Another US$ 60 billion Financial Package for Africa, Pledged by China

IndraStra Global

Another US$ 60 billion Financial Package for Africa, Pledged by China

By IndraStra Global News Team

Image Attribute: President Xi Jinping speaks at a high-level dialogue between Chinese and African leaders and business representatives at the National Convention Center in Beijing, Sept 3, 2018. Source: Photo by Zou Hong/chinadaily.com.cn

Image Attribute: President Xi Jinping speaks at a high-level dialogue between Chinese and African leaders and business representatives at the National Convention Center in Beijing, Sept 3, 2018. Source: Photo by Zou Hong/chinadaily.com.cn

On September 3, 2018, the Chinese President Xi Jinping unveiled a US$ 60 billion financial package for the African nations during the Forum on China-Africa Cooperation (FOCAC) in Beijing, a triennial meeting between senior Chinese leaders and their counterparts from across Africa — with the exception of Swaziland, the last African state with which the People's Republic of China (PRC) currently does not have diplomatic relations, since it recognizes Taiwan. 

But critics warn that the Chinese leader's pet project "Belt and Road Initiative" is burying some countries under massive debt. However, Beijing has refuted claims of using "Debt Trap" diplomacy to gain influence in African markets and secure privileged access to resources in the continent.

Currently, the Chinese assistance towards Africa includes grants, interest-free loans, concessional low-interest loans, cancellation of loans, professional training (agricultural and medical experts), construction projects (convention centers, railways, roads, hospitals, etc.), zero-tariff export agreements, clean energy projects and facilities, teacher training, medical equipment and anti-malaria materials, cultural exchange programs, and much more. 

"China's investment in Africa comes with no political strings attached," Xi told a high-level dialogue with African leaders and business representatives hours before the FOCAC. Xi also announced the writing off of interest-free loans to indebted poor African countries.

"China-Africa cooperation must give Chinese and African people tangible benefits and successes that can be seen, that can be felt," Xi said while adding that Beijing will initiate 50 projects on green development and environmental protection in Africa. The China-Africa cooperation under the initiative targets inadequate infrastructure and other key constraints on Africa's development, "with funds to be used where they count most," Xi said.

The newly-announced financial package is of the same amount Beijing pledged at the previous FOCAC summit in 2015 which will involve hundreds of projects, most of them built by Chinese contractors and financed by loans from Chinese state-owned banks, across an arc of 65 countries from the South Pacific through Asia to Africa and the Middle East — helping to fuel China's transformation into an economic powerhouse.

"Unilateralism and protectionism are on the rise. Economic growth lacks robust drive," said Mr. Xi in a speech. "China-Africa cooperation under the BRI is a way to common prosperity that brings benefits to both our peoples."

As of now, the African reaction has been more mixed. African leaders have welcomed what they see as a new approach to development and increased potential for meaningful "South-South co-operation". However, China’s financial packages to Africa is at times criticized for supposedly supporting pariah regimes, whereby China is accused of disregarding human rights abuses, fiscal transparency, and clean governance. But China feels that the current norms of international relations limit China to having to deal with sovereign states through their government — and tries to comply with the current international norms and the spirit of the United Nations (UN) Charter. 

With reporting by CGTN, China Daily, CNN, Reuters, and Xinhua