2.3. A Review of Knowledge Gaps 1. China-Africa Relations
2.3.2. China-Angola relations
From a win-win perspective, the study of Kiala (2010) titled “China-Angola aid relations: Strategic cooperation for development?” explores the China-Angola aid relations. The undertaking of Kiala’s study was motivated by China’s aid that does not conform to the terms and standards of the Organisation for Economic Cooperation and Development (OECD) and Development Assistance Committee (DAC); which Beijing is not a member of. Firstly, in admission, Kiala has observed that Angola is at the centre of Chinese activity in the African Continent as poverty remains rampant in Angola whilst it is the largest African oil-exporting country. This study has instituted China’s emergence in the international donor community and how it has reconceived the aid parameters in Africa by indicating that, unlike the OECD that financially assists Highly Indebted Poor Countries (HIPCs), China also seeks to engage in the provision of aid to the Less Developed Countries (LDCs). Equally, most of the concessional loans from China are furnished by its Export-Import Bank (Exim Bank) going along with subsidy interest provided by the Chinese Ministry of Commerce.
This is followed by a strong quantification of Chinese aid to the African country around the reconstruction of the latter, especially of electrical systems in Namibe, Tombwa, Lubango and Luanda and different themes that were attached to the aid. Kiala (2010) also examined the risks of the credit line motivated by China in Angola which includes major concerns around China’s non-adherence to its policy of non-interference and condition of free loans as there are considerable risks attached to China’s unlimited credit to Angola. Despite its contribution to the current study, Kiala’s research article did not locate China’s historical relations with Angola nor provide a broader examination of the Chinese Belt and Road initiative.
From a Neo-Colonialism perspective, Khodadadzadeh's (2017)’s Master of Arts dissertation titled “China in Africa: A Modern Story of Colonization? A Case Study of China’s engagement in Angola” engages a descriptive analysis of China’s international relations with Angola and examines if there were any features of Neocolonialism between the years 2000 to 2017. The operationalisation of the concept of
15
neocolonialism into the five dimensions including economic influence, political interference, military appearances, culture/education reinforcement and financial dependence were done to understand how China is recolonising Angola. The adoption of Neo-colonialism itself as the established theoretical framework is understood better by Nkrumah who says that it consists of countries that are officially independent but still are economically dependent on the adopted political policy that is influenced by foreign economic and political forces. This is evident in his book “New Colonialism:
The Last Stage of Imperialism” (Nkrumah 1965: 7; Khodadadzadeh, 2017: 13).
Although Khodadadzadeh does not find any worrisome concerns regarding China’s engagement with Angola in the context of political interference, military appearances, and cultural/ education reinforcement, both economic and financial fields are purely characterised by extensive neo-colonial tendencies. In economic terms, Chinese companies including those in the mining industry tend to hire Chinese labour instead of Angolan workers (2017: 37). This study further makes a shocking revelation about China’s foreign aid policy as supported by Tukumbi (2011: 257) who noted that the latter in Angola comes with terms and notions that the aid should be utilised to “only hire Chinese workers and to only purchase Chinese products and equipment” (2017:
38). The other significant aspects relate to the unfair agreements as the Asian giant decides on the aid to purchase Chinese manufactured goods instead of those made locally.
The second dimension of financial dependence is shown by the economic prosperity of Angola which is heavily dependent on China as their biggest trading partner and infrastructural build-up pillar. Implying that a weaker China would mean less demand for Angola’s natural resources of gas, oil and copper and ultimately few investments in infrastructure, mining and other areas. Yuan has also been made the second legal tender in Angola through a monetary agreement that decreased Angola’s dependence on the dollar and increased China’s economic influence in Angola (Khodadadzadeh, 2017). Observably, Angola’s financial dependence on China comes from the Asian giant being the principal funder and responsible for “at least one-third of Angola’s GDP” (Khodadadzadeh, 2017: 43). With 40% of the total trade export from Angola, China is in charge of Angola’s financial support in terms of inflations and depreciation of the local currency or export products’ increasing or decreasing prices. In the final
16
analysis, China is depicted as a successful capitalist and colonialist even though it preaches mutual benefit in Angola.
The above scenario implies that China is not transparent with its activities in Angola, which leads to huge suspicions and mistrust as its organised system of economic exploitation and financial dependency in Angola is led by a pattern of unfair credit packages, infrastructural loans, aid in exchange for natural resources of gas and oil that contributes to the negative effects of labour and business markets in the African country. Admittedly, the study contains the most relevant and most updated neo- colonial practices in Angola which makes it very much important and analytically appropriate for the current study to build on. However, the study fell short of outlining the Chinese companies operating in Angola and their operations including the significant impact of the Chinese practice of dumping processed goods and services in Angola’s local industries such as the broader analysis of China’s Belt and Road Initiative.
Corkin's (2011) study titled “China and Angola Strategic partnership or marriage of convenience?” explores the oil-backed concessional loans provided by Chinese banks to Angola to counter check if the nature of China and Angola’s partnership is strategic with shared goals and/or an uneasy marriage of convenience. Corkin highlights that China-Angola relations can be traced from the anti-colonial struggle when China supported the liberation movements such as the People’s Movement for the Liberation of Angola (MPLA) although their official bilateral relations are of recent origin. He says that after the 2002 Angolan Conflict, China had shifted attention to economic collaboration with Angola based on the win-win strategy and the reconstruction and development of Angola including the exploration of the latter’s natural resources. As the largest Angolan trading partner, it also accounts for the largest Angolan oil imports.
After a synopsis of the historical relations between the two countries, Corkin examines how the China Exim Bank (policy bank) entered Angola as the key instrument of the facilitation of economic cooperation between the two countries.
The Chinese provision of loans are said to be more generous than European and American banks’ oil-backed financing. The loan terms stipulate that Chinese companies should be awarded 70% of the Angolan government’s public tenders in the
17
construction and civil engineering contracts approved by the government of China.
One of the major Chinese oil companies that is operating in Angola is the Sinopec which has historically been marred with controversy as its entry into Angola in the last two decades was accompanied by China Exim Bank’s US$2 billion loan facility awarded to the government of Angola to finance the reconstruction of their infrastructure. This is said to be a loan to support Sinopec’s entrance into a strategic African country.
Although this is the case, Sinopec had since experienced several challenges in bidding for other state-financed oil contracts over time as Angola sought to diversify its finance partners including the incorporation of the USA engineering firm Kellogg Brown & Root (KBR) for refinery purposes and competition and the China Sonangol international holding (CSIH), Canada’s Export Development Bank, Brazil’s Banco Nacional de Desenvolvimento Económico e Social (BNDES) to showcase the thawing of relations between international financial institutions and Angola. The trade relations between the two countries have over time shown that even if Angola is seen as a Chinese important source of oil, Angola is not regarded as an important strategic location of investment beyond the oil acquisition. This is in contrast to South Africa and DRC as important strategic locations of Chinese investment beyond the acquisition of minerals.
In the final analysis, Corkin indicates that Angola’s relations with China had matured from a heady embrace of “mutual convenience to a reassessment of each other’s strategic significance as partners” (2011: 4). This is because they both see each other as strategic allies for the foreseeable future. Notably, the study did not broadly examine China’s debt-trap diplomacy strategies and the key mineral resources that serve as China’s interests in Angola.