The governments of Sudan and South Sudan have since been unable to make progress on several outstanding issues that peace deals and the official break up failed to fully address; namely border demarcation, the status of the disputed area of Abyei, and oil transit fees that the land-locked South must pay Khartoum for use of its oil infrastructure in the North.
For China, however, the failure of both sides to reach an agreement has a direct impact on its economic interests in both countries, which together rank as the seventh-largest supplier of crude oil to China, accounting for 5 percent of its imports in Diplomatic ties Since diplomatic ties with Sudan were established in , China has sustained good relations with successive governments in Khartoum. Mutual interest forged the strengthening of ties between Beijing and Khartoum.
With China becoming a net importer of oil in , such a project was in keeping with the goal of Chinese oil companies to invest in locations where Western competition was absent. As with other foreign oil companies operating in Sudan at the time, CNPC inevitably became inserted into an existing political economy of oil extraction linked to a protracted civil war with the South, whereby Khartoum and its local proxies displaced civilians from their land to ensure central government control of oil development.
The agreement brought with it a host of new issues, particularly regarding oil revenue sharing. With its Tibet and Xinjiang issues at home, China was eager to support the preservation of multi-ethnic regimes. A delicate balancing act From mid, Chinese diplomats began to craft a delicate balancing act through developing quasi-diplomatic relations with the South, establishing a Chinese consulate in the Southern capital, Juba, in However, in shifting its previously unwavering support for the ruling NCP elites in Khartoum, China demonstrated the flexibility of its foreign policy principles in practice when faced with pragmatic considerations and the imperatives of investment protection.
However, in practice, with the bulk of its oil investments straddling the insecure border regions now under the control of the Government of South Sudan GOSS , which continues to rely on Sudan for oil transportation, China still faces the difficult task of balancing its relations with the two neighbours.
