China Pledges $60 Billion at Forum

Chinese President Xi Jinping bowed, rhetorically, to growing criticism of his country’s investment and aid programmes in Africa at the annual Forum on China Africa Cooperation (FOCAC). He promised “five Nos” would govern China’s policies with the continent: no change to development paths, no domestic interference, no imposition of China’s will, no seeking of political gain and no “strings” to financial assistance. Xi said his country had “full respect for Africa’s own will.”

The 2018 event was held in Beijing in early September and attended by all the African countries except eSwatini, the former Swaziland. The heads of state or government of Egypt, Ethiopia, South Africa and Djibouti were among the guests.

Beijing announced a new package of $60 billion in assistance for Africa. A third of it will be lines of credit, $15 billion in grants and concessional loans, and $5 billion to support African imports. The package was broadly the same as one that China had announced the past three summits. However, Beijing abandoned its original promise to at least double its Africa aid package every three years. '

The China-Africa Research Initiative (CARI) at Johns Hopkins University, in its analysis of the summit, said Beijing had reduced its total pledge of interest-bearing loans for Africa by $15 billion from a peak of $35 billion in 2015. Its foreign aid package, largely grants and interest-free loans, had risen to $5 billion, its highest-ever level. It also noted the United States continues to be the largest donor to Africa. It discounted Xi’s promises to write off debts, noting these applied to a few interest-free loans reaching maturity.

Xi strongly defended China’s large-scale infrastructure investments in Africa. He said the railways, roads, ports and so on that China was building in the continent had “targeted the major bottlenecks to development…Resources for our cooperation are not be to be spent on any vanity projects, but in places where they count the most.” The think tank Development Reimagined, founded by an African but Beijing-based, has noted China has begun co-branding FOCAC projects – for example, a Kenyan railway expansion programme – as part of the more geopolitically driven Belt Road Initiative

According to the CARI, the continent received $12 billion in Chinese lending in 2015. It received $ 100 million in 2000. Total trade rose to $170 billion last year, up 14 percent, going by Chinese government figures. But CARI’s figures show Chinese exports dropped sharply between 2014-15, falling from $150 billion to $88 billion, largely in the machinery sector.

Renmin University’s Professor Shi Yinhong was quoted as saying Xi sought to emphasize inclusiveness and making more projects in Africa viable. “China’s economy is facing new difficulties, China is accumulating lessons in Africa and absorbing some external criticism,” he explained.

 

September 25, 2018

E-mail me when people leave their comments –

You need to be a member of Ananta Centre to add comments!

Join Ananta Centre

About the Author

Pramit Pal Chaudhury

Pramit Pal Chaudhuri, Foreign Editor, Hindustan Times, and Distinguished Fellow & Head, Strategic Affairs, Ananta Aspen Centre

Pramit Pal Chaudhuri writes on political, security, and economic issues. He previously wrote for the Statesman and the Telegraph in Calcutta. He served on the National Security Advisory Board of the Indian government from 2011-2015. Among other affiliations, he is a member of the Asia Society Global Council, the Aspen Institute Italia, the International Institute of Strategic Studies, and the Mont Pelerin Society. Pramit is also a senior associate of Rhodium Group, New York City, advisor to the Bower Group Asia in India, a member of the Council on Emerging Markets, Washington, DC, and a delegate for the Confederation of Indian Industry-Aspen Strategy Group Indo-U.S. Strategic Dialogue and the Ananta Aspen Strategic Dialogues with Japan, China and Israel. Born in 1964, he has visited over fifty countries on five continents. Mr. Pal Chaudhuri is a history graduate from Cornell University.