China pledges $10 bil funds, aid to Africa

Monday 09th November, 05:50 AM JST

SHARM EL-SHEIK, Egypt —

China’s premier on Sunday pledged $10 billion in new low interest loans to African nations over three years, offering the beleaguered continent sorely needed cash while dismissing criticism that Beijing’s motives in Africa are far from altruistic.

Wen Jiabao’s promise at the start of a two-day China-Africa summit was warmly received by African leaders and officials, most of whose nations confront a miasma of despair further accentuated by a global financial crisis that is only now showing signs of abating.

“The Chinese people cherish sincere friendship toward the African people, and China’s support to Africa’s development is concrete and real,” Wen said at a forum that attracted leaders such as Sudan’s Omar al-Bashir—who faces an international arrest warrant—and Zimbabwe’s Robert Mugabe. Both are heads of state out-of-favor with the West.

Wen said China wants to help Africa build its financing capacity and would provide $10 billion in concessional loans—ones with generous terms.

As part of an eight-point plan, he said China would also forgive government debts of the poorest African nations that have relations with Beijing and would build 100 new clean energy projects for the continent. It would also gradually institute a zero-tariff policy on 95% of goods from some of the poorest countries. All this would take place over three years.

The latest offer marks a doubling of the $5 billion loan pledge China made in 2006 to African nations—a promise that Beijing and most at the summit said China has upheld. Over the past eight years, trade between China and Africa has surged tenfold to almost $107 billion by the end of 2008, and Wen said despite the financial crisis, Chinese investments in Africa were up 77% in the first three quarters of 2009.

But China’s inroads into Africa have drawn accusations by some in the West that the Asian powerhouse has ignored Africa’s needs and the dismal rights records of some nations while looking only to sap the continent of the resources it needs to fuel its bustling economy. Critics contend that its aid is predicated on these countries renouncing ties with Taiwan—a belief Wen appeared to validate by stipulating that assistance was pegged to having diplomatic relations with China.

But more troubling for some has been Beijing’s willingness to pour money into some countries irrespective of their internal politics.

China has, for example, been a key force in developing Sudan’s vital oil sector even as the Arab-dominated government in Khartoum is accused of atrocities in the Darfur region. More recently, a $7 billion mining deal was signed between a little-known Chinese company and Guinea’s government—an agreement that came weeks after soldiers there opened fire on demonstrators and raped women in the streets.

The Chinese premier said he took issue with claims that “China has come to Africa to plunder its resources and practice neocolonialism.”

“This allegation, in my view, is totally untenable,” Wen told reporters. “Any person who is familiar with China-Africa interaction knows that relations between the two sides did not begin yesterday.”

China has been active in Africa for decades, working on infrastructure projects and supporting African nations in their fight against colonial powers in the early 1950s and 60s. He said that at that time, China did not take a “single drop of oil or a single ton of minerals.”

Wen said China’s imports of African mineral resources and energy account for only 13% of the continent’s total exports and its investments in Africa’s oil and gas sector were only one-sixteenth of the total investments in the continent.

“So, why do some people only criticize China?” Wen asked.

Earlier, the Chinese premier invited others in the international community to step up and do their part to support Africa. The comments appeared to be a subtle nudge at Western nations with a checkered colonial past on the continent.

Zimbabwe’s Mugabe—blamed by many in the West for driving his country’s economy into the ground—praised China’s growth as a model.

“Over the past 60 years, China has achieved phenomenal economic growth and development, purely from its own efforts without having to resort to the colonization and economic plunder of other nations,” Mugabe said. “Its economic miracle is indeed a source of pride and inspiration to all of us.”

Other leaders, like Liberian President Ellen Johnson Sirleaf, expressed frustration with fallout from the global economic crisis that she said has “eroded benefits accumulated over years of reform.”

Egyptian President Hosni Mubarak, the summit’s host, said participants should seize the opportunity to press developed nations, “given their responsibility in the financial and economic crisis,” to live up to their obligations in helping developing nations cope with the fallout.

› Login to comment

12 Comments

yabits at 08:02 AM JST - 9th November

But China’s inroads into Africa have drawn accusations by some in the West that the Asian powerhouse has ignored Africa’s needs and the dismal rights records of some nations while looking only to sap the continent of the resources it needs to fuel its bustling economy.

LOL!!!

This has been the West's "game" for years. Now a real competitor emerges to challenge the West's game.

As part of an eight-point plan, he said China would also forgive government debts of the poorest African nations that have relations with Beijing and would build 100 new clean energy projects for the continent. It would also gradually institute a zero-tariff policy on 95% of goods from some of the poorest countries.

This is a FAR more generous deal than anything ever offered by the West. I take that back. The West has often offered such deals, especially the lowering of tariffs, but never have followed through on them. Can China be trusted to follow through? (I believe the answer is "yes" to the extent that China wants to be perceived as a different kind of partner.)
SuperLib at 08:15 AM JST - 9th November

China....the new Europe.
yabits at 08:40 AM JST - 9th November

China....a clear and certain threat to decades of Western delusions of Western superiority.

Only to the extent that China will corrupt itself along the lines that the West has, can it be said that China is a new Europe.

China has been active in Africa for decades, working on infrastructure projects and supporting African nations in their fight against colonial powers in the early 1950s and 60s. He said that at that time, China did not take a “single drop of oil or a single ton of minerals.”

Well, that is certianly a marked difference from King Leopold's Gold and blood diamonds.
Goodguy at 09:31 AM JST - 9th November

In my view, China's approach to Africa is more of equal footing. China through the past and now has shown the Africans sincerity and respect. On the other hand, the west may have given billions more in aid but looking back at history much more was taken.
ronaldk at 10:33 AM JST - 9th November

Gotta give credit where credit is due. This seems like a step in the right direction, and I only wish my country had made some of these proposals first.
Junnama at 11:08 AM JST - 9th November

Aid never comes without strings attached. The Africans know that already.
skipthesong at 11:37 AM JST - 9th November

say all you want with your comparisons, but until China opens up to a multitude of ethnicities, I say they have a superiority complex in China. They need more non-orientals in China before we start clapping hands are their success.
combinibento at 11:45 AM JST - 9th November

Wow, praise from Mugabe? China must feel grand. And as Junnama said, there are strings attached. China has gotten numerous lucrative contracts our of Africa and will undoubtedly continue doing so with this "aid" package.
SuperLib at 04:45 PM JST - 9th November

Yabits: Only to the extent that China will corrupt itself along the lines that the West has, can it be said that China is a new Europe.

China is the new Europe.
Junnama at 04:57 PM JST - 9th November

Yabits: Only to the extent that China will corrupt itself along the lines that the West has, can it be said that China is a new Europe.

China has a long and glorious history of corruption and abuse.
rajakumar at 05:36 PM JST - 9th November

China and Africa ,get on with USD 10 billion creations. Way to go. Still a long way to go.
sharky1 at 08:13 PM JST - 9th November

So China finally found a way to make some money off their huge stockpile of devaluating US Dollars...