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China’s Chad Courtship

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China Power

China’s Chad Courtship

With an eye on oil, China has been keen to court Chad. Ties are a microcosm of Beijing’s Africa role.

Journalists and scholars need to pay far more attention to China’s role in the African nation of Chad.  That’s one of several recommendations made by a new report and policy brief (pdf) from the South African Institute of International Affairs (SAIIA). 

“China’s Growing Involvement in Chad: Escaping Enclosure?” by Romain Dittgen and Daniel Large reviews China’s presence in Chad since the renewal of diplomatic relations in 2006.  As elsewhere in Africa, China has exchanged aid and investment for resources to fuel its rapid industrial rise.

A nation of 11 million people, Chad has a per capita GDP of less than $900 a year.  As the SAIIA researchers point out, Chad consistently ranks among the worst performers in international indices. For example, the country scored last on the World Bank’s Ease of Doing Business Index in 2011. 

Why does China want to invest billions in such a troubled country?  The primary reason is oil. Oil accounts for an overwhelming percentage of Chad’s exports, and at present a majority of it goes to the United States. The centerpiece of China’s Chad policy is the $1 billion Rônier project, described in detail in the SAIIA report.

Led by the Chinese National Petroleum Corps (CNPC), the Rônier project runs 300 kilometers of pipeline from oilfields in southern Chad to a Chinese built refinery north of the capital, Ndjamena.  The refinery began production in 2011. CNPC and Chad’s state-owned Société des Hydrocarbures du Tchad split ownership of the refinery 60-40. 

China has taken a “quite different” approach to the oil sector in Chad than previous western involvement, according to the SAIIA report. Western companies such as Exxon-Mobil and Chevron, as well as the Malaysia’s Petronas, have focused exclusively on extracting crude for export. With the Rônier project, China has located value-added refining processes within Chad itself.

In doing so, China has implicitly backed the regime of President Idriss Déby. The World Bank, who previously invested in Chad after oil production began in 2003, eventually pulled out when Déby wanted to use oil revenues on military spending. The World Bank had required Chad to spend oil revenues on human development projects. China hasn’t imposed the same conditions. 

Contacted for comment, David Shinn, former U.S. Ambassador to Ethiopia and Burkina Faso and author of China and Africa: A Century of Engagement, says he believes the distinction between Western and Chinese involvement to be “the most salient point” of the SAIIA analysis. 

For his part, Chad’s president, Idriss Déby has used the Rônier refinery and other Chinese projects to bolster his own domestic legitimacy. In the 2011 campaign, his fourth bid for the presidency since taking power in a coup in 1990, Déby promised a renewed focus on improving Chad’s economic development. 

In Chad, electricity is scarce, expensive, and barely available outside Ndjamena. The refinery offers a partial solution to this problem. Other Chinese development projects include new and renovated hospitals, such as the renamed Chad-China Friendship Hospital in Ndjamena. According to the SAIIA report, China is also building an international airport near the refinery that will cost an additional $1 billion. 

China is further investing billions in a railway line running from Cameroon to Ndjamena onward to Nyala, the capital of South Darfur in Sudan. One of China’s signature contributions in Africa has been enhancing railway infrastructure.

Improving regional security has been an important part of the cooperation between Beijing and Ndjamena. Chad has been a contentious neighbor of Sudan, where China has made sizable investments. Until 2010, Chad’s president Idriss Déby and his Sudanese counterpart, President Omar Hassan al-Bashir, had each funded rebel groups attempting to overthrow the other. Since South Sudan’s emergence as an independent country last year, China has tried to remain a neutral partner of both countries. This is a delicate undertaking. By nurturing a cautious peace between the Chad and Sudan, China has removed one variable from a complex equation. 

The region, though, is far from stable. The death of Libyan strongman Muammar Gaddafi has had an unsettling effect on the neighborhood, as the violent coup in Mali demonstrated earlier this year. In the post-Gaddafi vacuum, the United States has increased counter terrorism operations throughout the Sahel. Shinn believes there’s the possibility of “a growing U.S. security involvement in Chad based on counter terrorism.”

As for China, Déby’s populist rhetoric has made him an uneasy partner. Attempting to live up to promises of lower fuel costs, Déby’s regime fixed prices at about half of market value when the Rônier refinery opened in June 2011. By August, the slashed prices had driven the refinery to lose $4.7 million. Production stopped for 40 days. The SAIIA researchers reported rumors that China has used this incident to demand a larger stake in the ownership of the refinery.

China can also have hardly forgotten the events of 2008, when it had to evacuate approximately 200 Chinese citizens from Ndjamena as an armed rebellion nearly toppled the Déby regime. The threat of internal conflict remains. In its annual Watch List, Foreign Policy scored Chad as the third most likely country on earth to experience a coup in 2012. 

China’s relationship with Chad underscores the inherent tensions in a partnership with a corrupt leader whose primary interest is his own survival. According to Shinn, the Rônier project “raises the question whether China got the economics of this project right in the first place or made a big mistake as Western companies believed.” 

Chad remains a microcosm of the ambiguities of Chinese engagement in Africa. How Beijing handles challenges there will offer an insight into how it will approach potential crises throughout the region. 

John Schellhase served as a U.S. Peace Corps Volunteer in the Philippines from 2008-2010.  Currently, he works for the Development Research Institute at New York University and is pursuing a master’s degree at the NYU Center for Global Affairs. The views expressed here are his own.  Follow him on Twitter: @JohnSchellhase