China makes moves to reopen economic ties with Libya, 13 years after suspending trade
Then, as the security situation worsened, China suspended new investments, something which has remained relatively unchanged – until now.
Currently Libya is split between two administrations: the internationally recognised Government of National Unity (GNU) based in Tripoli in the west of the country, and the rival Government of National Stability (GNS) which is aligned with renegade general Khalifa Hifter of the Libyan National Army in Benghazi in the east.
Recently, signs have begun to emerge that China is ready to return to the energy-rich, yet still politically divided, country.
On June 10, Libyan Minister of Economy and Trade Mohamed al Hwej issued a directive to activate the Libyan-Chinese Joint Economic Chamber. The minister urged the chamber to help build bridges and enhance investment communication between the two countries.
“It is hoped that Libya will provide a fair and non-discriminatory business environment for Chinese companies,” Li said.
Meanwhile, Wang also offered China’s backing.
“China always supported Libya’s stabilisation and development … and the Libyan-led and Libyan-owned political transition process,” he said.
In return, Dbeibah said at the meeting: “Libya highly appreciates China’s important role in supporting Libya’s political process and national reconstruction.”
The meetings also discussed the start of processes for the Chinese embassy to resume operations in the capital, Tripoli, according to Libyan media.
But according David Shinn, a China-Africa specialist and professor at George Washington University’s Elliott School of International Affairs, continued political instability in Libya could still prove to be a fly in the ointment.
“China supports a unified Libya and encourages dialogue as a solution to their differences,” Shinn said.
He said that Libya exported US$36 billion worth of oil in 2023 and China accounted for US$2.2 billion of this total. China would like to re-engage in winning infrastructure contracts, he added, while the GNU would like to see the return of Chinese companies.
“Political instability remains a concern, however, and it is not clear how China would interact with the Khalifa Haftar regime in eastern Libya,” Shinn said. “Any major re-engagement in the country would require a reopening of China’s embassy in Tripoli.”
John Calabrese, a senior fellow at the Middle East Institute in Washington, said before the Libyan civil war, all three Chinese state-owned energy giants – China National Petroleum Corporation, China National Offshore Oil Corporation and China Petroleum & Chemical Corporation – had projects in Libya. He said the recent developments might have something to do with those companies wanting to recover losses, re-establish themselves and resume potentially lucrative work.
If China does not help with reconstruction, who will? Arguably, the Europeans should. As far as I can tell, Washington has tended to hand over this poisoned chalice to them.
“Somehow, they have managed to avoid permanently alienating either of the two rival camps,” Calabrese said.
Mohammed Soliman, a global strategy adviser at McLarty Associates, said the reopening of the Chinese embassy could signal strengthened diplomatic ties and further validate the political structure in Tripoli.
“Chinese companies have a proven track record in executing large-scale projects swiftly and efficiently, which is essential for Libya’s reconstruction,” Soliman said, adding that China’s involvement in Libya’s reconstruction aligns with Beijing’s broader interests in the Mediterranean and North Africa.
“Furthermore, by playing a role in Libya’s recovery, China positions itself as a key global player committed to international development and stability.”
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Amjed Rasheed, a lecturer of defence studies at King’s College London, said Libya is in dire need of reconstruction as part of its transition to a post-conflict country.
“The idea here is that reconstruction leads to normalcy and ends the circle of political violence. This is important for the Government of National Unity to score credit and strengthen the legitimacy of [Dbeibah’s] UN-backed government vis-à-vis his political rivals in Tobruk and eastern Libya,” Rasheed said.
He said Libya is yet another partner with the Belt and Road Initiative to secure and enhance energy security.
“Libya can play a key role, along with Egypt and Algeria, in completing the picture in Mediterranean Africa to ensure access to the European single market,” Rasheed said. At the same time, he said, as with any post-conflict society, Libya provides a lucrative opportunity for Chinese companies.
Since that tense evacuation of its citizens in 2011, China has maintained its neutrality in the Libyan conflict, biding its time for an eventual return of Chinese-owned businesses to the country, according to Shaio Zerba, director of the Centre for Intelligence and Security Studies at the University of Mississippi.
She said Libya needs foreign investors to rebuild its capacity to tap into its vast oil reserves.
“Engaging in economic cooperation and infrastructure projects with Libya advances two Chinese goals – achieving energy security and increasing China’s influence in Africa.”