SUMMIT: China’s funding is helping Africa to develop, not stack up debt –Official
China is helping Africa develop, not pile up debt, a top Chinese official said on Tuesday, as the government pushes back against criticism it is loading the continent with an unsustainable burden during a major summit in Beijing.
President Xi Jinping pledged 60 billion dollars to African nations at Monday’s opening of a China-Africa forum on cooperation, matching the size of funds offered at the last summit in Johannesburg in 2015.
A wave of African nations seeking to restructure their debt with China has served as a reality check for Beijing’s ties with the continent, though most of its countries still see Chinese lending as the best bet to develop their economies.
“If we take a closer look at these African countries that are heavily in debt, China is not their main creditor,” its special envoy for Africa, Xu Jinghu, told a news conference.
“It’s senseless and baseless to shift the blame onto China for debt problems.”
She said, as it pushes forward with Xi’s pledge, China will use feasibility studies to select projects that help African countries achieve sustainable development and steer clear of debt or financial woes.
“We need to take into account the fluctuations of the international economic situation, which has raised the cost of financing for these African countries.
“Most of them depend on exporting raw materials, the price of which, on the international market, has been falling,” said Xu, adding that the overall debt burden had built up over a long time.
China has denied engaging in “debt trap” diplomacy, and Xi also said government debt from Chinese interest-free loans due by the end of 2018 would be written off for the poorest African nations.
Claims that China was an “economic predator” in Africa, pillaging natural resources and dragging it into a debt crisis, were “as false as they are sensational,” the Xinhua official news agency said in a commentary.
“Chinese loans to Africa have a lower interest rate and longer repayment period compared to the market average, and these concessional loans are primarily used to build infrastructure,” it added.
The total value of Xi’s pledge this year matches that of 2015, but it is comprised of a smaller portion of loans and more concessionary assistance than before, said Deborah Brautigam, an expert on China-Africa relations at the Johns Hopkins School of Advanced International Studies in Washington.
“(China’s) debt relief polices have not changed,” she said in a note, adding that the write-off covered a modest part of Chinese finance in Africa.
The summit, held as the United States seeks to constrain China, and vilify it as the new colonizer of Africa, shows the Asian nation will rely more on trade with the continent, former deputy commerce minister Wei Jianguo wrote on Tuesday for the China Going Global Thinktank.
“I hope that in the next five years China-Africa economic and trade cooperation will overtake China-U.S. trade,” he said.
“This is totally achievable.”
China and the United States are embroiled in an increasingly bitter trade war.
Separately, Xinhua said China and Mauritius had completed talks on a free-trade pact, which would make the island nation the first African country to strike such a deal with Beijing.