Published: Mon, September 03, 2018
Money | By Arnold Ball

China's Xi pledges $60 billion in financing for Africa

China's Xi pledges $60 billion in financing for Africa

He will also be co-chairing the forum on China-Africa Cooperation Summit which started this morning.

However, critics say Xi's project is burying some countries under mountains of debt.

"China's investment in Africa comes with no political strings attached, " Xi said.

"It is through platforms like [this forum] that we should work to balance the structure of trade between Africa and China", Ramaphosa said.

China has denied it is engaged in debt trap diplomacy and Chinese state media have argued that concerns raised in Western media and by politicians are nothing but sour grapes.

"For three years, cooperation between China and Africa has deepened and political mutual trust promoted", said Li Dan.

In Djibouti, the International Monetary Fund has warned that the Horn of Africa country faces a "high risk of debt distress" as its public debt jumped from 50pc of GDP in 2014 to 85pc in 2016.

Xi told African counterparts and business leaders Monday that China's investments on the continent have "no political strings attached", even as Beijing is increasingly criticised over its debt-heavy projects overseas.

"President Buhari and his Chinese host will also witness the signing of the MoU on One Belt One Road Initiative (OBOR)", he added.

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No details were given on specific projects, although Xi said China was planning initiatives in eight areas, including providing $147 million in emergency food aid, sending 500 agricultural experts to Africa, and providing scholarships, vocational training and trade promotion opportunities.

Jeremy Stevens, global economist for the Standard Bank Group, said many felt it would not be "politically appropriate" to pledge huge loans given concern that Africa is becoming overloaded with Chinese debt.

Abiy said China is a reliable friend in the course of Ethiopia's development, and China's precious assistance has always been crucial to his country's economic restructuring and achievements.

President Muhammadu Buhari on Monday participated in the opening ceremony of the 7th Forum on China-Africa Cooperation (FOCAC) in Beijing, China.

Debt from China's interest-free loans, due by the end of 2018, would be written off for some poor African states, Mr Xi said.

A number of bilateral cooperation agreements will also be signed, which will outline a plan for China and Africa cooperation over the next three years and beyond. It has since dipped and past year continued a slow recovery to $170 billion.

"China does not have a very competent worldwide bureaucracy in foreign aid, in expansion of soft power", Anne Stevenson-Yang, co-founder and research director at J. Capital Research, said.

The huge endeavour brings much-needed infrastructure improvements to developing countries, while giving China destinations to unload its industrial overcapacity and facilities to stock up on raw materials.

More than 180 major Chinese enterprises and thousands of small and medium enterprises have been established in the country. "We hope the ICC can prudently handle the relevant issue", Foreign Ministry spokeswoman Hua Chunying told reporters.

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