As the saying goes, "the way is different, not the same", Angola and OPEC have come to this point.
A few days ago, Angola said that there was a disagreement with OPEC on crude oil production, OPEC's original crude oil production quota was 1.11 million barrels per day, but Angola advocated 1.18 million barrels, OPEC wants to raise oil prices by reducing production, but Angola wants to ensure foreign exchange earnings by increasing production, so based on different development directions, Angola decided to withdraw from OPEC.
(Angolan Foreign Minister Antonio)
Over the past decade, countries have withdrawn from OPEC, and with Angola's withdrawal, the number of OPEC members will be reduced to 12. However, according to expert analysis, Angola's current and future oil production is "insignificant" for OPEC. The opposite is not true for Angola.
As one of the largest oil exporters in the African region, Angola's oil and gas exports, which account for more than 90 percent of its total domestic exports, are arguably the main pillar of its domestic economic development. Previously a member of OPEC, Angola may receive some degree of protection and support in the event of instability in the global oil market. But once it breaks away from the group, Angola faces a greater risk of fluctuations in oil revenues.
Moreover, a single country has much less bargaining power and influence in the global oil market than OPEC collective members. OPEC can influence international oil prices by coordinating the amount of oil produced by its members, which is difficult for countries acting alone.
Therefore, Angola will have to take a lot of risks when it withdraws from OPEC.
As far as Angola is concerned, it must be very clear about the risks it will take in the future, and the reason why it has made this decision resolutely is because Angola has already prepared its own back road, and this back road is China.
(Chinese LNG vessel departs from China to Angola)
First of all, in the energy sector, China has always been the largest single market for Angolan oil. According to statistics, China imports nearly half of the country's total oil exports from Angola. This not only provides Angola with a stable source of income, but also allows Angola to be resilient to risks when oil prices fluctuate in the international market.
Second, Angolia, which is well aware of the risks to national security caused by a single energy export, has begun to gradually strive to diversify its economy. Just earlier this month, the Angolan foreign minister visited China. And the purpose of this visit to China is very clear, that is, to deepen China-Angola relations and win a mutually beneficial investment protection agreement with China.
Angolan Foreign Minister Antonio said that the agreement signed with the Chinese side took 12 years to reach and is of great significance to Angola because it covers all economic cooperation and investment between China and Angola. Antonio also said that under this protection agreement, Chinese companies will be greatly encouraged to invest in Angola, and Angola will also give Chinese companies maximum protection.
In fact, there are a number of ways in which China can help with Angola's economic diversification goals.
Today, the cooperation between China and Angola is no longer limited to the energy sector, as the first country to participate in the "Belt and Road", Angola also has Chinese investors in the mining, fishing and agricultural sectors. In these areas, through cooperation with Chinese companies, Angola can not only obtain technology transfer and improve the technological level of its own enterprises, but also promote the modernization and diversification of local industries.
(Airport built by Chinese companies in Angola)
In addition, infrastructure is essential for economic diversification, and China has extensive experience in this area and can help Angola with the construction of transport networks, power systems and communication facilities, which are important building blocks for the development of other industries.
Finally, at the beginning of this month, the mainland also announced a policy that 98 per cent of taxable products from Africa's least developed countries, including Angola, will be exempt from tariffs when exported to China.
You know, this policy is not simple. The exemption from tariffs means that Angolan products can be more competitive than those of non-duty-free countries, which can greatly promote Angolan exports to China and increase the competitiveness of Angolan goods in the Chinese market. With the increase in exports to China, Angolan production enterprises are likely to expand their production scale in response to the growth of market demand.
The expansion of production and the rise of new industries often require more labor, which creates more jobs in the region. Economic growth and the increase in employment opportunities will effectively reduce the level of poverty and improve the living standards of the Angolan people, and the economic development of Angola will naturally diversify, and foreign exchange earnings will not depend solely on energy exports.
(China and Angola cooperate in the field of fisheries)
In other words, China's tax exemption policy provides a good opportunity for Angola and other least developed countries to promote economic development, diversify the industrial structure, and enhance the competitiveness of international trade. For Angola, making full use of the dividends brought by this policy will help it promote the structural transformation of the country's economy.
In short, with China's backing, Angola has more than one way to go.