Unit 4: Development - South Sudan 'agrees $8bn deal with China'

Officials in South Sudan say China has agreed to loan it $8bn (£4.9bn) for major development projects.

A government spokesman said funds would be used to build roads, bridges and telecom networks, and to develop agriculture and hydro-electric power.

However, there was no mention of plans to build a new pipeline to export oil from the newly independent state.

News of the deal emerged after South Sudan's president returned from his first official trip to China.

His visit came amid a flare-up in the dispute between the two Sudans over the oil-rich Heglig border region.

China imports the bulk of oil output from the two countries.

It wants to maintain good relations both with Sudan - a long-time ally - and with the South, which acquired the lion's share of the region's oil production when it seceded in July 2011 after decades of conflict.

Since then, South Sudan's relations with Sudan have been tense - primarily over the division of oil reserves and the full definition of borders.

Both Sudan and the South are reliant on their oil revenues, which account for 98% of South Sudan's budget. But the two countries cannot agree how to divide the oil wealth of the former united state. Some 75% of the oil lies in the South but all the pipelines run north. It is feared that disputes over oil could lead the two neighbours to return to war.

'Beginning from zero'

Main disputes between the two Sudans Transit fees the South should pay Sudan to use its oil pipelinesDemarcating the borderBoth sides claim Abyei regionThe rights of each other's citizens now in a foreign country - there are estimated to be 500,000 southerners in Sudan and 80,000 Sudanese in the South Each accuses the other of supporting rebel groups on its territory

South Sudan Information Minister Barnaba Mariel Benjamin told the BBC's Focus on Africa programme that the Chinese wanted to help develop the country.

"There are no strings attached to it," he said. South Sudan's president called China one of his country's "economic and strategic partners"
"You know we are beginning from zero but we have enormous resources. At least [if] the resources are developed, I'm sure it will be for the benefit of the people of South Sudan, and the region and internationally."

The Chinese funding would be provided over the coming two years, and projects would be conducted by Chinese firms.

In January, South Sudan shut down oil production, which provides 98% of its revenue, after Khartoum impounded South Sudanese oil shipments amid a dispute over transit fees.

It currently relies on pipelines to seaports in Sudan to export the oil. It is proposing a new pipeline that would take oil to an Indian Ocean port rather than north to Sudan.