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China Oil Diplomacy In Africa - Essay Example

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Efforts are underway to liberalize global trade through multilateral process under the banner of World Trade Organization (WTO). Various trade agreements between member countries have led to considerable amount of resilience in the pattern of world trade. However, trade negotiations between member countries at different Ministerial Conferences have never been smooth, and they continue to be plagued by controversies…
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China Oil Diplomacy In Africa
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The Sino-African trade alignment is one such relationship between countries, which has raised many interesting issues at the international forum. The fact of the matter is that China requires oil for its fast growing industries, which Africa can offer, and Africa requires financial and development support, which China can provide. From the traditional Ricardian comparative cost advantage framework, each country specializes in producing and exporting the goods, which they produce at a lower relative cost than other countries.

It is because each country is endowed with certain specific factors by nature, which places them in a unique position to produce certain goods at a cheaper cost than others. Hence a country which can produce a commodity at a cheaper price is in a position to compete with others whose cost of production is dearer. For example, China, because of its capabilities in producing and exporting textiles at a cheaper price in comparison with other countries, is better suited to supply textile products to Africa.

At the same time, if China throw all its might in trying to extract oil from its own geographical boundaries, the unit cost of oil would be dearer in comparison with the oil they can import from, say, Angola. In such a situation, it is better for China to supply its cheaper textile products to Angola, and import its oil requirement from Angola. Thus, on account of inbuilt comparative advantages, international trade is beneficial for both the partner countries. On account of China's oil and other natural resources requirements, and China's capabilities in providing development assistance and technical support to Africa, both China and the African countries are better placed to enter into relationship with each other to mutually benefit from trade.

Africa is looking for new development opportunities. Old actors such as Japan, the US and the EU and their African strategies did not go well with Africa. It is also evident that the African continent is growing fast on account of Sino-African relationships, in recent years. Further, during the China Africa Summit, China offered quick packages to Africa, which further strengthened the bond between Africa and China. However, the West looks at China's oil diplomacy in Africa with suspicion, and some critiques argue that China's engagement with Africa does not wear a human face.

Hence it calls for an enquiry into the type of role played by China in the African continent to gauge the pros and cons in the Sino-Africa bilateral relationships. In an effort in this direction, I gather the views of various scholars in Sino-African studies and review the literature pertaining to China - Africa in section 2. Based on reliable data sources, I assess the trend in China's trade with Africa in section 3. The conclusions of this study are presented in section 4. Section 2: Literature Review:China's oil diplomacy springs from its quest for oil to feed its economic growth momentum.

A steady overseas oil supply in the current geopolitical scenario can be a critical task. China's own experience in procuring oil from outside sources indicate that buying oil from overseas is a poor option compared with control

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