Even China has second thoughts on South Sudan after violence

JUBA, South Sudan — After South Sudan’s optimistic 2011 vote for independence, the country’s deadly December descent into ethnic fighting has tried the patience of Western donors, diplomats, humanitarian organizations and investors alike. But for African leaders, when the West demurs, there’s always China, with its deep pockets and generous credit lines.

Or is there?

As South Sudan’s biggest economic partner, consuming 80% of the oil that accounts for almost 99% of its revenue, China matters here.

But now, even the Chinese are unwilling to move forward on business contracts.

“Unfortunately, everything has changed,” Chinese Ambassador Ma Qiang said in a recent interview. “So everything is on hold.”

The world’s newest nation flushed away years of hard-won, expensive progress when a power struggle between President Salva Kiir and rival Riek Machar spilled into bloody ethnic violence Dec. 15. An estimated 10,000 people have been killed in the fighting between the Dinka and Lou Nuer ethnic groups, and an additional 860,000 have been displaced.

It happened just as South Sudan was poised to take off: 10 days after a business conference in Juba, the capital, where 500 Western companies weighed investment opportunities that the Economist predicted would result in the world’s fastest growth clip this year, 35%.

“You are not going to see the IMF and World Bank coming now,” said Toby Lanzer, United Nations humanitarian co-coordinator on South Sudan. “The IMF and World Bank were on the verge of significant engagement, and that has been dealt a blow.”

And those 500 interested companies? Also unlikely, analysts say.

The fighting began only days after the powerful Export-Import Bank of China was preparing to offer $2 billion in loans and credit to build six strategic roads, including a crucial 1,500-mile highway linking the capital with Sudan’s main port. The plan also called for construction of a hydropower plant in the state of Eastern Equatoria, bridges across the Nile (there are now just two), schools and hospitals in every county, a government conference center and a stadium.

And just two days before the December fighting began, Ambassador Ma met with Kiir to discuss the final stages of a Chinese plan to rebuild the chaotic airport in Juba, the capital.

Ma had planned to sign the airport deal after the weekend party conference of the ruling Sudan People’s Liberation Movement. But the political meeting ended in acrimony, triggering the bloody battles that pushed the fragile country to the brink of civil war. A cease-fire and peace talks deal signed last month haven’t stopped the fighting, and some analysts worry about prolonged instability and a guerrilla rebel campaign.

China has long maintained a no-strings-attached approach to doing business in Africa, with little involvement in conflict resolution. But the friction in recent years between Sudan and South Sudan, and now within South Sudan, has resulted in a marked change because of China’s interest in maintaining its oil supply.

The China National Petroleum Corp.’s investments in South Sudan’s oil industry are vital to the Chinese economy, Ma says, but Beijing’s legendary patience with high-risk environments has been tested.

Since South Sudan gained independence, oil production has repeatedly been interrupted or threatened by conflict as the nation’s leaders have launched war on each other, invaded Sudan and temporarily shut down production.

When President Kiir abruptly turned off the spigot two years ago in a clash with Sudan over oil transit revenue, it cost China’s national oil company millions. China exerted pressure on Kiir as well as Sudanese President Omar Hassan Ahmed Bashir to end the dispute and get oil flowing again, which came 14 months after the shutdown.

In the latest fighting, both Kiir and Machar appeared willing to sacrifice the lives of hundreds of innocent people to maintain the strongest position at the negotiating table. In the ethnic violence, Lou Nuer people were rounded up and killed in Juba; in rural areas, Dinka were slain.

After the violence erupted, Ma called on Kiir to agree to unconditional peace talks. Chinese Foreign Minister Wang Yi met the warring sides in Ethiopia, asking for an end to the violence.

“South Sudan could have a good future through political dialogue. Stop any violence or war or any conflict,” Ma said.

The fighting shut down oil production in Unity state and Chinese workers and engineers had to be evacuated, but production has continued in Upper Nile, Ma said.

The change in South Sudan’s prospects has been devastating.

“It was going to be the year of South Sudan, the year when it was all going to take off,” said Jose Garcia Barahona, country director for Oxfam.

Now, instead of economic growth, foreign aid is needed to head off starvation.

“It’s obvious to everybody that the priority must be lifesaving assistance,” said Lanzer of the U.N. The world body has launched a $1.27-billion emergency appeal as about 3 million people face acute hunger.

“What has happened is not only a terrific blow to those who have been directly affected, but it’s a blow to the aspirations of the country, because it would have been moving forward far faster … and now it’s moving backwards,” he said.

New roads, which Western interests usually don’t build because of the difficulty and expense, remain the key piece to transforming the economy and the lives of rural South Sudan residents, Ma said.

“In China, we have a proverb: If you want to reach somewhere, first you have to build a road. That’s our plan to help South Sudan and its people and government,” the ambassador said. “After building the roads, we can establish all development, more and more projects, industrial, agricultural and infrastructure. Everything can start.”

Of course, he said, if a peace deal is reached and the country stabilizes, China will be able to sign the airport contract quickly, perhaps even in March.

“Maybe next month, if everything is OK, everything is smooth.…” He trailed off, with a small regretful smile, shaking his head almost imperceptibly.

“But I think we will need time now. I’m afraid this political dialogue between the two sides needs more time. I think it will not be a short time before you can reach agreement and dissolve all the problems between them.

“So.…” Again the delicate pause. “We just wait.”

robyn.dixon@latimes.com