People's Republic of China today is the largest natural resources consumer of the world. With large consumption of the resources, the country can sustain its massive economic and ensure the rapid growth of it. Africa, with rich resources that has not been completely explored, has become the new target for China's needs of resources. China has been rapidly expanding its interest and ties with the continent of Africa recently. Many current scholars and diplomats are very suspicious of the Chinese intention in the region. The Chinese has increased its cooperation with the Africans on many levels and the most significant one is the Chinese oil interest in the area.
It is important to point out that China import about 47% of its oil from the Middles East and about 30% from Africa. But unlike Africa, Middle East is a region constantly involves in conflict. More importantly, there are too many other superpowers involved in the region that are also seeking natural resources, and many of them have already built a strategic relationship with the nations in the area before China. Africa, on the other hand, is a region that is in need of economic development. But the Western developed nations can always provide the most efficient support to these countries. China, however, can always provide the most immediate and mostly positive response to the needs of the African nations. Thus, the African nations prefer to do business with the Chinese, providing the opportunity for further economic interaction between China and Africa.
The significance of the expanding China-Africa oil ties is that oil as a strategic resources, can provide China an increased military strength. Moreover, China is using is oil ties to increase its investment in Africa. Africa, at the same time, has a very positive attitude for the investment from China. With increased business and economic interaction, there will also be more interaction at political level to generate more economic opportunities. If China and Africa is getting closer and closer internationally, would it actually form a new powerful political entity? Today, we have United States, the EU, the Russians, the Arabic world, and other superpowers. If China and Africa build up a stable alliance to face any international difficulties or opponents, its power can hardly be matched with any other current superpowers as the Sino-African alliance would have a dominant power in numbers. For example, without the support from the African nations, China would not be able to replace Taiwan to become one of the five permanent member of the UN Security Council. The number generate huge power for both China and Africa and the essential thing that might form this alliance would be the oil. Oil means further investment, further investment means more economic interaction, more economic interaction means increased political interaction, and the more political interaction generates the possibility of a Sino-African alliance. Therefore, to predict the possible future of the international politics, the Chinese oil interest in Africa is a very significant factor that cannot be overlooked.
China expanded its economic growth in the last decades and its need for energy increased. One question is for how long this growth will continue and no one can answer this today. For sustained economic growth, institution matters because it shapes incentives for economic actors. Resources can allocate through markets or hierarchical bureaucrats. Hierarchal means or the command economy has no future that proved by the Soviet block. Resources in China barely allocated through markets. Market allows knowledge to be utilized in most efficient means possible, which leads to discoveries of new things. People thrive to uncover new finding because of the guaranteed rewards for their results. For sustained economic growth as well as political power, China need to invest and improve its institutions rather than oil exploration. If China gets its institution right, oil will knock her doors itself and no need to find itself in middle of nowhere looking for oil.
ReplyDeleteVery interesting! Thank you for explaining it in a way that is easy to understand for people not familiar with the topic - such as myself. What isn't exactly clear to me is why African nations prefer to do business with the Chinese? Can you expand on this in your next post? Does the United States import oil from Africa as well? If so, how much? Can you elaborate on what you mean when you write that China can provide the mostly positive response to the needs of the African nations? Sorry for asking questions that might seem like common knowledge but I am eager to learn more about your topic.
ReplyDeleteVery informative! I think something I would also look at it why there are so many governments that allow for China to enter. If you look at African governments many of them have leaders that are corrupt, because there is no correct distribution of wealth to it's people. So if the Chinese can employ the people of these African countries for a cheap price, and basically get also all of these natural resources for a cheap price. Oil isn't only the only natural resource they are getting, because the Chinese are in Angola, Zambia, and Tanzania, where they get valuable resources for a low cost. So it does raise a lot of ethical questions for the governments. Like you said not only does this benefit the Chinese economically, but politically as well because of the alliances, but territory they gain.
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