China’s regime agnostic diplomacy in Africa–investing in countries irrespective of a government’s adherence to the rule of law–holds inherent risks for Chinese investments and regional stability.
China has long hailed its noninterventionist strategy of engaging with any type of sitting government regardless of how they came to power. Yet, the legal authority of a government and its commitment to upholding the rule of law have fundamental implications for stability and prospective returns on investments. China’s experience in Niger provides an instructive illustration.
In March 2025, three Chinese oil executives working for the China National Petroleum Corporation (CNPC) and its subsidiaries were expelled from Niger. This represented the latest setback in China’s dealings with the military junta of General Abdourahamane Tchiani who seized power in July 2023. The regime had previously terminated the license of a Chinese-owned hotel in Niamey after accusing it of “discriminatory practices and administrative violations.” Matters escalated in May when the military government ordered CNPC and its oil refinery, Soraz, to suspend the work permits of expatriate employees with more than 4 years of service.
There are inherent financial risks to transacting deals in contexts where constitutional rule has been overthrown.
These developments, coming on the heels of the junta’s strategy of resource nationalism, economic populism, and revolutionary fervor against perceived foreign domination, threaten China’s sizable investments in Niger. This includes the development and operation of the Agadem oil field by CNPC and the 2,000-km (1,240-mile) oil pipeline that runs from the isolated southeast of the landlocked country to the Atlantic seaport of Sèmè in neighboring Benin. A key element of China’s One Belt One Road strategy (known internationally as the Belt and Road Initiative) in the Sahel, the pipeline began operations in 2024–after more than a decade of development and $5 billion in investments. The Soraz refinery was completed in 2011, with a CNPC investment of $980 million.
China became the main financial backer of the Niger junta after shifting support from its longstanding collaborative relationship with the previous, democratically elected government of President Mohamed Bazoum. Despite initially calling for a swift return to constitutional rule, China changed tack and became the regime’s leading international partner. It even extended the junta a $400-million bailout–undermining the sanctions imposed by the African Union (AU) and the Economic Community of West African States (ECOWAS) for the junta’s extraconstitutional seizure of power.
Despite this transactional approach, much of China’s dealmaking in Niger has turned sour.
Following the military coup, there has been a 66-percent spike in militant Islamist group-linked fatalities in Niger and more than a dozen major ambushes on Nigerien security forces that have killed hundreds of soldiers.
Another militant group, le Front patriotique de libération (FPL) has launched attacks on the pipeline–resulting in a massive oil spill and the stoppage of operations–and has demanded the release of President Bazoum. There are also significant risks to Chinese workers, with the FPL repeatedly calling on China to end its dealings with the junta and suspend CNPC activities in the country.
This instability complicates Niger’s ability to repay its loans, meaning China stands to lose a lot of money. China is also suffering from reputational damage from its perceived close association with the junta, which is viewed as having become increasingly repressive toward citizens.
Chinese Investments in Niger Fraught with Risk
China is Niger’s second-largest foreign investor after France, with a current foreign direct investment of $2.3 billion. PetroChina, CNPC’s parent company, concluded a production sharing agreement with the civilian government of President Mamadou Tandja in 2008 to develop the Agadem oil field. Production started in 2011 under the government of President Mahamadou Issoufou. PetroChina also invested in building the Soraz refinery near the Nigerian border, taking a 60-percent stake, with a capacity of 20,000 barrels per day (bpd) mostly for the domestic market. The Agadem-Sèmè oil pipeline, the longest of its kind in Africa, comprised the second part of the project with a maximum output of 90,000 bpd for the Chinese market.
China has two additional major projects in Niger, a joint venture between China National Nuclear Corporation (CNNC) and the Niger government to develop the Azelik uranium mine and an agreement on hydrocarbons between China’s oil and gas giant, Sinopec, and President Bazoum signed in 2023.
China has also sought to expand its arms sales to Niger and its fellow juntas in Burkina Faso and Mali. Collectively, the three military governments have received at least 10 shipments of Chinese weaponry in 2023 and 2024. These were delivered by China North Industries Corporation (NORINCO), which established an office in Senegal in 2023 (its fourth in Africa) to expand operations in the Sahel. The deliveries included light and heavy armaments, an assortment of combat (including amphibious) vehicles, drones, and other hardware, as well as instructors.
The junta’s strategy of resource nationalism, economic populism, and revolutionary fervor against perceived foreign domination threatens China’s sizable investments.
There are inherent financial risks to transacting deals in contexts where constitutional rule has been overthrown or disregarded, however. The junta in Niger made sweeping changes to its agreement with CNPC in March 2025, demanding back taxes, equal pay scales between locals and expatriates, more locals in leadership positions, and all subcontracting to local companies. These decisions were not made via a mediated process or by an independent arbitrator but a military junta, which governs by fiat. This injects considerable uncertainty and capriciousness into how laws are interpreted and applied.
The deterioration of relations between China and the junta can lead to a breach of contract given that Chinese firms are entitled to recoup their investment. However, they have little recourse, given that the government overthrew the constitution, compromised the judiciary, and governs by decree.
Fatalities linked to militant Islamist groups have surged under the military junta and are on pace to reach 1,400 reported deaths in 2025–a nearly three-fold increase from 2022. These militant groups have also taken control of more territory, including over key roads to Niamey, leaving the capital increasingly isolated.
The Nigerien junta has missed four debt payments to international lenders and has now defaulted on $519 million worth of debt payments. This has been accompanied by the military government revoking oversight laws that require transparent accounting of the defense sector.
