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After the long civil war, when waiting for substantive reconstruction aid proved futile, the Angolan government resorted to a comprehensive credit and cooperation agreement with China in 2004. Under this deal, rebuilding is financed by an initial oil-backed loan of 2.4 billion U.S. dollars repayable in 17 years and with an unbeatable interest rate of 1.5 percent. A »topping up« of two billion U.S. dollars was agreed in 2006 when Chinese Prime Minister Wen Jiabao visited Angola in June 2006. Through this new cooperation Angola has risen to become the largest Chinese trading partner in Africa, with a volume of 9.3 billion U.S. dollars in 2006 (2005: 6.95 billion US dollars), even overtaking South Africa. In May of 2006 the southwest African country had already become China's largest supplier of crude, surpassing Saudi Arabia. At the same time, China overtook the U.S. as the largest buyer of Angolan oil. With the help of the oil-backed loans, huge reconstruction projects are being implemented, such as a new international airport for Luanda, a new production and broadcasting center for the state Television TVA, as well as the coastal North-South Highway between Lobito and Luanda. China is also a partner in the projected second Angolan refinery to be constructed in Lobito. Furthermore, the money is being put into the ailing electricity network of the overcrowded capital Luanda, several regional hospitals and schools in all provinces. A huge low cost housing project involving the construction of several satellite cities is to be implemented in all provinces. The Angolan Government hails the cooperation with China as the only way to quickly re-launch the essential infrastructure which is so important for the revival of the war-torn Angolan economy. The short implementation time for most of the projects will surely also help to improve the Government's image before the upcoming general elections projected for 2008 and 2009. This help comes at a crucial time, and apparently without strings attached. China is also seen as a new alternative to the West in international relations, creating a new balance with more weight for developing countries On China's side, the immediate economic interest is to secure the energy supply for the booming Chinese economy Apart from that, the deal is very profitable as China can provide its state firms with formidable projects, export some of its redundant manpower as well as goods and machinery to Angola. Most of the construction work is being carried out by Chinese firms and their imported workers, due to a clause stating that 70 percent of tenders will go to Chinese firms, with 30 percent going to Angolan firms. At the same time, it secures oil for some years to come, and at beneficial terms. While the immediate advantages for both sides are more than apparent, the medium-to long-term consequences of such a massive Chinese involvement in Angola are less clear. International critics fear first and foremost that this engagement will slow down efforts aimed at bringing about more transparency and economic reform. Apart from that there has been little discussion on the insertion of post-war Angola into the global economy. How will it be possible to revive and diversify local industry - outside of oil and diamond production - in order to compete internationally? In reality, the structure of trade relations with China will be almost identical to relations with the West, with Angola exporting natural resources and importing all kinds of consumer goods. Furthermore, there is no strong impulse for the local economy as Angolan firms and the national workforce are only marginally involved in the projects. Thus job creation and know-how transfer are minimal. Some also fear that there is not enough capacity on the Angolan side to effectively manage and monitor the projects, control their quality, and continuously maintain the infrastructure.… [ABSTRACT FROM AUTHOR]

Chinas rapid pace of growth and the increasing wealth of its citizens has led to growing demand for raw materials and for oil in particular. In 1993 the country became an importer of oil, and since then imports have risen steeply. Today, China imports 40 percent of its oil supplies and its dependence on oil (and gas) imports will continue to grow. In response to this, the Beijing leadership has launched an all-out program of domestic reform as well as a global import-security strategy. China's economic growth, which is crucial for its internal (and thus regime) stability depends on secure (and affordable) energy supplies. With energy security now a top priority, Beijing has launched a global drive to secure the country's fuel supplies. The vulnerability of the sea routes from the Middle East and Africa is a major concern, and the fact that only the United States is able to control them makes it even more so. China is responding by pursuing a global energy policy based on a strongly neo-mercantilist approach aimed at acquiring direct control over foreign oil and gas fields by Chinese companies and through the conclusion of pipeline agreements with neighboring countries and by diplomatic means. The results of China's energy and resources diplomacy are being observed with growing unease, especially in Asia, but also in other parts of the world. China's impact on the world oil market is growing, as is, generally, its geopolitical impact. Competition for energy is exacerbating existing rivalries between China and a number if its neighbors. China's reliance on foreign oil imported from unstable regions over huge distances via sea-lanes that are difficult to control is having a notable impact on the country's military planning. China's new energy diplomacy also has an impact on the »international order« because the country has concluded energy alliances with, and in many cases invested heavily in; a whole series of international pariah states. [ABSTRACT FROM AUTHOR]

In the last ten years China has considerably stepped up its economic and political relations with the countries of the Middle East and North Africa. Despite the rivalries in the region China today enjoys good relations with all potential energy providers, as well as with Israel. The main goal of its efforts is to satisfy its growing energy needs, which the Chinese government has identified as one of the critical factors in its economic development model. Through its large state energy companies, flanked by intensive "oil diplomacy" the leadership in Beijing has managed to conclude numerous long-term delivery contracts which will cover the bulk of Chinese oil imports. Although economically aggressive, China is politically moderate and seeks to keep out of disputes in this notoriously unstable region. However, in a series of conflicts, above all about the Iranian atomic program, but also developments in Iraq and Sudan, it is becoming clear that Beijing's different foreign policy goals are becoming increasingly difficult to reconcile. Between dependence on the region's resources and expectations of political support on the part of some Arab countries and Iran, as well as Beijing's pretensions to be a reliable partner in international politics, there will be little scope for China to maintain political neutrality in the future. China's engagement in the region will be substantially determined by Sino-American relations. China's reputation for standing up against the premises and goals of American foreign policy has proven advantageous in cultivating its bilateral relations. However, with regard to U.S. policy in the Middle East it has behaved rather as a free-rider that as a "spoiler." Beijing is basically prepared to recognize the U.S. as the most important power for the stabilization of the region, but at the same time it tries to curb U.S. dominance through a more visible presence. A policy of containment directed against China, demanded in a number of clubs around Capitol Hill, is therefore unlikely to succeed. Through closer integration in Middle East initiatives, however, China's responsibility for finding a solution to the region's problems could be boosted. Multilateral engagement must also be in accordance with Beijing's wishes; otherwise it would feel that it was confronted with the problems but without being in a position to exercise the same kind of political influence as the U.S. [ABSTRACT FROM AUTHOR]