Politics

China and India Battle for Influence in Africa: Part 1

Written by Gaurav Bhola, MSM, Managing Editor & Community Manager on July 25, 2007 8:09 am EST

So far, China is winning the race of influence for Africa’s resources, outpacing India in the level of investments. However, India, Africa’s traditional friend is ready for the challenge. China’s recent interest in Africa is tied to its thirst for oil, the main reason for an aggressive push into the continent. China’s average 9 percent economic growth rate over the last 20 years has created an ever growing demand for energy.

The Asian giant’s primary energy consumption grew by 8.4 percent in 2006, compared with 2.4 percent growth rate of global consumption. The growth in primary energy consumption by China accounted for 15.6 percent of global consumption. China’s reliance on oil imports was firm at 47 percent in 2006. In addition to oil, China needs raw materials. Also, the country’ lack of natural oil reserves has made it more dependent on imported oil.

The dependency on oil is also the bane of China’s neighbor India, the other Asian giant. Even though India is domicile to more than 15% of the global population, it uses only about 2.3 million barrels of oil per day which is 3% of daily global oil production. Comparatively, China consumes 7.6% of the global oil supply, a population nearly 20% larger than India’s. Meanwhile, the U.S. with a population 30% less than that of India’, imbibes more than 20% of global oil.

It is forecasted that by 2025, India will more than double its current oil consumption to over 5 million bpd. At the moment India is immensely dependent on oil imports, about 70% of India’s oil is imported. In order for India to sustain the economic progress, the thirst for oil and gas will only grow. Hence, India with concerted focus has made forays into Africa for investment.

Unlike China, India’s sincere approach resonates at a visceral level with Africans. India endears itself amongst the populace at a local level by promoting upliftment projects, thus garnering goodwill traction when seeking investment.

Recently, India inaugurated a pan-African e-network project that will link people in Africa’s 53 countries. The e-network will let hospitals and schools throughout the continent link with premier institutions in India. The Indian initiative of tele-medicine and tele-education will bring benefits of healthcare and higher education to the African people.

India hopes that this project will build upon traditional Indian goodwill and influence in Africa. India has deep historical, cultural, and trade ties with Africa dating back several centuries, and its support for the Non-Aligned Movement (NAM) and decolonization are well respected.

Nevertheless, India’s influence has been eclipsed by China’s. Over the years China’s interest in Africa has flowered.

Part 2: China and India Battle for Influence in Africa: Part 2

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2 Responses to “China and India Battle for Influence in Africa: Part 1”

retyur Says:
August 9th, 2010 at 12:53 pm
Oil demand/prices over the next decade will to a large degree be driven by emerging economy demand at the margin. Here is a simple thought experiment using Chinese demand to generate some rough “back of the envelope” forecasts:
- China moves from 3 bbls/person/year to the South Korean per capita consumption level of 17 bbls/person/year over the next 30 years
- No peak in global production

Result: In next 10 years we must find 44 million BOPD - 26 million BOPD to maintain supply and 18 million BOPD to keep up with demand increases.

If you superimpose peak production on top of this demand profile using the following parameters oil prices would increase approximately 250% in real terms over next 10 years – most likely something would give far before that price level:
- Oil demand elasticity of -0.3
- Current production 84 million BOPD, current price US$ 80
- Peak production 100 million BOPD
- Post peak decline rate of 3-4%

If you want to try the china oil demand or the peak oil models for yourself using your own assumptions they can be found at Enquirica in the “Research” section: http://www.enquirica.com/index.php?option=com_content&view=article&id=11&Itemid=13
de goedkoopste condens droger Says:
August 29th, 2010 at 2:49 am
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