Sino-Africa oil trade doesn’t indicate Sino-Western energy conflicts
Name:Zhang Xiaomei Student ID：s07568
Research paper supervisor:Dr.Seku Conde
Minzu University of China
2007-2008 Academic Year
Abstract: With the fast development of Sino-Africa coorperation, Sino-Africa oil trade increase quickly. As a result, some western governments and experts think that Sino-Africa growing oil trade in resent years indicates Sino-Western energy conflicts. In order to correct their prejudice, I decide to write this paper. In my opinion, the growing oil trade will not threaten any country’s benefit. In the paper, I use example, facts, quotation, data, comparing to testify my opinion. At last, my conclusion is that Sino-Africa oil trade is only Sino-Africa oil trade, and it will not threaten western countries’ benefit. China will not tyrannize in the future when China became a powerful country.
Key words:
Africa China oil trade natural resource energy
Introduction
In resent years, Sino-Africa trade increase quickly. In 1999, the total Sino-African trade volume was US$6.5 billion However, by 2005, total Sino-African trade had reached US$39.7 billion and it reached US$55 billion on 2006, making China today one of the top three largest trading partners of Africa. (Source :http://www.answers.com/topic/sino-african-relations)
And oil trade is the biggest part of it. Then, some people, especially the western experts think China will bring energy conflict with western countries. They preach that China will threaten international energy security.
1. Introduction about Africa oil
Sub-Saharan Africa is home to eight oil exporters: Nigeria, Angola, Congo-Brazzaville, Gabon, Equatorial Guinea, Cameroon, Chad, the DRC and Sudan. Nigeria is the largest producer in Africa and 11th in the world. Angola is the second-largest, with production expected to reach 2 million barrels per day by 2008. Sudanese production and export has risen rapidly in the past few years despite internal unrest in Dar fur, although output dropped back a little last year. Sub-Saharan Africa has about 7% of proven world oil reserves. Of the 8 billion barrels of oil reserves discovered by prospectors worldwide in 2001, 7 billion were in the fields off west and central Africa's Atlantic coast. The US is the largest importer of African oil, with China second.
(source: Scramble for Africa Mandy Turner May 08, 2007 )
2. Sino-Africa relation and oil trade
2.1 The relation
In recent years, the People’s Republic of China has built increasingly stronger ties with other African nations. As of August 2007, there are more than 750,000 Chinese nationals working in different African countries. On November 3, 2006, China hosted a Forum on China-Africa Cooperation Summit in Beijing with the leaders of 48 African countries designed to cement its economic and political influence in the continent. Over 2000 business were being negotiated at the time. At the opening of the summit, President Hu Jintao stated China would offer $3 billion in preferential loans and $2 billion in export credits over the next three years. China announced that it would double its foreign aid though it did not offer details
In early February 2007, President Hu Jintao completed an eight-country tour of Africa. The countries visited were Cameroon, Liberia, Sudan, Zambia, Namibia, South Africa, Mozambique and the Seychelles.
(source: Is China Africa's best friend? African Business,May 2006 by Versi, Anver)
2.2 The oil trade
Within the next five years, Chinese trade with Africa is predicted to reach $100 billion per year. Much of this springs from China's growing expansion into Africa's oil markets. China now gets between 25 and 30% of its oil from Africa. Please look at the following data:
Top Ten African Trade Partners with China, 2004 (by imports)9
China’s imports from: Percent of Sino-African trade
Angola 3,422.63
South Africa 2,567.96
Sudan 1,678.60
Congo-Brazzaville 1,224.74
Equatorial Guinea 787.96
Gabon 415.39
Nigeria 372.91
Algeria 216.11
Morocco 208.69
Chad 148.73
Total 11.043.72
(Source: Unpacking China’s Resource Diplomacy in Africa By Ian Taylor)
3. Western opinion
Taking into account Sino-Africa relationship and prosperous oil trade, some western governments and experts think that Sino-Africa growing oil trade in resent years indicates Sino-Western energy conflicts.
