Chinese Investment in South Sudan

From Oil4All
Jump to: navigation, search

History

China established relations with the Sudan in 1959 and became actively involved in the oil sector in the 1990s.[1] The imposition of economic sanctions on Sudan by the United States in 1997, according to the Civil-Military Fusion Center, allowed China to gain a virtual monopoly over the country's oil industry. Prior to South Sudan’s independence, China owned multi-billion dollar investments in Sudan that were predominantly concentrated in the oil sector, giving China an estimated 60% share (490,000 barrels per day) of Sudan’s daily production. In 2011, after the secession of South Sudan, about 66% of the two countries' total production was exported to China.[2]

Managing tensions between South Sudan and Sudan

Since South Sudan's independence, China has attempted to maintain good relations with South Sudan, which acquired the majority of the region's oil production after its July 2011 secession, without upsetting relations with Sudan, a long-time ally.[3]

The South Sudanese acting charge of affairs in Beijing called China a "significant coordinator" between South Sudan and Sudan, according to news agency China Daily, which quoted the official as saying "China, an old friend of Sudan and a new strategic friend of South Sudan, is playing a significant role mediating between the two countries."[4]

Tension along the border has threatened China's its relations with both Sudans, according to an Al Jazeera video on the topic in April 2012. As Juba, the capital of South Sudan, has attempted to pull China south, away from Khartoum, it has been frustrated by Chinese companies' conduct in the oil sector, and by China's continued support for Sudan's military through arms sales.[5]

Imbalance in investment in two Sudans

Despite significant Chinese-backed development projects in north Sudan, South Sudanese civil society activists have contended that such projects in their country are not yet comparable in scale. One activist in Unity state said, according to the UK non-governmental organization Saferworld, “In the South, China has done almost nothing compared to what it has done in the North – in terms of roads, infrastructure and agriculture.” Another Unity state activist echoed these claims: “[China] say they have built things – hospitals and schools – but this is in the North, not in the South. They have built a computer laboratory at the University of Juba – it is a start, but more is needed.” [6]

Some of China's projects in South Sudan, such as a $760,000 investment for a hospital in Bentiu, Unity state, have come under fire for catering mainly to the elite. Informants interviewed by Saferworld in Unity state in August 2011 pointed out that the hospital was not a gift but a business, and that it would provide medical services for fees that most local people were unable to afford.[6]

Infrastructure and development investment

However, Chinese officials have enunciated China's intention to increase investment in physical infrastructure, hydroelectric energy, agriculture, health, education and other sectors in South Sudan, as reported in the Sudan Tribune in June 2011.[7] In light of this, a Chinese company, Pan-China Construction Group, was in October 2011 awarded a lucrative contract to design Ramciel, the proposed location for South Sudan’s new capital, to be situated about 105 kilometers north of Juba, the country’s current capital.[8] Also planned are Chinese programs to develop existing state capitals in South Sudan, as well as other projects to construct hospitals, schools and agricultural processing facilities for locally produced meat and rice, according to Saferworld. In March 2011, South Sudan's Ministry of Agriculture and Forestry and the Chinese construction firm Beijing International signed an agreement to enhance agricultural technologies and techniques in South Sudan.[6]

In October 2011, China granted South Sudan US $31.5 million for development projects.[9] China Daily estimated in June 2011 that Chinese investment in South Sudan over the past six years totaled between $60 million and $100 million, largely in construction projects to build schools and hospitals and digging wells.[10]

Loan announced in April 2012

Government officials in South Sudan said in April 2012 that China had agreed to loan it $8 billion for major development projects, including roads, bridges and telecom networks, and to develop agriculture and hydroelectric power. There was no mention of plans to build a new pipeline to export oil from the newly independent state, according to the BBC.[3]

South Sudan's information minister, Barnaba Mariel Benjamin, told the BBC that the Chinese wanted to help develop the country and that there were "no strings attached". The Chinese funding would be provided over the following two years, and projects would be conducted by Chinese firms.[3]

South Sudan's President Salva Kiir visited Beijing also in April of 2012, according to the Christian Science Monitor, to tighten economic links to China, traditionally a close ally of Omar al-Bashir, the President of Sudan.[11]

References

  1. "China's New Courtship in South Sudan" International Crisis Group, 4 April 2012.
  2. "Sudan and South Sudan’s Oil Industries: Growing Political Tensions" Civil-Military Fusion Center, May 2012.
  3. 3.0 3.1 3.2 "South Sudan 'agrees $8bn deal with China'" BBC News Africa, 28 April 2012.
  4. "Beijing's mediation praised in Sudan, S. Sudan issues" China Daily USA, 29 May 2012.
  5. "Sudan tensions imperil China's investments" Al Jazeera, 7 April 2012.
  6. 6.0 6.1 6.2 "China and conflict-affected states" Saferworld, January 2012.
  7. "China to expand investment in South Sudan after independence" Sudan Tribune, 1 June 2011.
  8. "Chinese firm wins contract for S. Sudan’s new capital" Sudan Tribune, 28 October 2011.
  9. "China grants South Sudan $31.5m for development projects" Sudan Tribune, 24 October 2011.
  10. "China keen to foster south Sudan ties" China Daily, 5 June 2011.
  11. "On trip to China, South Sudan's leader warns of war with Sudan (+video)" The Christian Science Monitor, 24 April 2012.