The Sino-Angolan State Level Relations – a Constructivist Approach VIKTOR ESZTERHAI Senior analyst, China

The current US-led world order and China’s goals Three pillars: the American value system/Western values the U.S. military alignment system: security foundation for US leadership the international institutions (UN) Munich Security Conference, 2016

Hypotheses H1: There is Chinese/non-western type of international relations H2: China implements and tests her new, non-western type of foreign policy in Africa

The Guanxi – Chinese School of IR A type of social connections in traditional Chinese society – long forming period and very flexible The generalized form of xiao ( 孝 ) – the most important connection of the Chinese family Based on Confucian and the traditional Chinese society’s conventions and logic Each member of the society is stakeholder, determinates their everyday life (resources distribution, information flow, social status, social propositions, decision making mechanism…)

The Mechanism of Guanxi The members are interested in relationship: relation oriented The motivation is: to enlarge mianzi ( 面子 - face) and to provide resources Hierarchical and patriarchal: the stronger member leads the relationship BUT: more rights and autonomy – more duty Not rational, works in long run Rare conflict inside, no moral obligation and competition outside Negative: cost of maintenance, must accept hierarchy A asks B for favour, B can ask the favour back: value, and time is not defined

The case study: China-Angola Framework Agreement National Reconstruction Program BUT: Western donors, World Bank, IMF: staff-monitored program and show good performance for three trimesters before being eligible to receive financial support. China:China-Angola Framework Agreement (2003): $2-billion financing package in low interest rate concessional loan (Libor+1,5%), payable over 12 years, for public investment projects: only condition involve Chinese construction companies

Mechanism of Angola-China Framework Agreement Guarantor of the loan: National Bank of Angola (backed with oil) Ministry of Finance Angola EximBank of China Chinese Construction Company Related Ministry Angola Third Party supervision 3. Project finished 5. Apply for the pay out 6. Confirmation of the pay out 7. Pay out 4.A nnounce the finished project 1. Agreement between the related and financial ministries between Angola and China Involve partner from Angola 2. Tender and selection

Results + further extension of the program (0,5 billion USA dollar)

Mutually beneficial? CHINA: Commercial loans, not aid – diversify China’s investments Support for the Chinese companies + help to be multinational: international experience + reference for other tenders Win a partner in long term(oil) Enter the Angolan market: boost export Political interest: model for other African countries ANGOLA: Better conditions than Western donors: commercial loans, lower interest rates, and longer repayment time. Non-Chinese credit Boost oil export – economic development Cheap and fast construction No or few corruption – closed financial system No colonialism – partners

Guanxi logic in China Angola Framework Agreement The members are interested in relationship Long run perspective: not just for one business Hierarchical and patriarchal: the stronger member leads the relationship BUT: more attention to keep the smaller side’s autonomy: Angolan side chooses the project – Chinese finances it Moral goals – responsible for the smaller side The motivation is: to enlarge face and to provide resources + BUT: more rational Angola asked China for a favour…

Conclusions There is a Chinese/non-western type of international relations To understand the motivation and behaviours of China we have to turn to more culture-oriented models We have to be more open

Thank you for your attention!