Brian Smith said:“Trade between China and Africa jumped 39 percent to $32.17 billion in the first 10 months of 2005, and mainly fuelled by increased oil imports . source: China’s growing trade with Africa indicative of Sino-Western energy conflicts By Brian Smith 24 January 2006) The rate of increase in Sino-African trade could see China threatening the United States’ predominant position in the next period.” In 2003 China overtook Japan to become the world’s second largest consumer of oil after the US. Demand is increasing rapidly and its oil consumption is growing by 7.5 percent per year, seven times more than the US. China’s energy needs accounted for 40 percent of the total growth in global oil demand over the past four years. It currently imports about one third of its consumption, but is projected to import two thirds by 2025. (source: China’s growing trade with Africa indicative of Sino-Western energy conflicts By Brian Smith 24 January 2006)
By 2010 China is expected to have 90 times more cars than it had in 1990, and is projected to surpass the total number of cars in the US by 2030. China is also attempting to increase and diversify supplies, particularly away from the Middle East, where it currently sources about 58 percent of it oil. Areas of interest include Russia, the Caspian Basin, the Americas, the East China Sea and particularly Africa.
Last year China displaced Japan as the second largest importer of African oil after the US, which currently imports about 15 percent of its oil from Africa. China first established a presence in Sudan’s Muglad oilfields 10 years ago, and filled the vacuum when the US broke diplomatic ties with Sudan in 1997. Currently between half and 60 percent of Sudan’s oil exports go to China, amounting to around 7 percent of China’s imported oil.
Energy is China’s main concern and over the last few years it has struck or expanded on existing oil deals with Angola, Algeria, Chad, Equatorial Guinea, Gabon, Nigeria and Sudan. Africa now supplies around one quarter of China’s energy imports. Trade between China and Africa jumped 39 percent to $32.17 billion in the first 10 months of 2005, fuelled by increased oil imports and the export of Chinese goods, largely textiles. This follows rises of 59 percent in 2004 and 50 percent in 2003.
The rate of increase in Sino-African trade could see China threatening the United State’s predominant position in the next period. US-Africa trade was $44.5 billion in 2004.
Mandy Turner said:“The 19th-century scramble for Africa saw the great powers rush to control land so they could exploit natural resources. Today, there is a new scramble for Africa taking place, and the continent has again become a vital arena of strategic and geopolitical competition between the United States, France, Britain, China and India. The new entrant to the scramble is China.” Within the next five years, Chinese trade with Africa is predicted to reach $100 billion per year. Much of this springs from China's growing expansion into Africa's oil markets. It is argued that Chinese oil diplomacy in Africa has two main goals: in the short-term to secure oil supplies to help feed growing domestic demand back in China; and in the long-term, to position China as a global player in the international oil market.( Source: Is China Africa's best friend? African Business, May 2006 )
4. Chinese view
It is true that Sino-Africa relation is intimate and the oil trade is more and more prosperous in resent years, but it does not mean that there will be energy conflict between China and western countries. There are many facts could support this words.
4.1 many oil trade partners
Please look at the following diagram:
49% middle East
23% Africa
17% Asia and Pacific
11% Europe and middle Asia
(Source:Research on the Situation of Chinese Petroleum Security and Strategic Choice)
It means that the partners of Chinese oil trade are not only Africa countries but also other countries and areas .and there is only 23 percent oil exported from Africa. Almost half of oil exportation exists in Middle East. Meanwhile, China is expanding her oil trade with Russia and other countries such as some countries in Latin America.
4.2 Chinese technology of oil exploitation is top-ranking.
Meanwhile, China is trying her best to exploit more oil in her own territory. For example, Chinese government attaches importance to enhance oil recovery in oil exploitation. Now, let’s introduce The Enhanced oil recovery proces: An improved portable, versatile, modular, above-ground system and process for generating combustion gases, principally nitrogen and carbon dioxide, and steam, for removing particulate matter and corrosive components from the combustion gases, and for injecting the purified nitrogen and CO2, and steam, individually or in selected mixtures, at controlled temperatures and pressures into a subterranean formation bearing hydrocarbons to enhance the recovery thereof. The system includes a high-pressure combustion reactor for efficient generation of combustion gases at the required rates and at pressures up to about 8000 psi and temperatures up to about 4500° F. The reactor is water-jacketed but lined with refractory material to minimize soot formation. Combustion chamber temperature is reduced to a safe level by water injection with the fuel.
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