Sudan

Sudan is key to China's African oil interests but also a pariah regime. While the Chinese government may be an 'old friend' of Sudan based on the idea of non-interference, in practice China has played a deep and critical role in Sudan's politics. In late 1995 China's 'energy cooperation' with Sudan gathered momentum when President Bashir visited Beijing and secured a reduced rate loan with an agreement between China's Exim Bank and the Bank of Sudan to finance oil development (Ali 2007).

The turn to China by the National Islamic Front's (NIF), later re-named the National Congress Party, was born of necessity. Its renewed war against the Sudan People's Liberation Movement/Army (SPLM/A) continued, prosecuted as part of a project of Islamist transformation in Sudan. Having poor relations with the IMF and World Bank, Sudan also became the object of sanctions by the UN (1996) and the US (1997) so that turning to China was pragmatic given Beijing's political dependability and willingness to invest. China viewed Sudan as a friendly state with a more open oil market not, as elsewhere in Africa, dominated by established Western corporations.

From early 1997 the Chinese National Petroleum Company (CNPC) has operated a 40 per cent share in the Greater Nile Petroleum Operating Company (GNPOC), the main oil consortium in Sudan. However, oil production in southern Sudan had been constrained by the lack of a proper infrastructure. So, a CNPC subsidiary was involved in constructing a 1,600-km buried pipeline for GNPOC to connect oil production with the international market. The Khartoum oil refinery was built as a CNPC-Ministry of Energy joint venture with an investment of some $638 million and became operational in February 2000. Following GNPOC, the second major oil consortium in Sudan, Petrodar, was created in 2001. By 2006 China was by far the most important external economic actor in northern Sudan, whose oil-fuelled economic boom saw real GDP growing by 12 per cent in 2006.

The successful running of Sudan's oil industry by CNCP and other foreign oil companies amidst the civil wars demonstrated a willingness to side with Khartoum, despite the principle of 'non-interference'. China's 'blind-eye' support for the NIF has been the wellspring of grievances in many quarters in Sudan. Forced civilian displacement in southern Sudan continued, though largely overshadowed by Darfur, and the oil sector was targeted by the SPLA and other groups. Oil rich regions generate considerable revenue, but there have been negligible improvements in service delivery for affected civilian populations. Grievances concerning oil practices, the environmental impact of oil, and employment policies of oil companies abound. China has supplied arms to Sudan and helped develop northern Sudan's arms manufacturing industry in the late 1990s.

The Comprehensive Peace Agreement (CPA) of 2005 inaugurated a formal peace between northern and southern Sudan but the Chinese retained the ties they had built up over the years. Even before the CPA, the Chinese had identified its post-war reconstruction market as an area of expansion, especially given that sanctions restricted Western investment. Oil activity has expanded after the CPA and CNPC signed new concessions in 2007. Besides oil, key areas for expansion include construction, agriculture, mining, manufacturing, and importantly an assortment of transport infrastructure and energy projects. Most controversially, the Merowe Dam in northern Sudan being led by a Chinese consortium has generated conflict and displacement (Bosshard 2009).

China's diplomacy on Darfur became more publicly engaged from 2006 to the point where its efforts to 'influence' the Sudanese government on Darfur blurred the boundaries of non-interference. Beijing underestimated the political risk posed by Darfur to its interests within Sudan, as well as its standing in Africa and on the international stage. More proactive engagement on Darfur was evident before China's role in Sudan was connected to a 'genocide Olympics' campaign by activist groups in the US. The appointment of a new special ambassador, Liu Guijin, in May 2007 was part of China's efforts to bolster its image and contribute to solutions. For example, more aid was given to Darfur. Such moves also enabled China to promote its own interests through more vocal diplomacy and participation in multilateral forums and initiatives on Darfur. But China's more proactive diplomacy was accompanied by continuity in defending the sovereignty of Sudan and arguing against further sanctions, as well as deepening economic links. Thus, for this 'pariah state' the impact of oil has been to further concentrate wealth rather than achieve broader development, and this seems likely to worsen even if, as a result of diplomacy, it may lose some of its pariah status.

 
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