China scores fatal own goals in competition for post-Qaddafi Libya

Chi­na has scored two near fatal own goals in the race for influ­ence and lucra­tive con­tracts in oil-rich post-Qaddafi Libya.

A doc­u­ment dis­closed this week­end tes­ti­fies to Chi­na prepar­ing to sup­ply as late as July weapons in vio­la­tion of Unit­ed Nations sanc­tions to Libyan leader Moam­mar Qaddafi’s forces who were locked into bat­tle with NATO-backed rebel forces. Adding fuel to the fire, the head of Libya’s rebel Tran­si­tion Nation­al Coun­cil (TNC), Mustafa Abdel Jalil, has accused Chi­na of block­ing the release of his country’s frozen assets.

The dis­clo­sure and accu­sa­tion puts Chi­na at a dis­ad­van­tage as it com­petes with Rus­sia, India, South Africa and Brazil in repair­ing strained rela­tions with Libya’s new rulers. The five nations, mem­bers of the UN Secu­ri­ty Coun­cil, refrained from sup­port­ing a res­o­lu­tion in March that autho­rized the impo­si­tion of a no-fly zone in Libya and formed the basis for NATO sup­port for the anti-Qaddafi rebels. The five nations have repeat­ed­ly denounced NATO bomb­ings of Qaddafi tar­gets over the past six months.

In con­trast to Chi­na, Rus­sia scram­bled in the past week to turn the page with the rebels and pro­tect bil­lions of dol­lars in arms, ener­gy and infra­struc­ture deals con­clud­ed when Mr. Qaddafi was still in pow­er. Rus­sia sent a high-lev­el envoy to Thursday’s Friends of Libya con­fer­ence in Paris where NATO mem­bers and Qatar pledged sup­port for the rebels and moved to unfreeze Libyan assets. Rus­sia also rec­og­nized the TNC as Libya’s legal author­i­ty, sig­nalling that it no longer was seek­ing to nego­ti­ate a com­pro­mise solu­tion reject­ed by the rebels with the oust­ed and now fugi­tive Libyan leader. To stress that it means busi­ness, Rus­sia has also invit­ed the rebels to meet in Moscow to dis­cuss Russ­ian sup­port for post-Qaddafi Libya.

The Russ­ian moves con­trast stark­ly with China’s posi­tion, which increas­ing­ly appears in Libyan eyes to be duplic­i­tous and tar­nish­es its image across the Mid­dle East and North Africa whose pop­u­la­tions are close­ly watch­ing events as they unfold in Libya and share the aspi­ra­tions of those who suc­ceed­ed in oust­ing the third auto­crat­ic leader this year.

Chi­na in recent months refused to rec­og­nize the TNC and has yet to do so, but sought to upgrade its rela­tions with the rebels in a bid to hedge its bets. That effort has been cast in a far more unfavourable light by the four-page Libyan doc­u­ment dis­closed by Cana­di­an news­pa­per The Globe and Mail that shows that state-con­trolled Chi­nese arms man­u­fac­tur­ers were pre­pared to sell weapons and ammu­ni­tion worth at least $200-mil­lion to the Mr. Qaddafi in late July. TNC offi­cials said the doc­u­ments explained the ori­gin of brand new weapons cap­tured on the bat­tle­field by the rebels from Qaddafi forces.

The doc­u­ment reports on meet­ings in Bei­jing start­ing July 16 between Qaddafi secu­ri­ty offi­cials and rep­re­sen­ta­tives of three state-con­trolled weapons man­u­fac­tur­ers — Chi­na North Indus­tries Corp. (Nor­in­co); the Chi­na Nation­al Pre­ci­sion Machin­ery Import & Export Corp. (CPMIC); and Chi­na XinX­ing Import & Export Corp. The Chi­nese com­pa­nies offered their entire stock­piles for sale, and promised to man­u­fac­ture more sup­plies if nec­es­sary. “The com­pa­nies sug­gest that they make the con­tracts with either Alge­ria or South Africa, because those coun­tries pre­vi­ous­ly worked with Chi­na,” the memo says. Alge­ria last week gave refuge to one of Mr. Qaddafi’s wives as well as two of his sons and a daugh­ter.

