Economic Diplomacy And Nigeria – China Relations (1999-2007)

ABSTRACT

China is essentially a state par excellence, a strong state like the United States

with expansionist behaviour and attitudes. Demographically, China has the

largest population in the world, 1.3 billion inhabitants that is more than the

entire African continent. It has the third largest stock of foreign direct

investment after the United States and United Kingdom. Its ideology has been

the socialist market economy which embodied elements of pragmatism, free

market and state dirigisme. In the past few years, especially since the

declaration of the Beijing Consensus, intellectuals, Western media, human

rights organization and the International Monetary Fund have intensified their

criticisms regarding Chinese policy towards Africa, especially its loan and

foreign investment practices and its behaviour and attitudes towards oil

producing states. Regrettably, China’s increasing engagement with Africa has

largely gone unnoticed in African studies. To worsen the situation, very few

African scholars have devoted quality time to critically anlayse Nigeria-China

relations since the end of the Cold War. This study has been designed to

bridge this gap in the literature. The central questions that formed the

foundation of the inquiry are; what were the determinants of Nigeria – China

relations between 1999 to 2007? To what extent has economic diplomacy

impacted on the trade relations and inflow of foreign direct investment from

China to Nigeria within the period under review? Theoretically, we anchored

our analysis within the liberal theory of economic development and

underdevelopment. Our choice of this theory is based on the fact that Nigeria

– China relations is based on partnership, mutuality, reciprocity, and common

prosperity, and not on any form of European or American neocolonialism and

imperialism. The liberal theorists believe that interdependence between the

developed and developing countries are beneficial to both. This theory is

related to the win-win theory of international relations. The win-win theory

implied that liberal economic cooperation through trade flows, foreigndomestic

flows, technology transfer and integration in the global value chains

and aid flows, should bring proportional benefits, which otherwise the

partners would not have access to before entering into these relations. We

adopted qualitative research design and relied mainly on documentary

sources of data collection and content analysis of primary and secondary

sources of data. We collected data from Chinese Embassy, Nigeria’s Foreign

Affairs Ministry, Nigeria Investment Promotion Commission, Central Bank

of Nigeria and Nigeria Immigration Service among others. More

importantly, we relied on current journals, textbooks, magazines, conference

papers and other secondary sources of data. To ensure the validity and

reliability of our methods, we relied on content of analysis of available

information. After critical analysis of available data, the study reveals that

China’s dynamic economic growth is fueling an ever increasing demand for

Nigeria’s oil. In fact, guaranteed long term access to Nigeria’s relatively

underexploited natural resources clearly tops China’s agenda. In 2005, China

through her corporation, Petro-China singed an $80 million contract with

Nigerian Government to locate upstream oil and gas that will guarantee

30,000 barrels per day to China over a period of five years. China has

invested over $4 billion worth of investment in exchange for oil in Nigeria.

At present, just over 30 percent of China’s oil requirements come from

Africa, mostly from Sudan, Nigeria and increasingly the Gulf of Guinea.

Beijing has singed more than 40 oil agreement with different African

countries including Nigeria. The study also shows that while china’s principal

interest in Nigeria is access to natural resources, the country also provides

new markets and investment opportunities for China’s growing economy.

Currently, about 750 Chinese enterprises are active in Africa with total

investment of over $1 billion and many of them are doing business in

Nigeria. In conclusion, china is both a tantalizing opportunity and a terrifying

threat to Nigeria. On the one hand, China is just the tonic that mineral rich,

but economically ailing Nigeria needs. On the other hand, China’s effort to

flood the Nigerian market with cheap products is a great threat to the

Nigerian economy.