NEWS that two of China’s largest oil companies, Sinopec and CNPC, are going to scale down their presence in South Sudan provides the latest evidence of China’s waning appetite for African oil, writes Eric Olander.
This isn’t a new phenomenon. In fact, Chinese demand for African oil has steadily declined for more th
an a decade. In 2008, three African countries made up a third of all Chinese imports. By 2018, according to George Washington University China-Africa scholar David Shinn, only one African country, Angola, was still a major source of oil for China, and it accounted for just 18 percent of its total imports.
No doubt, that number is even lower today.
The fact is, China bought a lot of African oil in the early and mid-2000s because it was convenient and Beijing didn’t have as many options as it does today. Now that Russia, Saudi Arabia, Iraq, and even Iran to some extent, have become China’s main suppliers, African producers in places like the Republic of Congo, Angola, and South Sudan are just not as attractive as they used to be.
This shift is most evident in Saudi Arabia, where China last year increased its oil purchases by an impressive 47 percent, putting the kingdom regularly atop the standings of China’s largest oil suppliers.
There are real geopolitical consequences of China’s newfound reliance on Persian Gulf and Russian energy providers
. Most African exports to China are made up of raw materials, mostly timber, minerals, and oil. When crude is stripped out of that equation, it diminishes Africa’s economic importance to China.
Politically-speaking, though, it’s a very different story.
We’re already seeing China’s growing reliance on African diplomatic support in international bodies like the UN, WHO, and FAO to push back against critics in the US and Europe. On a range of issues from Huawei to Hong Kong, African political support has been instrumental in China’s broader diplomatic agenda. This trend will likely continue in the years ahead.
After discussions with various African stakeholders, particularly those from oil-producing countries, I get the sense that they may not fully appreciate the magnitude of the shift that’s taken place — that their oil is now far less valuable to China than their country’s votes at the UN.
African policymakers are now going to have to consider what a world looks like where they can no longer depend exclusively on selling raw materials and instead have to figure out how to leverage their geopolitical position as an important new currency.
It’s not going to be easy to change centuries-old economic behaviour but they really don’t have a choice.
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