China pledges $10 billion in loans to Africa

By Li Xiaokun (China Daily)
Updated: 2009-11-09 07:48

SHARM EL-SHEIKH, Egypt: Premier Wen Jiabao announced Sunday that Beijing would double the initial commitment of loans to African nations and phase out most tariffs to expedite trade with the continent's poorer countries.

China pledges $10 billion in loans to Africa

Premier Wen Jiabao greets the Fourth Ministerial Conference of the China-Africa Cooperation Forum before announcing China's commitment of $10 billion to African countries on Saturday. Egyptian Prime Minister Ahmed Nazif looks on at the summit, held in his nation's resort city of Sharm el-Sheikh. [Reuters]

The infusion of $10 billion in loans over a span of three years - President Hu Jintao said the nation would commit half that amount in 2006 - is China's aim to boost a relationship that is now economically booming.

It also comes amid discomfort in the West. Critics say the aid may drive African countries deeper into debt. They have said that China is only interested in Africa's natural resources to help feed its economy.

"China's support for Africa's development is real and solid," Wen said at the China-Africa Cooperation Forum in the Egyptian resort of Sharm el-Sheikh. "In the future, no matter what turbulence the world undergoes, our friendship with the people of Africa will not change."

"Chinese investment in oil and gas in Africa is just one-sixteenth of its total investment here. Why are there always accusations against China? Is it the opinion of African people or the West?" Wen said at a press conference late last night.

He said that China will also phase in a measure to remove all tariffs on 95 percent of products from least-developed African countries with which it has diplomatic ties. He said the initial plan is to lift tariffs on 60 percent of products next year.

In addition to the financial aid and tariff plan, Wen said China would help in areas ranging from trade, fighting climate change, improving agriculture and education. The nation would also offer help to develop clean energy.

He encouraged Chinese financial institutions to lend to smaller African firms and expand market access for African products.

"Africa's development is an essential part of achieving global development, and as the sincere and dependable friend of Africa, China deeply feels the difficulties and challenges faced by Africa," Wen said.

China's friendship with Africa dates to the 1950s, when Beijing backed liberation movements on the continent to battle colonial rule.

Trade has risen sharply in the past decade. But blossoming trade and business ties have attracted Western criticism that Beijing's stake in Africa is an example of "neo-colonialism".

China and Africa have become "all-weather friends", said Shu Yunguo, an Africa studies expert at Shanghai Normal University.

"The forum has not only challenged the rule of big countries dominating smaller ones. It has also been helpful in changing unreasonable international economic relations," Shu said.

On why some Westerners are uncomfortable with Beijing's rising role in Africa, Xu Weizhong of the China Institutes of Contemporary International Relations said: "Europeans view Africa as their own backyard."

African leaders welcomed Beijing's offer of aid.

"We are able to take the necessary measures to be able to benefit from the opportunities created by our partnership with China in a manner that is consistent with our principles of solidarity," Ethiopian Prime Minister Meles Zenawi said.

"The Sharm El-Sheikh cooperation plan is correct, for it has brought hope to us and may bring vitality to Central Africa," said Central African Republic President Francois Bozize.

Reuters contributed to the story