Finance

Finance

China pledges $10 billion to Africa

09 November 2009 10:19 (UTC +04:00)

Baku â€“ APA-Economics. Wen Jiabao, China’s premier, has pledged $10 billion in new low-cost loans to Africa over the next three years and has defended his country’s engagement on the continent against accusations that it is "plundering" the region’s oil and minerals, the Washington Post reported.

Wen made the pledge Sunday at a China-Africa summit here, at which he also urged the United States to keep its deficit to an "appropriate size" to ensure the "basic stability" of the dollar.

China is the biggest holder of U.S. government debt, and Wen’s comments reinforce similar ones made in March, when he expressed concern that Washington’s deficit could erode the value of China’s U.S. dollar assets.

The loan pledge for Africa was double a $5 billion commitment made in 2006. At the summit, delegates on both sides stressed that their ties go beyond the Chinese acquisition of raw materials.

"There have been allegations for a long time that China has come to Africa to plunder its resources and practice neo-colonialism. This allegation, in my view, is totally untenable," Wen said at a news conference.

Trade between China and Africa jumped 45 percent, to $107 billion, in 2008, a tenfold increase since 2000, and the new loans are likely to sustain the expansion.

But Beijing has attracted Western criticism that Chinese finance, which comes free of political conditions, is propping up unsavory regimes in Zimbabwe and Sudan and fueling corruption.
Wen said eight new Chinese policy measures aimed at strengthening relations with Africa were "more focused on improving people’s livelihoods," underlining what he called Beijing’s "selfless" engagement in Africa.
The International Monetary Fund has expressed concern about African governments taking on too much debt from Chinese lenders. But Wen said China would write off some loans it had made to the poorest and most heavily indebted countries.
African heads of state who spoke at the summit, including Zimbabwe’s Robert Mugabe and Sudan’s Omar Hassan al-Bashir, lauded China’s support.
But several delegates said African nations needed to devise their own development plans to take full advantage of Chinese finance.
"The onus is on us . . . to fully engage at every stage and clearly articulate our development priorities in this partnership," said Rwandan President Paul Kagame.