China’s Angolan Oil Imports Soar

2006-07-07
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June 20, 2006: Chinese Prime Minister Wen Jiabao (L) shakes hands with Angolan President Jose Eduardo Dos Santos in front of the presidential palace in the Angolan capital Luanda during his official visit. Photo: AFP

In yet another sign of Africa’s growing importance to China, Angola has emerged as the country’s top source of imported oil, according to official Chinese figures.

In May, China’s oil imports from Angola soared to an average of more than 752,000 barrels per day. This surpasses China’s oil imports from Saudi Arabia for the first time, according to data published June 26 by China’s General Administration of Customs.

These figures mean that China now gets nearly one-fifth of all its imported oil from Angola. More importantly, the increase accounts for nearly half of China’s import growth from all sources this year.

Analysts say these numbers point to the strategic importance China has attached to Angola and other African nations.

Since January, President Hu Jintao, Prime Minister Wen Jiabao and Foreign Minister Li Zhaoxing have crisscrossed Africa on a series of trips.

Wen and Li visited Angola in June as part of a seven-nation tour.

They’re less concerned about human rights, democracy-building, market reform,

But China’s visits to the impoverished country have often been accompanied by the granting of soft loans, which are easily squandered or misused.

On June 20, a BBC report quoted World Bank officials as saying that Chinese credits to Angola may now total $9 billion. The report said Angola’s poor have yet to see the benefits of these funds.

“Even in the capital, Luanda, families struggle to find food and water,” the BBC said.

Little heed to international worries

In interviews with Radio Free Asia, experts said China has been paying little heed to international concerns about its credit policies as it scours the world for oil.

Frank Verrastro, director of the energy program at the Washington-based Center for Strategic and International Studies, called China’s loans “a real concern.”

“But when you look around the globe, if you’re in China’s shoes, you’re looking at diversified suppliers that can bring both near-term and longer-term supplies to your market,” Verrastro said.

“They’re less concerned about human rights, democracy-building, market reform,” he added.

Another concern for China is that though demand for oil is high, the country’s refineries may have reached capacity in processing heavy, high-sulfur Middle Eastern crude oil.

According to the Reuters news service, China has been forced to reduce its planned imports from Saudi Arabia by 10 percent because of corrosion caused by sulfur at some of its refineries.

Mikkal Herberg, director of the Asian energy security program at the National Bureau of Asian Research, a nonpartisan research institution with offices in both Seattle and Washington, said low-sulfur grades of oil from Angola and Nigeria called light sweet crude are more desirable.

“If you look around the world for where are the natural new sources, rising supply sources of light sweet crudes, there are very few of them around. And Angola is one of the few,” Herberg said.

That would help account for China’s visits to Angola and its willingness to bankroll the Angolan government with soft loans.

But Herberg said this practice is likely to come under increasing international scrutiny unless it is accompanied by transparency and political reforms.

“As China’s presence in these countries grows, and these essentially no-strings-attached loans grow, you would have to think this is going to become a more important issue for a lot of other countries to be concerned about,” he said.

Original reporting by Michael Lelyveld. Edited for the Web by Richard Finney.

Original reporting in Chinese

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