in Portugal’s imperial policy and practice in Africa. Second, they lay in the struggle for control of state power among Angola’s three national liberation movements immediately after Portugal was compelled to conceded independence in the wake of a military overthrow of its civilian government in Lisbon in April 1974. The struggle became complicated by external forces — the dynamic of the Cold War and the security interests of South Africa’s white minority government, which sought to perpetuate its rule in South Africa and Namibia as well as its hegemony in the whole of southern Africa….The perceived threat to the security interest of he white minority government of South Africa expanded the scope and duration of the war. The third root of he conflict was the ideological conflict for world hegemony between the United States and the Soviet Union….
Ohaegbulam (2009) continues, arguing that Portugal was run by authoritarian rulers who used brutal force to weed out critics of the colonial government and justified this on the basis that they were civilizing the people of Africa. Anti colonial struggles lasted for 13 years from 1961 to 1974. By 1975, when all parts of the empire was becoming independent, chaos arose in Angola and Portuguese authorities fled, refusing to take any action to control the chaos. “The factions in the struggle for succession in Angola — the popular Movement for the Liberation of Angola (MPLA), the National Front for the Liberation of Angola (FNLA) and the National Union for Total Independence of Angola (UNITA) — were initially national liberation movements which sought to remove Portugal’s imperial presence,” but they were unable to unite. Not only were they ideologically and ethnolinguistically divided, but they became divided based on the external support they received in the midst of the Cold War — one faction receiving support from the Soviet Union and the other receiving support from the US. “Thus, to perpetuate a status quo in southern Africa that favored the Western powers, the United States, under Gerald Ford administration, collaborating with President Mobutu Sese Seko of Zaire and the white minority government of the Republic of South Africa, covertly supported an alliance of the FNLA and the UNITA against the Soviet-and Cuban-backed MPLA. The MPLA, which had already proclaimed itself the government of Angola (on 11 November, 1975), won an indecisive victory in February 1976 against its rivals.” As war continued, corrupt acts by the MPLA government persisted. UNITA rebels committed atrocious acts against anyone who was considered disloyal. The People’s Republic of China (PRC) established diplomatic ties with the MPLA since 1983. When Moscow supported MPLA at one point, the PRC turned to UNITA to forge alliances.

The consequences of war were devastating. Not only did the war deplete the overall labor force, especially in the rural areas, but destroyed peasant households and agricultural production. What was once a self-sufficient sector now depended heavily on imported food aid. Conditions were further exacerbated by the actions of UNITA rebels. They cut off road transport, obliterated bridges and prevented rail traffic and used infrastructure to smuggle diamonds to purchase weapons. The author estimates that $10 million worth of diamonds were smuggled every week through Zaire and $1 billion spent every year to buy weapons from the Soviet Union. Infrastructure that had been destroyed during the war is now being reconstructed and rehabilitated by the Chinese. It is estimated that $211 million loan has been given to build roads destroyed during the civil war. Campos and Vines (2008) maintain that Angola’s developmental needs are tremendous and the involvement of Portugal and Brazil in doubling their credit lines to help Angola rebuild its economy demonstrates that China is not the dominant contributor. The US at one point had been the major importer of Angolan oil, but that has since shifted to China and South Africa. Still, Chinese FDI is small in comparison to Western FDI, with Portugal taking the lead.

The number of Chinese living in Angola has increased, but as of 2005, the Portuguese comprised the main foreign labor force. In 2006, there were an estimated 15,000 Chinese with work visas living in Angola. In 2007, the number increased to 22,000. Most of the Chinese are low-paid migrant workers who will return home after their one to two year contracts end. They live in isolated, closed compounds, “often at the site of actual construction”. The authors also report that “those workers earn a very low salary and therefore lack the financial ability, language skills, and contacts to establish their own businesses in Angola” (Campos and Vines 46). However, given that over half of the population in Angola are jobless, the influx of Chinese workers may fuel resentment and contribute to future controversy. The authors mention that Chinese companies garner 70 percent of the contracts, which means only 30 percent of Angolans get contracts. However, it seems with the focus on rebuilding quickly, the Angolan government has favored Chinese companies over domestic ones by giving them over 70 percent of the contracts. Furthermore, since the Chinese also prefer to hire their own workers and have brought up issues about the standards of local workers and contractors, many locals have no benefited from anticipated levels of employment that the Chinese were expected to provide.

The authors also make the excellent point that there is a need for mutual understanding that is absent in work-related interactions between the Chinese and Angolans. The Catholic University in Luanda opened a research quarter for studies on China-Africa relationship. There is still little historical, cultural and linguistic knowledge between China and Angola. Chinese researchers are beginning to recognize the importance of Angola and other African countries, but the concern is that “China’s intellectual capacity to analyze the country has not increased” and therefore, this “highlights a serious sociocultural deficit for promoting a more realistic understanding of nonelite bilateral relations” (46-47).

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