At the Forum on China-Africa Cooperation, Xi pledges US billion in aid, loans, development support and African exports. Beijing has become the continent’s largest trading partner. Many fear greater debt and the impact of Chinese exports on local industry.
Beijing (AsiaNews) – Financial aid and Chinese investments in Africa have "no political strings attached," and Beijing is not pursuing its “political self-interest”, said Chinese President Xi Jinping yesterday at the Forum on China-Africa Cooperation currently underway in Beijing in the presence of 50 African leaders, dozens of whom personally met with the Chinese leader.
In his address, Xi announced US billion in government aid, investments and financing to governments and firms. The offer includes 15 billion in grants, interest-free loans and concessional loans; 20 billion in credit lines; a US billion fund for development financing; and US billion to finance imports from Africa.
China has been Africa’s biggest trading partner for the last nine years, with trade volume growing 14 per cent to US0 billion last year.
Compared to Western countries, Beijing's investments to African countries come without conditions against corruption, or concerns about the environment and pollution. In return, China accepts raw materials (oil and natural resources) and agricultural products, asking for a guarantee for Chinese imports to African countries.
But not all is positive. Africans area also very critical of Chinese imports, which undermine the continent’s fragile manufacturing sector, as well as the shoddy infrastructures built by Chinese firms.
However, the most serious issue is the rising indebtedness of African countries vis-à-vis China. As the continent’s main creditor, the Asian juggernaut alone holds 14% of sub-Saharan Africa's debt. For the International Monetary Fund, at least six countries in the region are now in a situation of high indebtedness.
The debt problem – due to useless or pharaonic projects pursued by African leaders or the lack of economic reforms – has been aggravated by Beijing’s "Belt and Road" initiative. The latter is part of China’s new “Silk Road”, which also embraces Africa.
Some Asian countries – Malaysia and Pakistan – have put a break on Chinese projects linked to the Belt and Road initiative because they are afraid of seeing an increase in their debt.
At the Beijing Forum, some African countries also called for greater "balance" in trade relations and more investment in African manufacturing.