China and Angola: From the Pioneering “Angolan Model” to a “New” Relationship

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2024-11-25

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East-West Center

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China’s relationship with Angola is an important case in the larger strategic competition between Beijing and the economically developed, liberal democratic states for political influence in the Global South. China has provided large loans to Angola since the 2000s and, in return, acquired Angola’s petroleum to meet China’s high domestic energy demands. Angola has repaid the majority of its debt to China in the form of extracted oil. This contractual arrangement is known as the “Angolan model.” However, China’s large loans only enriched a small segment of Angola’s elite circle and spread serious corruption. The drop in global oil prices since 2014 has left Angola in serious economic distress. Angola’s oil production has also peaked. The “Angolan model” of collateralizing oil for loans became difficult to sustain. Angola’s new administration is seeking to develop non-oil industries to diversify its economy away from its traditional dependency on oil exports. China’s role, nevertheless, will not decrease and may increase. While oil remains paramount for China and Angola, cooperation between the two countries is gradually expanding into broader areas beyond its petroleum.

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8 pages

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