China has doubled its financial aid and investment pledges to Africa and promised to waive the debt of the continent’s least-developed nations as Beijing seeks to extend its economic and political reach in the region.
President Xi Jinping announced US$60 billion in support on Monday as leaders from more than 50 African countries met in Beijing for the Forum on China-Africa Cooperation. The commitment comes on top of another US$60 billion announced at the summit three years ago.
Xi said the financing would be in the form of government help as well as investment and funding by institutions and companies.
It includes US$15 billion in grants, interest-free loans and concessional loans – three times the amount pledged in 2015. Also promised are US$20 billion in credit lines, a US$10 billion fund for development financing and US$5 billion to finance imports from Africa.
Xi also announced that China would waive the debt of the poorest African countries that have diplomatic ties with Beijing.
China has used previous summits to announce big financing commitments to the continent, but this year’s forum has added weight, given mounting scepticism in the West about Beijing’s global ambitions.
China’s growing presence on the continent – particularly with its massive “Belt and Road Initiative” – has raised concerns that many African nations might struggle to repay the Chinese debt used to build expensive infrastructure projects, allowing China to take control of strategic assets.
But in a staunch defence of his signature belt and road plan, Xi said China was not pursuing “political self-interest” in its investments in Africa.
He said China attached no political strings to its investments in Africa under the initiative; nor did it interfere in the internal affairs of African countries.
“Only the people of China and Africa have the right to comment on whether China-Africa cooperation is doing well,” Xi said. “No one should deny the significant achievement of China-Africa cooperation based on their assumptions and speculation.”
Addressing the summit, Rwandan President and African Union chairman Paul Kagame said a stronger Africa was an opportunity for investment, “rather than a problem or a threat”.
“Africa is not a zero-sum game,” Kagame said. “Our growing relationships with China do not come at anyone’s expense.”
South African President Cyril Ramaphosa said the meeting in Beijing “refutes the view that a new colonialism is taking hold in Africa, as our detractors would have us believe”.
But China and Africa should work towards a more balanced trade relationship, he said.
“It is through platforms like [this forum] that we should work to balance the structure of trade between Africa and China,” Ramaphosa said.
“We’re particularly pleased that President Xi and the government of China is open to this, and in fact encourage trade between Africa and China should be balanced, so that we have a win-win outcome that benefits both.”
Xi said China would increase cooperation with the continent, including expanding imports of products beyond resources.
Chinese companies were also encouraged to make at least US$10 billion in investment in Africa in the next three years, Xi said.
He said China would also boost security help and cooperation with the region.
Africa is growing in strategic importance for China, with the People’s Liberation Army opening its first overseas naval base in Djibouti last year.
Xi said China would set up a China-Africa peace and security fund and continue providing free military aid to the African Union. A total of 50 security help programmes would be implemented, ranging from UN peacekeeping missions to fighting piracy, he said.
Analysts said China’s pledges highlighted Africa’s growing importance to Beijing as its trade war with Washington escalated. It also showed China’s shift in focus from energy and mineral imports from the continent.
Cheng Cheng, a researcher at Chongyang Institute for Financial Studies at Renmin University, said Africa’s growing population and expanding middle class made it a huge market for Chinese exports.
Cheng said potential also existes for more agricultural imports from Africa.
“What China imports the most from Africa is not energy, but a huge amount of agricultural products,” he said. “In West Africa, there has already been state-led efforts to boost soybean production.”
China aims for ‘sustainable’ debt with Africa as Belt and Road Initiative comes under fire from West
China has been Africa’s biggest trading partner for the last nine years, with trade volume growing 14 per cent to US$170 billion last year.
China and Mauritius also wrapped up negotiations on a bilateral free-trade agreement on Sunday, according to the Chinese Ministry of Commerce. Once signed, the deal would be the first of its kind between China and an African country.
Ross Anthony, director of the Centre for Chinese Studies at Stellenbosch University in South Africa, said there was much room for growth – and improvement – in cooperation between China and Africa.
“The seven or so special economic zones set up by Chinese actors in Africa have encountered a number of difficulties ... so there is much scope for growth,” Anthony said.
“Industrialisation is actually very important in terms of fostering sustained economic growth in Africa, and the Chinese side recognises this.
“But thus far, there has not been a systematic and widespread policy addressing this.”
More from South China Morning Post:
- Xi Jinping denies China is spending money on African ‘vanity projects’
- Beijing set to pledge billions more for Africa despite concerns over Chinese lending
- Beijing ups pressure on eSwatini, but Taiwan’s last African ally stands firm
- Taiwanese businesses feel the squeeze in Africa as Beijing extends its reach