Assignment 4
China, Africa and Oil
As world leaders try to tie down resources for their countries future, larger countries like the US and China, are buying oil and other natural resources at a rapid rate as their populations increase. The country of China, with its population of 1.33 Billion has almost 4 times the population of the USA and because of this they are using natural resources a very swift rate which forces China to look at all its options for purchasing resources.
One of China’s sources is the Continent of Africa and with all of its countries within that produces oil and other goods that China can buy and trade up for. Countries like Angola, the republic of Congo, Equatorial Guinea and Sudan were the largest suppliers of oil to China in 2006 as per (Stephanie Hanson – China, Africa and oil), which accounts for 1/3 of it’s total imported oil. One can say that trading with China is a huge advantage, as Africa has a guaranteed sale for many of its barrels of oil. Unfortunately this is also a disadvantage as factors and figures like this allow China to have a large influence in what happens within the countries of Africa, since its buying power is so great. China with all it economic power pushes its weight around when it wants to trade with countries for their goods. In this case, it knows that a largely poorer country like Africa would jump at the opportunity to sell its goods to any country that would throw some money its way, and because of these needs, China’s trade with Africa had doubled to $18.5 billion in 2007 and has reached $73 billion (Stephanie Hanson – China, Africa and Oil)
All this money and trade doesn’t come without its harm and disadvantages though, and even though China are trading money ...
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...ather than try to win over the respect of the whole country at once. Africa takes pride in the work that they do, and if China wouldn’t buy 1/3 of it’s oil from Africa, there would be barrels of oil sitting around not being purchased and the trade of goods from the cheap Chinese markets would not make their way into the African markets, giving the African people a better way of life, so in turn there are always going to advantages and disadvantages to trade, sometimes no matter what the cost is. China’s, need for oil will continue to grow and its power will grow at the same rate, because of this the situation in Africa will continue to worsen over time as the Chinese continue to take over a fraction at a time, with their empty promises.
Assignment 4
China, Africa and Oil
Professor Dr. P. Wood
T/A: Sally Elabasery
Student # 210182129 – Michael Faranda
China’s large population and untapped market potential has made it an ideal paradise for investors and multinational corporations to invest into by trying to break into the market in different ways, mostly through joint ventures or research and development centers. Now, China has become the largest foreign direct investor for the past ten years as encouraged by the Chinese government. China has expanded into other markets, most notably in Sudan in which China has built oil refineries while helping to indirectly start an economic boom in the politically unstable country for which China has been called out for. Nonetheless, China has allowed more of its domestic companies to acquire other companies. China’s state food and exports enterprise China National Cereals, Oils and Foodstuffs Corporation (COFCO), the largest grain, edible oil and food conglomerate, has recently bought 4.9% of the stakes in the American food corporation Smithfield Foods, Inc. in 2008 and more recently acquired Maverick Foods Co. Ltd, a joint venture between the American Smithfield Foods, Inc. and the Belgian Artel Group. Stemming from its own economic growth and trajectory as well as from the changing international economic climate, COFCO’s buying of stakes in Smithfield and acquiring Smithfield’s joint venture Maverick Foods shows China’s rising status as a growing economic power with its own capital and resources.
It is thought-provoking, in the sense that Africa’s need for foreign created a race to the bottom, much like what Pietra Rivoli described in The Travels of a T-Shirt in the Global Economy. Due to some African states’ reliance on foreign aid in order to mine and profit on their resources, they allow business standards to be lowered and for Chinese firms to tip the contracts moresoever in the favor of Chinese firms. This lowers the potential earnings of African states by lowering royalty rates, for example. Additionally, Burgis’ research was thorough and transparent. When he did not receive a response or if his questions were dodged, he made it obvious to the readers. Sure, some could view this book as too anecdotal to be used as a credible source of Africa’s situation. However, this is due to the nature of the system Burgis is writing about; after all, they are shadow states for a reason. Some readers will be saddened by this text, others angry, most curious to learn more, but above all, everyone will be intellectually stimulated and
In the global media and especially in the US print media, there is hardly a single day that passes without the mentioning of China and either its internal affairs, or its dealings with one country or the other. China has become a resounding theme in current affairs because of its new role as a sponsor and a facilitator of growth and development projects in developing countries. The one particular region in the world where China’s influence has recently grown to be pervasive is Africa. This influence however faces a collar-grabbing excoriation from the media, from the West and from the World in general. Conversely, sincere opinions from other onlookers are of deep praise for the good and needed support that China is currently giving to African countries. This dual view of China’s development work in Africa has led to a Ying and Yang identity for her, naturally, and may possibly be slowing down the full potential of Chinese investment and development projects on the continent. This paper in response, aims to bring forth a more crystallized review and understanding of China’s role in Africa by seeking out both the positives and the negatives in the enactment of China’s role, and elucidating whether it has brought forth growth and or development.
In 1978, China was positioned 32nd on the planet in export volume, yet it had multiplied its reality exchange and got thirteenth biggest exporter in 1989. Between 1978 and 1990, the normal yearly rate of exchange extension was over 15 percent,[11] and a high rate of development proceeded for the one decade from now. In 1978 its exported on the in the world of the overall industry was insignificant, in 1998 regardless it had short of what 2%, however by 2010, it had a world piece of the overall industry of 10.4% as stated by the World Trade Organization (WTO), with stock fare offers of more than $1.5 trillion, the most astounding in the world.
