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China's Foreign Aids and Human Rights Concerns - Thoughts Provoked by Darfur Humanitarian Crisis

By Zhou Qi
0 CommentsPrint E-mail Chinahumanrights.org, October 29, 2009
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The humanitarian crisis in Darfur, Sudan, raised China a brandnew subject in the field of international relations: what attitudes and manners should China adopt in treating human rights issues in its major recipient countries when it is trying to establish an international image of a responsible nation and meanwhile maintain the increase of its aid to the third world, which is meant to be mutual beneficial in the form of joint venture and cooperation.

The year of 1995 was a turning point of China's overall reform in its foreign aid framework. The target was, based on the "grand strategies of economy and trade" put forward by Minister of Foreign Trade and Economic Cooperation Wu Yi in 1994, to integrate foreign trade, capital flow and international economic cooperation and boost China's economic growth by making use of the internal and foreign funds, resources and markets. As a tool of China's participation in the international economic cooperation, foreign trade programs should implement the strategic ideas raised by the "grand strategies". To achieve this goal, China needs to pursue fund and the diversification of the foreign aid forms while considering the benefits of both the recipient countries and itself. After that, preferential loans provided by financial organs became the main forms of China's foreign aid and joint-venture and cooperative programs were given more heeds and encouragement.

The oil exploration project in Sudan is a successful model of China's mutual benefit cooperative programs. The exploration of Zone Six of the Sudanese oil field by China National Oil and Gas Exploration and Development Corporation was China's first example of exploring overseas oilfield with preferential loans after the country changed its foreign development and aid strategies in 1995. The corporation started, as early as 1994, to seek overseas oil resources to resolve China's oil resource shortage. Learning that the Sudanese government was seeking foreign investment for its internal oil exploration, the corporation performed a preliminary program evaluation and sent technical staff to Sudan for a field survey. After the negotiation with the relevant department of the Sudanese government, both sides decided to cooperate in exploring the oil resource following international norms, i.e. to distribute the oil output according to a certain ratio. At the same time, the program was submitted to China's Ministry of Foreign Trade and Economic Cooperation for approval and it was the time when the Chinese government launched its reform on the foreign aid policies. The program soon gained supports from the ministry and the Export-Import Bank of China. In September 1995, the Chinese government signed with Sudan to provide it with a 150 million RMB preferential loan (the interest of the preferential loan is lower than normal, the margin is subsidized by the government foreign aid fund). After three months, the Export-Import Bank of China reached a loan agreement with China National Oil and Gas Exploration and Development Corporation. The drilling started in January 1997, in the Zone Six of the oil field. Thanks to good performances and credibility of Chinese companies, the corporation then acquired the exploration rights of oil-rich Zone One, Two and Four and also 40 percent of the stock and the management rights of the oilfields, claiming the triumph over the competition with other nine transnational corporations. These again brought about a large sum of oilfield construction contracts.

Sine 1997, China has become the largest foreign investor in Sudan. China's corporations are very active in Sudan's energy-related sectors including oil pipe construction, power and water conservancy. China is also the biggest participant of Sudan's petroleum industry, playing an important role in exploring and prospecting for the oil. China National Petroleum Corporation is the largest stockholder of the Greater Nile Petroleum Operating Company. China is also the largest trade partner of Sudan. Sudan's export to China accounts for 71 percent of its gross export turnover and Sudan's import from China accounts for 21 percent of its total. Sudan is China's third largest trade partner in Africa and its trade with China accounts for 13 percent of China's entire trade with Africa. In 2006, thanks to the development of petroleum industry and oil export, the economic growth rate of Sudan reached 13 percent, the first place in Africa. Petroleum outputs accounted for 70 percent of Sudan's export turnover, reaching 5.25 billion US dollars in 2006. It is commonly recognized that Sudan's economic growth should attribute to PetroDar Operating Company (PDOC in short, which is an international consortium jointly established by China National Petroleum Corporation, Petronas, the Greater Nile Petroleum Operating Company, China Petrochemical Corporation and Al Thani Corporation from United Arab Emirates.)

Yet the deterioration of Sudanese political situation was receiving more and more concerns from the international community. In February, two tribal anti-government armed forces — Sudanese Liberation Army and the Sudanese Justice and Equality Movement — were successively founded in Darfur. They opposed with force the Arabic Sudanese government, accusing it of implementing discriminatory polices toward them during the past decades and condemned Sudanese President Omar Al-Bashirs to use an Arabian militia organization, called Janjaweed, to perform retaliation toward them in Darfur. According to the UN estimation, assaults of Arabian militia since 2003 left over 200,000 people killed and 2.5 million others homeless.

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