Testing the Limits: China’s Expanding Role in the South Sudanese Civil War

[unhappycamper]

http://www.jamestown.org/programs/chinabrief/single/?tx_ttnews[tt_news]=42945&tx_ttnews[backPid]=25&cHash=80388e519d6d2b617dd8650db3992807#.VDyZPlcuvKc

Testing the Limits: China’s Expanding Role in the South Sudanese Civil War
Publication: China Brief Volume: 14 Issue: 19
October 10, 2014 04:14 PM Age: 3 days
By: Hang Zhou

South Sudan relapsed into war on December 15, 2013, primarily due to the power struggle between South Sudan President Salva Kiir and former Vice President Riek Machar. China once again found one of its sizable foreign investments—particularly in the oil sector—embroiled in local political turbulence. This serves as a painful reminder to Beijing that independence not only endowed South Sudan with 70 percent of unified Sudan’s total oil output, but also daunting political and security risks.

Beijing’s conflict resolution efforts in South Sudan were widely applauded by the international community until the delivery of the first consignment of a $38 million order of arms from China North Industries Group (NORINCO) to Juba, South Sudan’s capital, in June, which called into question China’s neutrality in the peace process (Sudan Tribune, July 17). The reported statement by the Chinese embassy in Juba on September 20 that NORINCO would halt the remainder of its arms contract, in addition to the Chinese Foreign Ministry’s announcement of the deployment of a full infantry battalion to the United Nations Mission in South Sudan (UNMISS), signals a renewed—and hopefully more consistent—commitment to the uneasy peace process. An independent South Sudan, just as the unified Sudan before, is likely to remain a testing ground for China on how to balance its policy of non-interference and the urgent need to protect fast-growing overseas interests (See also China Brief, December 17, 2010; China Brief, August 12, 2011).

China’s Stake in South Sudan

Since South Sudan gained independence in 2011, bilateral economic engagement has grown rapidly. The bilateral trade volume, although largely insignificant to China, almost quadrupled in 2013 to $2.54 billion, representing roughly 18 percent of South Sudan’s GDP (Ministry of Foreign Affairs, March). Oil continues to feature as the most important component of this bilateral economic relationship. At full capacity, South Sudan would account for approximately 5 percent of China’s imported oil (Wenweipo, October 8). However, oil production has so far been heavily encumbered by political turmoil both within and beyond South Sudan. Juba shut down oil production for 15 months until this April, due to a row with Khartoum, Sudan’s capital, over transit fees. Amid the ongoing conflict, South Sudan’s oil production stands at 160,000 barrels per day, a one-third drop since the fighting broke out (Reuters, June 6). Unity state’s oil production was again completely shut down by the Greater Pioneer Operating Company (GPOC), in which China National Petroleum Corporation (CNPC) controls a 40-percent stake. All the oil is now pumped from Blocks 3 and 7 in Upper Nile state, operated by the Dar Petroleum Operating Company (DPOC) in which CNPC has a 41-percent stake.

About 140 Chinese companies are currently registered in South Sudan and the traces of their involvement in non-oil sectors are increasingly perceptible, particularly in infrastructure construction and telecommunication (Xinhua, October 8, 2013). However, the unresolved conflict overshadows this burgeoning expansion of economic cooperation and the potential developmental benefits that should result from it are unlikely to be realized any time (African Arguments, September 12).