Dangers lurk in China’s rush for resources

By Michael Richardson, for Straits Times, Feb6 2012

 South Sudanese soldier stands guard near a China-owned crude oil tank. AFP

CHINA’S meteoric rise to become the world’s second-biggest economy and a global manufacturing centre is sustained by ever-growing imports of raw materials and increasing investment abroad, often in under-developed countries shunned by the West for alleged human rights abuses or because they areconsidered too dangerous.

These investments have been accompanied by Chinese managers, technicians and workers, employed by state-owned firms spearheading China’s commercial expansion into Africa, Asia and Latin America. These companies often bring their own labourers to do work Western firms would usually hire local employees to perform, accessing resources such as oil, minerals and timber.

With many of its 1.3 billion people still poor, China needs to provide as many jobs as possible at home and abroad. To complete projects efficiently, Beijing wants a workforce that understands the Chinese language.

Chinese companies had 812,000 employees overseas at the end of last year, double the number in 2002. Most were labourers involved in construction, mining and other ventures, often in remote areas. Outbound Chinese investment, excluding the financial sector, amounted to US$60 billion (S$74.5 billion) last year, about treble the figure three years earlier.

But this expansion has come at an increasingly heavy human cost. This was underscored by the recent capture of 54 Chinese citizens in Sudan and Egypt. Chinese are becoming sought-after targets by insurgents, criminal gangs and, potentially, terrorists – and China has only limited power to protect its nationals and ensure their safe release.

The 25 Chinese seized last month on their way to work at a cement plant in Egypt’s sparsely populated Sinai peninsula were quickly freed. But the 29 Chinese hostages grabbed by rebels after attacking the camp of a Chinese road-building company in Sudan’s oil-rich South Kordofan region proved more difficult to handle. The rebels used the Chinese as leverage in their separatist struggle.

This prompted Beijing to put pressure on Sudan, which supplies about 5 per cent of China’s crude oil imports. Deputy Foreign Minister Xie Hangsheng said last Tuesday that China ‘attaches great importance to protecting nationals overseas’ and was ‘deeply shocked’ by the abduction. China sent an inter-agency group to Sudan to help the Chinese embassy there try to secure the release of the Chinese. In Sudan itself, a small group of Chinese private security contractors joined more than 1,000 Sudanese troops in the rescue effort.

China has made non-interference in the internal affairs of other countries a key part of its foreign policy, one that Beijing says makes it different from colonial powers. But China is being drawn deeper into turbulent Sudanese politics, an entanglement that has intensified since South Sudan seceded from Sudan in July.

Nearly all the oil reserves are in the south. But the export pipelines, built by China, run northwards through Sudan. South Sudan recently stopped oil production after Sudan imposed a hefty transit fee. Oil from fields in newly independent South Sudan is pumped mainly by three Asian state-controlled energy firms from China, Malaysia and India.

The hostage-taking in Sudan and Egypt were not isolated incidents. The Chinese business magazine Caixin last week listed 13 similar attacks on more than 100 Chinese citizens in 10 countries over the past five years. The countries included Afghanistan, Cameroon, Colombia, Ethiopia, Myanmar and Yemen. Fourteen of the victims died.

As China’s international presence and influence grow, calls are mounting at home for better protection of Chinese nationals abroad. Global Times, which often voices nationalistic views, lamented last week that ‘China is not powerful enough at this time to protect every Chinese citizen scattered around the vast (African) continent’.

China launched a rescue mission with ships and planes to evacuate nearly 36,000 citizens from Libya after civil war erupted there last year. The Chinese military was closely involved in the rescue, which was widely praised at home. In December, the Chinese border patrol force launched joint river patrols on the Mekong with its counterparts from Laos, Myanmar and Thailand following the killing of 13 Chinese crew members from two cargo vessels plying the Thai section of South-east Asia’s longest river.

China’s military budget – officially put at US$95 billion this year, second only to that of the United States – is aimed at modernising the armed forces and increasing their ability to project power overseas. There have been calls in China for Chinese commandos to be sent to Sudan to emulate the recent rescue in Somalia of an American aid worker and a Danish colleague by US special forces.

China’s response to the hostage-taking of its nationals will be closely watched by neighbouring Asian states. It would cause alarm if it involved establishing foreign bases and deploying the Chinese military.

However, there is no sign so far that China is moving in such a controversial direction. A more likely immediate outcome is tighter security arrangements by Chinese firms overseas and increasing use of former military personnel to guard vulnerable groups of Chinese.

The writer is a visiting senior research fellow at the Institute of Southeast Asian Studies.


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