China is still reluctant to intervene in the border dispute in Sudan. An $8 billion loan that was committed by Beijing has yet to be made to South Sudan while Chinese officials rejected a proposal to finance the construction of a pipeline in the South.
Newly independent South Sudan’s central bank governor, Kornelio Koriom Mayik, told the Financial Times that only a fraction of the money promised by China has arrived yet.
The South Sudanese had hoped that China would help them build a pipeline through east Africa so they won’t have to use export infrastructure in the north anymore. Khartoum confiscated South Sudanese oil sales in January of this year to make up for what it said where unpaid transit fees.
According to Mayik, “The Chinese didn’t agree to build a new pipeline. They said ‘we built one [in the north already], you use it’.”
China has made billions worth of investments on both sides of the border but in the escalating conflict between the two Sudans, it may be forced to pick sides.
South Sudan’s minister in charge of reconciliation urged China in May to play “a more active role” to help resolve disputes over borders and oil exports. “By trying to move away from Khartoum so as to get closer to South Sudan and trying not to get too close to South Sudan so as not to cause displeasure to Khartoum — neither Khartoum nor Juba will be happy with China,” said Pagan Amum Okech.
South Sudan declared independence last year after decades of war with the north. Despite a 2005 peace deal, possession of oil reserves which are situated near the border remains a source of contention. As recently as last month, hostilities broke out again with north Sudanese air forces reportedly bombing oilfields and the South attacking a border town.
Landlocked South Sudan has two-thirds of the former unified Sudan’s oil output but needs access to northern pipelines and port facilities to sell overseas. South Sudan pumps around 350,000 barrels per day, according to government data. The north needs the entirety of its oil production, some 115,000 barrels per day, to meet domestic demand. The Chinese have to maintain stable relations with both governments if they are to continue buying Sudanese oil.