China’s Waning Influence in Angola

By Trefis: Exxon Mobil (NYSE:XOM) is starting production at Kizomba Satellites Phase 1 project in Angola this week. The project in offshore Angola is expected to produce a total output of 100,000 bbl/day of crude as the fields are developed further.

African exports to China have increased six-fold since 2000 alone, the bulk of it in oil, and this year, China surpassed the US and Europe as Africa’s largest trading partner. Starting from $11 billion in bilateral trade in 2000, Beijing racked up $160 billion dollars in trade with Africa by 2011, and for 2012Chinese businesses have also invested some $15 billion in Africa in 2012 alone—that’s up from $500 million in 2002.

A month ago we quantified that just the overt European bank undercapitalization (excluding spillover effects from counterparty liability and derivative exposure) resulting from non-performing loans, is a staggering €500 billion. These NPLs "reduce the capacity of banks to lend, hindering the monetary policy transmission mechanism. Bad debts consume capital and make banks more risk averse, especially with respect to lending to higher risk borrowers such as SMEs.

The value of the yen has fallen sharply since Prime Minister Shinzo Abe took office in December on a promise to defeat deflation, while the Bank of Japan’s decision this month to ramp up its asset-buying program has fueled its decline In theory, the yen’s depreciation should be positive for Japan’s trade balance.

The escalating dispute between China and Japan over an archipelago of rocky islets known as Diaoyu in China and Senkaku in Japan has curbed Japanese exports into China, forcing Tokyo to fast-track moves to distance itself economically from its larger neighbor.   In a recent report, the World Bank said the Japanese economy appeared to be contracting “in part because of political tension with China over the sovereignty of islands in the region.”  

Crude headed for a seventh weekly advance in New York, the longest run of gains in almost four years, amid signs of global economic growth and concern that oil facilities in North Africa are vulnerable to militant attacks.

South Africa’s President Jacob Zuma is visiting Angola, Africa’s third largest economy, and the continent's second-biggest oil producer. This is Mr. Zuma’s second trip since 2009, and he is expected to shore up economic and political ties with an aim to increase South African exports and cooperation in the oil sector. ​​South Africa and Angola have long had tight diplomatic and economic ties, but South African officials said they want to pick up the pace of trade with the southern African ...