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China Announces $20 Billion in Africa Loans

  • Shannon Sant

China's President Hu Jintao (R) shakes hand with Benin's President Thomas Yayi Boni before a group photo session during the opening ceremony for the Fifth Forum on China-Africa Cooperation at the Great Hall of the People in Beijing, July 19, 2012.

China's President Hu Jintao (R) shakes hand with Benin's President Thomas Yayi Boni before a group photo session during the opening ceremony for the Fifth Forum on China-Africa Cooperation at the Great Hall of the People in Beijing, July 19, 2012.

BEIJING — China has announced $20 billion in loans to Africa over the next three years. The package was announced during the Forum on China-Africa Cooperation in Beijing.

This is the fifth China-Africa forum held in Beijing, and leaders from many African countries, including South African president Jacob Zuma, traveled to China to attend. During a speech at the opening ceremony Chinese President Hu Jintao announced $20 billion in new loans to the continent.

This loan package is twice the amount of China’s last pledge of aid to Africa in 2009.

“China's assistance to Africa has been growing steadily,” he said. “[China] has met the pledge of providing 15 billion U.S. dollars of lending of a preferential nature to Africa,” said Hu.

Loans for African resources

Hu said the loans would go to infrastructure, agriculture and manufacturing projects, as well as the development of small and medium-sized businesses throughout the continent.

China aims to improve its ties to African countries on which it relies for oil, copper and other commodities that fuel China’s booming economy. Chinese government statistics report trade with Africa grew to about $166 billion in 2011. African exports to China have risen to $93 billion from slightly more than $5 billion in the last 10 years.

Chinese investment in Africa also is growing rapidly. But Beijing’s involvement has been criticized for resource-extraction projects accused of being exploitative, and for striking deals without adequate concern for human rights. Critics argue that Chinese investors should demand transparency and good governance before granting aid and financing development projects.


Mending past rifts

Africans also have protested against Chinese companies importing Chinese laborers to Africa and for business practices that they say do not lead to better jobs or local wages.

At Thursday’s forum Chinese officials highlighted what they call people-to-people and cultural exchanges as a driving factor in improving relations with African leaders.

Zhong Weiyun is Deputy Director-general of the Bureau of African Affairs of International Department, who spoke about how China’s policies in Zambia came under harsh criticism during the country’s election last year.

Reinforcing mutually beneficial ties

He said meetings between the Communist Party officials and Zambia’s new leadership have helped to ease tensions and pave the way for new Chinese investment in the country.

Zhong said they were successful in dismantling those understandings between the two political parties, which paved the way and created conditions for the relationship to return to normal between the two countries.

Analysts say the current global economic slowdown has made African countries more reliant on Chinese investment. In his speech Thursday, Hu said Chinese aid to Africa would continue to grow in the years ahead and promised that China would remain a friend to the continent.

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