Local Issues of Chinese Direct Investment in Africa: The Case of China National Petroleum Corporation International Chad (2006–2013)

Abstract

Purpose

The aim of this chapter is to show how new players in an emerging market, through their multinationals, have strategized and operationalised their international interests. This international context consists of various stakeholders: states, civil society organisations, multinationals, local communities and institutions which define and regulate the power relations. This study highlights how CNPCIC, a Chinese multinational owned by the state, designs and implements its proclaimed ‘win-win’ cooperation strategy with its host country and the local community for an oil extraction project – called the Rônier Project – in southern Chad.

Methodology/approach

The analysis is based on a case study approach, especially concerning the town of Koudalwa, the oil-producing area in southern Chad. The author conducted qualitative research to collect the data, using ethnographic strategies consisting of field research, interviews with stakeholders.

Findings

Negative externalities as consequences of practices from CNPCIC underlie environmental degradation, socio-economic conflicts and governance problems, despite the existence of an alleged regulatory framework, the role of which is to avert the ‘resource curse’.

Organisations of local and international civil society oscillate between the logic of cooperation, alliance and confrontation with their main stakeholders, CNPCIC and the government.

The ‘win-win’ cooperation advocated by China is implemented in the form of commercial cooperation with full mercantilism where CNPCIC benefits from oil, the Chadian state benefits from oil revenue in the form of royalties and other stakeholders, such as the local communities, only benefit from a fraction of the revenues. The chapter concludes that, within this oil project, CNPCIC developed a corporate diplomacy stance within which, according to the circumstances, predation, philanthropy and strategic alliance are valued at the expense of corporate responsibility despite civil society advocacy for a responsible extraction.

Research limitations

Some stakeholders of the project declined the invitation to participate in the research. This may have influenced its findings.

Originality/value

The value of this chapter resides in the use of various theories (corporate diplomacy, stakeholder theory, resource curse) to explain the practices and interests of stakeholders within an oil project at different scales, both local and international.

Citation

Yorbana, S.-g. (2016), "Local Issues of Chinese Direct Investment in Africa: The Case of China National Petroleum Corporation International Chad (2006–2013)", The Challenge of Bric Multinationals (Progress in International Business Research, Vol. 11), Emerald Group Publishing Limited, Leeds, pp. 629-652. https://doi.org/10.1108/S1745-886220160000011030