Fin24

China bolsters Africa ties with $20bn loans

2012-07-19 08:23

Beijing - Chinese President Hu Jintao on Thursday offered $20bn in loans to African countries over the next three years, boosting a relationship that has been criticised by the West and given Beijing growing access to the resource-rich continent.

The loans offered were double the amount China pledged for the previous three-year period in 2009 and is the latest in a string of aid and credit provided to Africa's many poverty-stricken nations.

The pledge is likely to boost China's good relations with Africa, a supplier of oil and raw materials like copper and uranium to the world's most populous country and second-largest economy.

But the loans could add to discomfort in the West, which criticises China for overlooking human rights abuses in its business dealings with Africa, especially in Beijing's desire to feed its booming resource-hungry economy.

Hu brushed off such concerns in his speech at the Great Hall of the People, attended by leaders including South African President Jacob Zuma and Equatorial Guinea's Teodoro Obiang Nguema, a man widely condemned by rights groups as one of the world's most corrupt leaders.

"China wholeheartedly and sincerely supports African countries to choose their own development path, and will wholeheartedly and sincerely support them to raise their development ability," Hu said.

China will "continue to steadfastly stand together with the African people, and will forever be a good friend, a good partner and a good brother", he added at the summit held every three years since 2000.

Hu also pledged to "continue to expand aid to Africa, so that the benefits of development can be realised by the African people". He did not provide an amount.

Hu said the new loans would support infrastructure, agriculture, manufacturing and development of small and medium-sized businesses in Africa.

"Cheque book" approach

Critics say China supports African governments with dubious human rights records as a means to get access to resources.

The EU has rejected what they call China's "cheque book" approach to doing business with Africa, saying it would continue to demand good governance and the transparent use of funds from its trading partners.

Such criticism draws rebukes from China that the West still views Africa as though it were a colony. Many African countries say they appreciate China's no-strings approach to aid.

"Africa's past economic experience with Europe dictates a need to be cautious when entering into partnerships with other countries," Zuma told the forum.

"We are particularly pleased that in our relationship with China we are equals and that agreements entered into are for mutual gain," Zuma added.

"We certainly are convinced that China's intention is different to that of Europe, which to date continues to intend to influence African countries for their sole benefit."

China's friendship with Africa dates back to the 1950s, when Beijing backed liberation movements in the continent fighting to throw off Western colonial rule.

Growing trade links

Chinese state-owned firms in Africa also face criticism for using imported labour to build government-financed projects like roads and hospitals, while pumping out raw resources and processing them in China, leaving little for local economies.

"Certainly quite a number of us are thinking we need to move into more value addition," South African's Trade and Industry Minister Rob Davies told Reuters.

"We need to export mineral products in a more processed form ... We need to bite this bullet very seriously."

Trade has jumped in the past decade, driven by Chinese hunger for resources to power its economic boom and African demand for cheap Chinese products.

China's trade with Africa reached $166.3bn in 2011, according to Chinese statistics. In the past decade, African exports to China rose to $93.2bn from $5.6bn.

Industrial and Commercial Bank of China, for example, the world's most valuable lender, has invested more than $7bn in various projects across the continent.

Comments
  • william.letsong.5 - 2012-07-19 09:22

    \Equatorial Guinea's Teodoro Obiang Nguema, a man widely condemned by rights groups as one of the world's most corrupt leaders\ Yeah rite, let's pretend Jacob Zuma is a righteous man of God.

  • press.enter.12 - 2012-07-19 10:21

    Soon they will own Africa . .

      oomkrummel.krummel - 2012-07-19 12:52

      OOOOOO so blind...so blind..what a sell-out..! These Chinese are not greedy, they also not stupid. We are just GIVING them the country, giving them the chance to just do whatever they like with our continent. At the ANC 100 year meeting, it was mentioned that the wealth of SA should stay in SA...Well do I have news for you, If the Chinese pull in here, we will have NONE of that wealth. You will be crying for the old colonial/Europeans back. When last have you looked around our country..?? Every town, every Dorp has a Chinese shop..and who do they employ..???..NOBODY..!! Come on guys, please stop them from taking over our shops, our towns, our city’s and our dorps. Don’t be blinded by their money and promises..

  • mondli.mabaso - 2012-07-19 11:56

    Somethings gotta give. We are poor. One way or the other we need to eat. But i think we are a long way from negotiating on equal footing where there is mutual benefits. Chinese loans are an investment - they will reap rewards.

  • ivan.frantz.3 - 2012-07-19 11:59

    The Chinese pumping so much money into Africa but we see no relative economic or social improvement in any of the african states. How is all of this money managed ? and who really manage this money ??

  • jason.ugolini - 2012-07-19 14:05

    The fact is it's still considered foreign direct investment which is what Africa needs the most. Did the west ever provide this for Africa??? If the United states were doing this would everyone be saying Americans are trying to take over the continent?? The fact is China pumps Billions of FDI into countries like Australia, that's why they are one of the few developed markets not in a mess. It would be stupid to reject Chinese investment in Africa. I'm sure those other African governments have their policies and written agreements in place. As a leader of an African country I don't think they would be dumb enough to sign rights away. Look further than the western media people!

  • anku.liao.5 - 2012-07-19 14:52

    Asian Invasion

  • NicBob - 2012-07-23 08:21

    They're buying our natural resources and selling them back once they are processed. They are offering loans because they know that when the continent finally collapses, they can take what they want for cheap. That's my opinion. Maybe they'll do a better job running the place at least!

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