SOUTH CHINA SEA STRATEGY
EXPANDING ENERGY INVESTMENT
EXACERBATING FRAGILITY IN AFRICA ?
SOUTHEAST ASIA
ENERGY
AFRICA
SOUTH CHINA SEA STRATEGY
AFRICA
From worrying to weird
Southeast Asia ' s BRI projects include the China-Laos high-speed railway , hydropower plants in Cambodia , and Indonesia ’ s first high-speed railway , connecting the cities of Jakarta and Bandung . This region ’ s growing markets , numerous manufacturing hubs and abundant natural resources offer Beijing considerable economic opportunities .
China is particularly trying to forge maritime links southward and establish more secure connections through the critical waterways of the South China Sea and Strait of Malacca . These efforts include ambitious port projects in the countries involved - Indonesia , Malaysia , Singapore and the Philippines .
China uses its involvement in these countries to shape the contentious maritime sphere in its interests . This has raised the concern that China would use its clout over BRI to assert claims over disputed territories in the South China Sea . It is likely that certain ASEAN claimant states would be constrained in their reactions to Chinese assertive steps in the South China Sea if they become large beneficiaries of China ’ s BRI investments .
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EXPANDING ENERGY INVESTMENT
China ’ s general approach of hedging against over-dependence on maritime routes via the Strait of Malacca , or on any one supplier of oil and gas , has not changed . Chinese firms are everywhere globally and will continue to buy up assets to guarantee access to resources . Look for China ’ s commodities traders to focus on deepening access and control of supplies in Russia and Central Asia while China ’ s petroleum sector hopes to draw in Saudi investment .
It ’ s also likely that China will begin seeking export opportunities for nuclear power projects , a move that would free up more oil for export in states like Saudi Arabia . At the edges , China Inc will also buy up downstream projects in Eastern Europe and the Balkans to establish beachheads in the EU .
China ’ s hydrocarbons import dependence is large now – 65-66 % of needs are met by imports – and are set to rise to as much as 80 % by 2030 due to falling domestic production alongside continued economic growth . Energy investments are increasingly important to ensure access to supply as China slowly expands its international presence .
EXACERBATING FRAGILITY IN AFRICA ?
China has invested in 293 FDI projects since 2005 to the value of some US $ 66.4 billion . In 2016 , China became the largest source of foreign funds for African projects , due in no small part to Chinese attempts to wrest the east of the continent into the OBOR ’ s embrace .
Despite the fanfare , 2018 presents very real challenges to Chinese attempts to secure alliances throughout the African continent . Local discontent with rising Chinese influence on the continent will need to be managed effectively ; commodity prices and rising debt levels are a concern along the entirety of the OBOR , and Africa is no different . China ’ s propensity to hire Chinese firms and Chinese workers on overseas infrastructure investments has not gone unnoticed ; paired with a never-ending , and seemingly unquestioning , line of credit from Chinese banks to African governments , the question of repayment is less sexy than the overall OBOR hype- but no less important . Africa is weary of colonial-style inflows , and China must constantly manage domestic perceptions and ensure stability if OBOR projects are to succeed in the long-term .
Finally , it must be noted that a pervasive infrastructure deficit in Africa has not emerged simply out of a global blindspot ; there are broader societal and political barriers at play that China ’ s cash-heavy approach may be failing to address . China ’ s disinterest in ensuring the transparency of local governance may ultimately backfire , exacerbating existing fragility instead of ensuring the stability China so desperately seeks .
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