Meanwhile, human rights violations linked to the military government are mounting. China, thus, faces the political risk of being seen as the key foreign actor propping up the unpopular regime.
Ongoing disputes between the Nigerien junta and Benin, meanwhile, have caused repeated border closures. In May 2024, Benin banned the loading of oil destined for China at Sèmè terminal. This prompted an intensive Chinese mediation initiative to get the oil flowing again, involving the Chinese embassies in Cotonou and Niamey with Foreign Minister Wang Yi personally leading some of the talks.
These mediation efforts continued at the Ninth Forum on China-Africa Cooperation (FOCAC) in Beijing in September 2024, where President Xi Jinping met privately with Benin’s President Patrice Talon and Niger’s General Tchiani to reach an agreement.
The FOCAC summit itself underscored tensions resulting from China’s backing of the Niger junta and those in Burkina Faso and Mali. FOCAC membership is limited to China, AU members in good standing (and who recognize Beijing), and the AU Commission. As the three juntas had been suspended by the AU, they should not have attended the Forum. Yet, China overlooked this longstanding AU norm and warmly received the juntas, including organizing highly publicized visits to NORINCO factories. These moves weakened the AU’s posture of isolating leaders that come to power unconstitutionally.
Relevance to China’s Broader Investment Strategy in the Sahel
China has a stated policy of noninterference in internal affairs, predicated on respecting “sovereign authority” (guoquan; 国权) and “stability maintenance” (weiwen;维稳), which holds that legitimacy derives from uncontested control of state power. Practically, this makes China “regime agnostic,” which is how some African commentators describe China’s preference for working with governments of all shades–authoritarian, military, civilian, democratic–so long as their hold on power is relatively firm.
This strategy also means China is invested in regime stability, a policy that is particularly pronounced in fragile settings like Niger, where it has a major stake in keeping the regime in office. In other words, noninterference is, in fact, a regime-centric rather than citizen-centric strategy. China, in turn, is heavily involved in the domestic affairs of these countries.
When the rule of law is arbitrary, investors are at constant risk.
China has pursued strikingly similar policies in junta-led Burkina Faso, Mali, and Guinea. In 2023, China-EXIM approved a $49-million loan for the cash-strapped regime of Colonel Ibrahim Traoré in Burkina Faso for a solar power plant in Loumbila. In 2024, Mali, also short of cash, secured a deal with Chinese energy giant, Sinohydro, to build a 100-megawatt solar power plant in Safo. China Ganfeng Lithium Company, a major player in China’s electric vehicle (EV) industry, holds a 40-percent stake in Mali’s Goulamina lithium mine, one of the world’s largest lithium projects.
China is increasingly aware of the tests facing its transactional dealmaking in parts of Africa. A report released in May 2025 by the Shanghai Municipal Commission of Commerce warned that political instability in Africa was creating a complex operating environment for Chinese state-owned enterprises (SOEs). It singled out Niger and the widespread security threats in the Sahel, advising firms to “adopt strict neutrality, avoid any political involvement, prohibit employees from discussing politics, or making provocative social media comments.”
This Commission is particularly concerned by these developments, as Shanghai–a major hub for African trade–hosts some of the largest overseas SOEs operational in Africa.
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In June 2025, Foreign Minister Wang Yi hosted a high-level delegation from the Niger junta in Beijing, urging them to handle the disputes with CNPC “properly and through dialogue” and reminding them of Beijing’s expectation that they “ensure the safety and rights of Chinese companies and citizens in Niger.”
International Investment Strategies Impact Security
International investors who support higher standards of governance help create a more stable and attractive investment environment.
A key takeaway is that good governance is a fundamental element of a successful investment strategy. Investments rely on upholding the rule of law, stability, independent courts and means of arbitration, transparency, and predictability. Such environments are more committed to respecting contracts and protecting investors from arbitrary rules and decrees. This recognizes that disputes around major investment projects are not uncommon. What is needed is a reliable means of dispute resolution.
Transactional relationships with governments that lack fidelity to constitutional rules or govern by decree or in a highly personalized style are inherently unstable. When the rule of law is arbitrary, investors are at constant risk. This means that the nature and quality of governance should be key considerations in investment decisions. International investors who support higher standards of governance help create a more stable and attractive investment environment. By doing so, they enhance the safety of their companies and personnel operating in challenging contexts.
Additional Resources
- Paul Nantulya, “What to Expect from Africa-China Relations in 2025,” Spotlight, Africa Center for Strategic Studies, January 7, 2025.
- Initiative for U.S.-China Dialogue on Global Issues, “The Impact of China’s Security Sector Assistance on State Fragility: The Case of Mali,” Seminar, Georgetown University, November 1, 2024.
- Lina Benabdallah, “China’s Conflict Resolution and Mediation Approach in Mali,” Stimson Center, January 6, 2024.
- Paul Nantulya, “China’s Diplomacy in the Horn–Conflict Mediation as Power Politics,” Spotlight, Africa Center for Strategic Studies, October 12, 2022.
- Africa Center for Strategic Studies, “Autocracy and Instability,” Infographic, March 9, 2021.
- Jason Li, “Great Power Mediation: Opportunities and Challenges for China,” Stimson Center, August 27, 2019.
- Julianne Hughes-Jennett, Jeffrey Jowell, N Jansen Calamita, Justine Stefanelli, Anna Bonini, and Julinda Beqiraj, “Risk and Return: Foreign Direct Investment and the Rule of Law,” Hogan Lovells, Bingham Centre for the Rule of Law, and Investment Treaty Forum, 2014.