The Chi­nese dilem­ma result­ing from the dis­clo­sure of its sup­port of Mr. Qaddafi and its fail­ure to seek to repair rela­tions with the TNC in a way that demon­strates that it is break­ing with past pol­i­cy towards Libya is cer­tain to have been noticed in Syr­ia and Yemen where mass anti-gov­ern­ment protests have suc­ceed­ed in mak­ing the oust­ing of their embat­tled lead­ers a ques­tion of when rather than if. It also is like­ly to revive debate about China’s role in auto­crat­ic coun­tries in the Mid­dle East and Africa where Bei­jing has been secur­ing access to resources while turn­ing a blind eye to the nature of the regimes they are get­ting into bed with.

The stakes for both Rus­sia and Chi­na in the Mid­dle East and North Africa are high despite an appar­ent con­sen­sus among Asian ana­lysts that China’s com­mer­cial inter­ests in Libya are rel­a­tive­ly small. Nei­ther coun­try can ignore a geo-strate­gic region that is home to some of the world’s most impor­tant oil and gas reserves which have giv­en it not only polit­i­cal but also finan­cial clout as well as key ports and whose pop­u­la­tions sym­pa­thize with restive Mus­lim pop­u­la­tions across the globe.

In the com­pe­ti­tion between Rus­sia and Chi­na, Libya’s sig­nif­i­cance goes beyond its bor­ders. Rus­sia unlike Chi­na has as an ener­gy pro­duc­er a vest­ed inter­est in high oil prices and in main­tain­ing mar­ket share. By con­trast, Chi­na, as a major importer, prefers low­er prices.

In a bid to keep the door open to the rebels and retain a bar­gain­ing chip, Chi­na agreed last week to the release of $15 bil­lion of the in total $170 bil­lion in Libyan assets frozen by the inter­na­tion­al com­mu­ni­ty. In response, TNC head Jalil acknowl­edged that Chi­na while not vot­ing for the no-fly zone had refrained from exer­cis­ing its right of veto in the Secu­ri­ty Coun­cil.

Chi­nese Vice For­eign Min­is­ter Zhai Jun, speak­ing after a meet­ing in Paris last week with the TNC’s num­ber two, Mah­mud Jib­ril, said that “Chi­na is ready to grant recon­struc­tion aid to Libya… and hopes that the TNC will take into account China’s con­cerns, respect its com­mit­ments and guar­an­tee the inter­ests of Chi­nese busi­ness inter­ests in Libya.”

China’s trade min­istry esti­mat­ed that Chi­na has 50 large-scale projects in Libya worth some $18.8 bil­lion. Chi­na evac­u­at­ed an esti­mat­ed 36,000 Chi­nese work­ers from the coun­try at the begin­ning of the con­flict.

A senior Libyan oil offi­cial cau­tioned last month that Chi­na along­side Rus­sia and Brazil may be at a dis­ad­van­tage to NATO coun­tries in the com­pe­ti­tion for post-Qaddafi recon­struc­tion con­tracts. TNC offi­cials have said that they would hon­our Qaddafi-era con­tracts with a caveat: pro­vid­ed they are not found to have involved cor­rupt prac­tices. Few con­tracts were con­clud­ed in Mr. Qaddafi’s Libya with­out his fam­i­ly or asso­ciates hav­ing had mate­r­i­al ben­e­fit.

Libya is but the most imme­di­ate bat­tle­ground on which the world’s major pow­ers com­pete for influ­ence in a key region where polit­i­cal reform and escape from the yoke of auto­crat­ic rule is going to be the dom­i­nant theme for years to come and will dra­mat­i­cal­ly redraft its polit­i­cal land­scape. If the Unit­ed States and Europe have a strate­gic advan­tage in Libya, Rus­sia unlike Chi­na is work­ing hard and furi­ous to nar­row the gap.

The bat­tle­field is like­ly to shift in the not too dis­tant future to Syr­ia. Both Rus­sia and Chi­na oppose US and Euro­pean sanc­tions against the embat­tled regime of Pres­i­dent Bashar al Assad, call­ing on both sides to refrain from vio­lence and enter into a dia­logue. But if Libya is any­thing to go by, Rus­sia is quick­er on its feet to read the writ­ing on the wall. China’s fail­ure to do so will be at its own per­il.

About The Author:
James M. Dorsey is a senior fel­low at the S. Rajarat­nam School of Inter­na­tion­al Stud­ies at Nanyang Tech­no­log­i­cal Uni­ver­si­ty in Sin­ga­pore and the author of the blog, The Tur­bu­lent World of Mid­dle East Soc­cer.

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