China will extend a total of 60 billion U.S. dollars of financing to Africa, Chinese President Xi Jinping has said but quickly added that the funds provided by the country are not for “vanity projects” in Africa. He said that the funds are to build infrastructure that can remove development bottlenecks. The package includes $20 billion of credit lines; $15 billion of grants, interest-free loans and concessional loans; $10 billion for a special fund; and $5 billion to support imports from Africa.
“We will fully honour the promises we have made to our African brothers,” Xi told the gathering. African presidents in attendance include Nigeria’s Muhammadu Buharu, South Africa’s Cyril Ramaphosa, Egypt’s Abdel Fattah al-Sisi, Zambia’s Edgar Lungu and Gabon’s Ali Bongo, Ethiopian Prime Minister Abiy Ahmed, Djibouti President Ismail Omar Guelleh. In recent months, Beijing has faced criticism about its debt practices from countries ranging from Australia to India, with even some Chinese academics airing doubts at home. Malaysian Prime Minister Mahathir Mohamad warned against “anew version of colonialism during a visit to Beijing last month after suspending a $20 billion Chinese-built rail project.
Shi Yinhong, a professor of international relations at Renmin University of China, said Xi emphasized both inclusiveness and a desire to ensure projects are viable. “The reason behind these changes is that China’s economy is facing new difficulties, China’s accumulating lessons in Africa and absorbing some external criticism,” Shi said. The President also warned Chinese firms to respect local people and the environment where projects were being executed. Xi said at a business forum before the start of a triennial China Africa summit their friendship was time-honoured and that China’s investment in Africa came with no political strings attached. “China does not interfere in Africa’s internal affairs and does not impose its own will on Africa. What we value is the sharing of development experience and the support we can offer to Africa’s national rejuvenation and prosperity,” Xi said. China’s cooperation with Africa is clearly targeted at the major bottlenecks to development. Resources for our cooperation are not to be spent on any vanity projects but in places where they count the most,” he said. China has denied engaging in “debt trap” diplomacy but Xi is likely to use the gathering of African leaders to offer a new round of financing, following a pledge of $60 billion at the previous summit in South Africa three years ago.
Chinese officials have vowed to be more cautious to ensure projects are sustainable. China defends continued lending to Africa on the grounds that the continent still needs debt-funded infrastructure development. The financing will be provided in the form of government assistance as well as investment and financing by financial institutions and companies, Xi said in a keynote speech at the opening ceremony of the 2018 Beijing Summit of the Forum on China-Africa Cooperation. He also said that China will exempt certain African countries from outstanding debts incurred in the form of interest-free Chinese government loans due by the end of 2018. The exemption, he said, will be granted to Africa’s least developed countries, heavily indebted and poor countries, landlocked and small island developing countries that have diplomatic relations with China. Xi also said China will implement eight major initiatives with African countries in the next three years and beyond. He said the initiatives, cover fields such as industrial promotion, infrastructure connectivity, trade facilitation, and green development.
Beijing has also fended off criticism it is only interested in resource extraction to feed its own booming economy, that the projects it funds have poor environmental safeguards, and that too many of the workers for them are flown in from China rather than using African labour. Xi told business leaders Chinese firms in Africa had to be aware of their social responsibilities and make sure their investments served the community and improved their wellbeing. “I hope that our entrepreneurs will act to fulfil social responsibilities and respect local culture and tradition,” he said.
“I also hope you will do more in staff training and bettering lives for the local people and will put more emphasis on the environment and resources,” Xi said.
Chinese officials say this year’s summit will strengthen Africa’s role in Xi’s Belt and Road initiative to link China by sea and land with Southeast and Central Asia, the Middle East, Europe and Africa through an infrastructure network modelled on the old Silk Road. Xi said the plan, for which Beijing has pledged $126 billion, would help provide more resources and facilities for Africa and would expand shared markets. China loaned around 125 billion dollars to the continent from 2000 to 2016, data from the China-Africa Research Initiative at Washington’s Johns Hopkins University School of Advanced International Studies shows.. Every African country is represented at the business forum apart from eSwatini, self-ruled Taiwan’s last African ally that has so far rejected China’s overtures to ditch Taipei and recognise Beijing.
