Coinciding with China's economic involvement on the African continent taking off in the latter half of the 2000s, the amount of research published about Chinese-African cooperation has pretty much exploded since then (Ovadia 2013: 233). A term that exemplifies the debate around this complex issue very well is Corkin's (2011: 170) "Angolan Model". It stands for a simple principle: Chinese funds are used to build local infrastructure in Angola, with “natural resources as collateral” (id.). The word “model” of course implies that this strategy is used in other countries as well, but here we will take a more detailed look at the original case.
A Pragmatic Relationship?
Campos and Vines (2008) seem to confirm the basic premise of the Angolan Model. They portray Angola-China cooperation as a practical, strategic partnership that is currently driven by interlocking economic interests. Relations between the two countries date back to Angola’s anti-colonial struggle, when China supported various liberation movements (id.: 34). The focus switched from security and military to economic cooperation after the end of Angola’s civil war in 2002 (id.: 35). The post-conflict economy needs reconstruction of its infrastructure (id.: 33), while China seeks access to Angolan oil to fuel its growing energy needs (id.: 43).
The authors highlight four aspects of Chinese-Angolan cooperation:
China has offered low-interest loans to the Angolan government to fund construction projects such as roads, bridges, hospitals, schools and telecommunications (id.: 35ff.). Projects are carried out by Chinese firms that are suggested by the government in Beijing (id.: 37), yet there is a local content requirement that leaves 30% of the contracted work to be carried out by Angolan firms (id.: 47).
Bilateral trade is dominated by crude oil export to China, which makes Angola the only African country that had a trade surplus with China at the time (id.: 39f.). With oil exports rising, China had also become the second largest exporter to Angola (id.: 40).
Trade goes along with a significant increase of Chinese foreign direct investment (FDI) in Angola (id.: 40f). The Angolan government tries to attract foreign investors by offering them the same favorable conditions as for local firms. While Chinese investments are still smaller than those from traditional partners, the number of businesspeople interested in local opportunities suggests enormous potential (id.: 41).
China has also tried to directly acquire stakes in Angola’s oil industry (id.: 41f.). Oil giant Sinopec has formed a joint-venture with Angolan state-owned oil company Sonangol in order to explore oil fields previously owned by Western companies (id.).
In total, the authors claim these relations to be of mutual benefit. Chinese firms have gained access to a new market with little competition and Angola has become one of the most important exporters of oil to China (id.: 43). Chinese firms on the other hand fulfill Angola’s dire need for infrastructure, and they have the reputation of completing projects faster and cheaper than competitors (id.: 41). Chinese financial assistance was provided with extremely attractive conditions, at a time when relations with Western donors and international financial institutions were poor (id.: 43). Campos and Vines argue that the investments in infrastructure have also contributed to poverty reduction (id: 44). While China has become a major partner, the view of Angolan officials is that Chinese involvement in their country has received too much attention (id.).
The authors also mention a number of drawbacks: The government elite in Angola is suspected to have pocketed parts of the loans from the China International Fund that finances many of the large construction projects (id.: 38f.). Work on the projects is partly curtailed by Angola’s limited logistic and human capacities - for example, the ports are unable to manage the number of goods needed for construction (id.: 38), and the number of local firms able to carry out the construction work is too low to satisfy local content requirements (id.: 47). Dialog between the two countries is limited to elite government and business circles, and the cultural divide is significant (id.: 46f.). Due to lack of financial and human capital, there are also doubts whether Angola will be able to maintain infrastructure once the projects are completed (id.: 47f.).
Other Perspectives on the Topic
How does Campos and Vines’ view on the role of China’s oil interests in Angola compare to other assessments in the literature?
Burgos and Ear (2012) focus more on the political implications of China’s engagement in Africa. They criticize that China’s resource hunger “trumps any concerns regarding bad governance, human rights violations, or ecological disruptions” (id.: 352). Campos and Vines on the other hand mention the lack of “political preconditions” attached to Chinese assistance (2008: 33) to be advantageous on the Angolan side (id.: 43). Yet just this lack of preconditions has, according to Borgus and Ear, undermed attempts of international financial institutions to encourage better governance and economic reform (2012: 358).
The authors also have differing perspectives on Chinese firms. While Burgos and Ear do mention that Chinese companies produce fast and high quality results (id.: 358f.), they diagnose competition not just with local (id.: 358), but also between Chinese firms (id.: 363). Campos and Vines (2008) rather portray Chinese firms as seemingly interchangeable entities that fill a void in Angola.
Meanwhile Corkin (2011) speaks of China and Angola as “uneasy allies”. While she introduces the term Angolan Model, Campus and Vines (2008) seem to describe a similar thing, yet they do not explicitly mention the function of oil as “collateral”, although that seems apparent between the lines. Completely absent from their text is Corkin’s notion of a political dividend for Angola’s government: She claims that the ruling party has benefited from the investment in public infrastructure during elections (2011: 171).
Additionally, Corkin provides a new perspective on the role of Chinese state-owned banks in Angola, in particular Exim Bank (id.: 172ff.). While Chinese loans to Angola come with highly favorable conditions, she notes that Exim Bank has been “increasingly cautious in its dealings with the Angolan government” (id.: 173). For example, the bank avoids risks systematically by paying the contracted construction firms directly (id.). The state-owned bank intends to commercialize its operations, yet the highly political agenda behind its loans suggests government interests are still preeminent (id.: 173f.).
In sum, an analysis of additional literature relativizes, deepens, yet also blurs parts the picture. Seeing that Campos and Vines' work dates back to 2008, while the other articles are from 2011 and 2012, a lack of differentiation regarding several points may be attributed to the fact that both Chinese involvement in Africa and research in this area only just had taken off at the time (Ovadia 2013: 233). Yet their work highlights some aspects barely present in the other articles, especially the need for better cultural understanding on both sides, and the fact that Angolan officials emphasize that China is one partner among others.
The Chinese “no strings attached” financial assistance appears less beneficial when seen within an international context. As Burgos and Ear’s findings suggest, this type of seemingly “unpolitical” support has highly political consequences internationally, but also influences national party politics, through benefiting the ruling party. Meanwhile, Chinese banks and firms increasingly need to be viewed as powerful actors in their own right, not as mere puppets of their government.
Corkin’s term “Angolan Model” emphasizes the fact that Chinese financial assistance, investment, trade and attempts to buy into the Angolan oil industry can hardly be seen as separate sectors of cooperation. Rather, they are closely linked through China’s energy interests.
Burgos, S. / Ear, S. 2012: China’s Oil Hunger in Angola. History and Perspective, in: Journal of Contemporary China 21 (74), pp. 351-367.
Campos, I. / Vines. A. 2008: Angola and China. A Pragmatic Relationship, in: Cooke, J. (Ed.): US and Chinese Engagement in Africa. Prospects for Improving US-China Cooperation. The CSIS Press, Washington.
Corkin, L. 2011: Uneasy Allies. China’s Evolving Relations With Angola, in: Journal of Contemporary African Studies 29 (2), pp. 169-180.
Ovadia, J. S. 2013: Accumulation With or Without Dispossession? A “Both/and” Approach to China in Africa With References to Angola, in: Review of African Political Economy 40 (136), pp. 233-250.
Attribution: This is an edited version of a report I wrote in 2014. Yes, it's slightly outdated by now.