Chinese and the Horn of Africa

News from the Horn of Africa is diverse and found along many paths. To start, US troops in the Ogaden area rescued two abused and endangered cheetah cubs late last month (Nov 2005) while the Taipei Times is reporting the Chinese navy is "flexing its soft power" as part of an "assertive foreign policy...connecting Chinese seaports with the Middle East and the Horn of Africa. Its strategy: to build up sea power, measured in ships, bases and alliances. Energizing a populace accustomed to thinking of China as a land power is one crucial element of Beijing's new maritime diplomacy." The sea-based public diplomacy is integral to Chinese expansion in the Middle East region as Iran seeks to seal a deal with China next month (Jan 2006):

Iran is looking to export liquefied natural gas (LNG) to China for some 30 years when its exports of the supercooled fuel hit world markets in 2009. The overall value of such a contract is estimated at more than $70 billion....In return, China would take a large upstream stake in the giant Yadavaran oilfield in southern Iran.

So what does this mean for the Horn of Africa, including the resilient Somalia the disastrous Ethiopia? Plenty as Eritrea and Ethiopia face off with hundreds of thousands of troops along their common border in a conflict "once described as so pointless that it was like two bald men fighting over a comb" (with Sundanese/Eritrean allegations of a "contradictory standard" in UN/US treatment of the "real aggressor" Ethiopia) and the Chinese start drilling an exploratory well in Gambella (western Ethiopia) that Chevron apparently mapped out in 1983. Do Chinese energy "grabs" and Somalia and TopCat having something in common?

Block_5b_1Besides the Gambella (western Ethiopia) exploration and drilling for natural resources in the region by the Chinese (actually a subcontract under Petronas) there is the Malaysian project "starting next year" further west in Muglad Basin, southern Sudan, referred to as Block 5B. This project, and others, will further the Chinese penetration into the region through soft power. Growing Chinese cultural expansion through the use of Chinese language in the fields instead of English, expansion of Chinese TV into the region, growing positive use disciplined Chinese military forces participating in UN Peacekeeping missions, and building what the local societies want (compared to what the bureaucrats want) clearly further Nye-based soft power arguments the Taipei Times suggests.

It is worth reviewing an extract from my my 2 Dec 05 posting on the region's oil projects and players:

The Zhongyuan Petroleum Exploration Bureau (ZPEB), a powerful subsidiary of China's second largest national petroleum consortium, the China Petrochemical Corporation (SINOPEC), appears to be the principal oil firm operating in Gambella at present, under subcontract to Malaysia's national oil company PETRONAS. The base camp for ZPEB equipment and petroleum explorations is located approximately 1.5 kilometers from the center of Gambella town on the Abobo-Gambella road. The Ethiopian site manager, Mr. Degefe, is a highlander who tersely describes himself as "responsible for making all operations and security." The base camp is under tight security and heavily guarded by EPRDF troops. PETRONAS and the China National Petroleum Corporation currently operate in Sudan. A recent report by Human Rights Watch raises charges that the Asian oil giants have provided cover for their respective governments to ship arms and military equipment to Sudan in exchange for oil concessions granted by Khartoum. [emphasis added]

China reportedly receives 28% of its oil from Sudan, Congo, and Angola and is looking to solidify and expand this claim in a "scramble" for resources:

Chinese companies are charging into Africa's oil sector, snapping up partnerships in Nigerian and Angolan offshore blocks, building facilities and pipelines in Sudan and prospecting in Mali, Mauritania, Niger and Chad...."They're everywhere, they're really going for it."

This will put the pressure on the Gulf of Guinea and the Horn as the competition between the US and China intensifies in the coming year. China is no doubt considering the US military and diplomacy weakened as a result of the Iraq War (is it still called that when it's Saddamists nee Insurgents we're fighting?) and US internal security politics. Chinese regional public diplomacy programs are apparently in full swing according to Reuters (15 Dec 05) [emphasis added]:

In Sudan...Chinese state firms have taken a major stake in the oil sector, building a refinery in Khartoum and heavily involving themselves in production.

In Angola too, where some international lenders have balked at putting up funds, China has weighed in with a $2 billion infrastructure loan program linked to oil deals in what Chinese diplomats call "a model of cooperation."

"I think they come with more offerings," said Wood Mackenzie's O'Rourke, saying the Chinese were able to sweeten their investment bids with state aid and cooperation projects, such as rebuilding Angola's war-ravaged railway network.

China's Sinopec company has been allowed to buy into two Angola blocks previously held by European oil majors.

Although U.S. giants like Chevron and ExxonMobil have huge investments in Angola, where their deep-water expertise is still much needed, China has now displaced the United States as the country's biggest oil customer.

"It's much more difficult for ExxonMobil to say 'we'll build you a railway'," said Clearwater's Goldman.

In Nigeria, the China National Petroleum Corporation (CNPC) is in talks over a possible deal to take over a refinery and get preferential terms in return on some oil exploration blocks.

In Equatorial Guinea too, western companies' dominance over the oil sector may not last forever. The country's president, Teodoro Obiang Nguema, offered China investment opportunities during a visit to Beijing in October.

Returning to the Chinese public diplomacy in the region, besides providing television programming, the Chinese are hitting at the local hearts and minds by building sports stadiums:

At week's end there was still more evidence of China's public diplomacy and economic expansion here. In an interview published on Dec. 15, Zambian trade minister Dipak Patel said, in passing, that the Chinese government had offered every country in southern Africa funding for a new sports stadium or a new government headquarters building.

"Most countries chose the stadium," Patel told the Financial Times. He said he chose the office tower.

Why can't we do that? See more on Chinese public diplomacy in the region in what is clearly shaping up for a confrontation between Western and Eastern interests in contrast to Huntington's Clash of Civilizations oversimplifications and misdirections.

Howard French posted an Asia Times article that talks directly to the soft penetration of China into Africa, including the displacement of the Japanese as #1 African oil importer, and expands this discussion even further.