China-Japan oil rivalry spills into
Africa By Joshua Eisenman and
Devin T Stewart
China and Japan - the two
giants of East Asia - are competing for energy
resources around the globe. Their rivalry in the
East China Sea, Russia, Central Asia and Southeast
Asia has been well documented. Yet little has been
written in Washington about the impact of
Sino-Japanese rivalry in Africa.
With
one-third of its top 15 oil suppliers in Africa,
the United States ignores the challenges of this
geopolitical dynamic at its peril. As the world's
largest consumer of energy and protector of the
sea lanes, the United States plays a critical role
in ensuring the free flow of this important
commodity.
Currently the United States'
top two foreign policy objectives are combating
global terrorism and promoting democracy around
the world. In Africa and Asia, the number of
democracies has
increased dramatically over
the last 25 years. While some policy experts, such
as Francis Fukuyama, argue that strong Chinese
economic growth has underpinned democratic
transformation in Asia, other experts have
identified potential problems emerging from
Beijing's search for energy resources in Africa.
A former US ambassador to Nigeria and
South Africa, Princeton Lyman, recently asked,
"Does China want to be seen in Africa as the
defender of rogue states, the more aggressive
seeker of Africa's natural resources, without
regard to transparency, development and stability
there?"
Last year, China displaced Japan
as the second-largest importer of African oil
after the US, according to The Economist
newspaper. Despite falling total petroleum
imports, Japan's African supplies grew by nearly
20% in 2004. Over the same period, Chinese imports
grew by more than 35%.
Tokyo's approach to
its relationships in Africa includes an emphasis
on democratic reform and human rights. In 2002,
Japan's task force on foreign relations for the
prime minister argued, "Bringing about democracy
and good governance in Africa is essential for
world stability and prosperity." Japan has also
supported elections in Nigeria and in the
Democratic Republic of Congo and funds African
rule of law and human rights initiatives. For
instance, last month through the United Nations'
Trust Fund for Human Security, Japan donated more
than $2 million to provide training on
international humanitarian and human rights law to
African Union Mission troops in Sudan.
Japan and African nations have not always
agreed at the UN, however. A bone of contention
has been UN Security Council reform. Japan is part
of the G-4 that includes including Germany, Brazil
and India. Differing G-4 and African proposals
have been a source of disagreement for Japanese
and African interlocutors. For its part, China
supports Africa's position on Security Council
reform and opposes Japan's membership.
In
order to secure supplies, Beijing seeks to gain
control of African oil at its source. As a result,
China's strategy is heavily dependent on bilateral
ties to oil-producing states. Beijing's
cultivation of relationships with Africa elites
facilitates its state-owned oil companies
exploring, securing, extracting, processing and
shipping African crude.
Africa nations
including Sudan, Chad, Libya, Nigeria, Algeria,
Gabon and Angola supply China with about 25% of
its imported oil. Although individually these countries
make up a modest share of Chinese imports,
Beijing's purchases are a significant share of
African oil producers' exports. Beijing imports a
quarter of Angola's oil, 60% of Sudan's and an
increasing percent from Equatorial Guinea, Nigeria
and Gabon. These are poor countries and petroleum
exports account for a sizable part of gross
domestic product in each. As such, the effect of
China's approach on these countries domestic
political and social development is significant.
In Sudan, Beijing's financial and military
support for the Khartoum government during its
civil war and genocide in Darfur coupled with
Chinese attempts to water down UN resolutions
targeting Sudan have been roundly criticized in
Western capitals.
In Angola, Chinese loans
and aid packages have undermined attempts to
improve government transparency and corporate
governance in the oil sector. The majority of
Angola's roughly 13 million people live in
poverty, and elites have siphoned off much of the
nation's oil wealth. As part of a larger package
in March 2004, China provided Luanda with more
than $2 billion in loans in accordance with its
principle of non-interference in countries
internal affairs. Just last week Jose Pedro de
Morais, Angola's finance minister, said he
expected future Chinese loans would exceed $2
billion, adding "when we ask our Chinese
counterparts if they are willing to provide more
loans, they say yes." [1]
Beijing's loans
are oil-backed and many are targeted at
infrastructure projects that facilitate
development of the petroleum industry. Chinese
capital has encouraged Angola to refuse
International Monetary Fund (IMF) loans that would
require the country to open its books to
independent scrutiny and reveal and reform the
poor African nation's corrupt leadership. Given
growing US dependence on African oil imports and
the importance Washington places on democracy
promotion, policymakers must consider the effects
of China's strategy on African suppliers.
China's methods in Africa are not lost on
the Japanese media. In February, the Yomiuri
Shimbun reported that China is accelerating its
search for oil in Africa, and in an August
editorial, the Sankei Shimbun warned that China
chooses to do business with supporters of
terrorism and anti-democratic African states.
But for Washington, the challenge of
energy security goes beyond Africa. If disputes
over energy resources disrupt trade and
investment, Asian economic growth would be
undermined and the ripple effect would be felt all
over the world. Tensions, such as those in the
East China Sea, could escalate into real conflict,
putting the United States in an awkward position
between its closest strategic ally and the
region's rising economic power. Washington would
be well served to seek collaboration with Beijing
and Tokyo in an effort to ensure energy supplies
for importers while encouraging exporters'
accountability and good governance.
This
collaboration would seek to achieve a
standardization of procedures designed to avoid
disruption in the supply of oil, further develop
alternative energy and energy-saving measures,
minimize the cost of extraction and risk of
conflict, and maximize the benefits by working to
improve transparency and good governance in
oil-producing states. As the world's top three oil
importers, the US, China and Japan have an
opportunity to avoid conflict and underscore the
importance of accountability in energy suppliers
in Africa and throughout the developing world.
In its annual report to Congress, the
US-China Economic and Security Review Commission
recommended the formation of a US-China energy
working group to mirror the successful US-Japan
energy working group. This would be a positive
first step for the president to explore during
this week's meetings with the Chinese and Japanese
leaders.
Joshua
Eisenman is the co-editor of China and the
Developing World: Beijing's Strategy for the 21st
Century and author of the book's chapter on
China's strategy towards Africa (M E Sharpe 2006).
Devin Stewart is Fellow, Office of the
Japan Chair, Center for Strategic and
International Studies (CSIS) in Washington,
DC.
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