Bearing in mind that the threat of China’s dependency on imports of natural resources has the potential to threaten the official ideology of Confucianism, the real threat is to the interests of the state and the Communist Party of China, because the future of the party and stability of the country is dependent on the continued growth of the Chinese economy. Maintaining the flow of raw materials is the main objective of the PRC because without them the economic engine of the China would be at a stand still, which has the potential to be seen by the people of China as a weakness and flaws in the current governing system. China should continue developing trade relations and international connections because the PRC has been remarkably successful in creating a network of countries who will be loyal in business and political reform. China has has a strategic focus on building relations with nations whom America is not keen on. This has also perpetuated the realization the the Chinese system of governance provides a second option to the ‘Western Consensus’, as a viable means for successful economic growth coupled with strict government control. China must operate multilaterally to continue the trajectory of relation and loyalty building in other countries. This will assist china with the key pillar goals of, building a comprehensive national power; advance incrementally in order to consolidate a position of strength, and maintaining stability, and with the objective that China will be in the position to continue imports of raw material to Chinese industry in the event of a sea trade embargo from opposition countries like the United...
-Stelzer, Irwin M. “The Axis of Oil: China and Russia Find a New Way to Advance Their
It seems China’s interest in African countries is not in territorial occupation, but rather in international prominence and expanding its rapidly growing economic agenda. Kenya’s richness in commodities and weak commercial laws are an idealistic setting for rapid market entry, therefore China has been able to effortlessly influence and expand its mercantilist ambitions without distress of competition from the west. Even though the United States is focused in providing conditional aid to Kenya, the effects of Chinese expansion in Kenya on U.S. interest are alarming, for China is offering cold hard cash that is f...
America is dependent on other nations for their ability to create energy. The United States is the world’s largest consumer of oil at 18.49 million barrels of oil per day. And it will continue to be that way for the foreseeable future considering the next largest customer of oil only consumes about 60% of what the U.S. does. This makes the U.S. vulnerable to any instability that may arise in the energy industry. In 2011, the world’s top three oil companies were Saudi Aramco (12%), National Iranian Oil Company (5%), and China National Petroleum Corp (4%). The risk associated with these countries being the top oil producers is twofold. One, they are located half way around the world making it an expensive to transport the product logistically to a desired destination. And two, the U.S. has weak, if not contentious,...
one of the world’s leading trade power, it is a goal that Chinese authorities are firmly
For the past twenty-five years, China has witnessed an overall increase in its domestic growth (Fischler 148). According to the article, “The Rise of China as a Global Power,” by Dr. Rosita Dellios, China “is the world's fourth largest trading nation, rising from 32nd in 1978 to 10th in 1997.” Similarly, China’s GDP is also second to the United States of America, generating 13 percent of the world’s output (Dellios). Since China’s introduction into the World Trade Organization in December 2001, its average tariff dropped from 41 percent in 1992 to 6 percent in 2001, becoming one of the most open economies in the world (Dellios). China is also the world’s fastest developing economy, obtaining an annual growth of 9.5 percent through foreign direct investment, low labor rates, emerging markets, and growth expansion. (Dellios). Therefore, the 21st century has been titled the “Chinese Century”, as China has become the second-largest international economy in the world (Ji-lin 15).
Zhang, Jianhong, Arjen van Witteloostuijn, and J. Paul Elhorst. "China's Politics and Bilateral Trade Linkages." Asian Journal of Political Science 19.1 (2011): 25-47. Academic Search Premier. Web. 13 Dec. 2013.
China has also expanded their trading industries with countries such as South Korea, Japan, Taiwan, ASEAN, India, Russia and Hong Kong. This has not satisfied the Chinese greed for income as they also export and import goods to American countries, name...
China's development is praised by the whole world. Its developments are not only in the economic aspect, but as well in its foreign affairs. Compared with other developed countries, China is a relatively young country. It began constructing itself in 1949. After 30 years of growth, company ownership had experienced unprecedented changes. Entirely, non-state-owned companies can now be more involved in sectors that used to be monopolized by state-owned companies.
In the race to be the best, China is clearly outperforming the United States. China has strong economic fundamentals¬ such as “a high savings rate, huge labor pool, and powerful work ethic” (Rachman, Gideon. "Think Again: American Decline). Their economy has grown an astonishing 9-10% over the past thirty years; almost double of what it used to be decades ago. China is also the “world’s greatest manufacturer and its greatest market” (Rachman). The continuing growth of China's economy is a source of concern for not only the U.S. but surrounding nations as well. One could argue that the U.S. need not worry about China’s growth because of the spread of globalization and that western ideologies would influence China to turn to democracy. Yet China has still managed to “incorporate censorship and one party rule with continuing economic success” (Rachman) and remains a communist country. Hypothetically, even if China does resort to a democratic state, this does not gua...
China is one of the main viable candidates as this century’s new world power. Today, it maintains a strong economic stance within the international market, and is expanding at a rapid pace. The United States cannot maintain its position as hegemon for the rest of humanity; just as how ...