(November 9, 2009) China’s prime minister said his country will give $10 billion in loans to African countries without any political strings attached.
“We will provide $10 billion in concessional loans to African countries,” Chinese Premier Wen Jiabao said Sunday at the opening ceremony of the two-day Forum on China-Africa Cooperation, or FOCAC, at the Egyptian Red Sea resort of Sharm el-Sheikh.
Mr. Wen, in separate comments, also urged the U.S. to keep its deficit at an appropriate size to maintain basic stability in exchange rates. “I hope that, as the largest economy in the world and an issuing country of major reserve currency, the United States will effectively discharge its responsibilities,” Mr. Wen said. If the U.S. keeps the deficit at an appropriate size, there will be basic stability in the exchange rate, which would be conducive to the stability and recovery of the world economy, the Chinese premier said.
The Africa loan package will include a $1 billion special loan for small and medium-size African businesses, Mr. Wen said, adding that China will also cancel debts of some African countries.
“For the heavily indebted poor countries and least developed countries in Africa having diplomatic relations with China, we will cancel their debts associated with interest-free government loans due to mature by the end of 2009,” Mr. Wen said.
China’s investment in Africa has grown sharply in recent years from a low base, as Beijing catches up with Western companies already established on the African continent.
But critics say Beijing’s no-strings-attached investments and loans undercut political and economic overhaul efforts by Western governments and bodies such as the World Bank.
“China has never attached any political strings to its support and assistance to Africa, and nor will it do so in the future,” Mr. Wen said.
“We will put more emphasis on agriculture, education, health, poverty reduction and clean drinking water.”
On Saturday, Mr. Wen said China will give African goods more access to the Chinese market by gradually removing tariffs for the majority of African countries.
Chinese investment in Africa reached $26 billion by the end of 2008, and trade between China and Africa hit $106.8 billion.
FOCAC, which is held every three years, was first held in Beijing in 2000.
Three years later, the meeting was held in Addis Ababa in Ethiopia, followed by a China-Africa Summit in 2006. At the 2006 meeting, China said it would take measures including canceling debts and lifting tariffs on some goods.
Shereen El Gazzar, The Wall Street Journal, November 9, 2009
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Categories: Aid to Africa, China "Going Out", Foreign Aid, Three Gorges Probe
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