China Gives Africa USD 10 Billion

China promised $10 billion in cheap loans to Africa, pledged to cut customs duties and distributed a newspaper with photos of Chinese leaders among beaming Africans, part of an effort to fight claims it is exploiting the continent’s resources.

Photo: China Gives Africa USD 10 Billion

China Gives Africa USD 10 Billion

At the close today of the two-day Forum on China-Africa Cooperation conference in Sharm el-Sheikh, Egypt, China pledged to "work within its means to increase aid to Africa, reduce or cancel debts on African countries, in addition to increasing investments in Africa and open more markets," Egypt’s state-run Middle East News Agency reported.

Chinese officials have been battling accusations that they are only interested in the continent’s oil and minerals as their country presses forward with a decade-long drive to invest in African resources to feed its growing economy. Last year, European Union lawmakers assailed China for courting "oppressive" African governments, such as Sudan, to satisfy its soaring demand for oil and raw materials, reports Bloomberg.

Chinese Prime Minister Wen JiaBao has a big chequebook. Over three years, he is pledging $10bn (£5.9bn) in new loans, 100 new clean energy power stations. And there are the opportunities arising from the difficulties the emerging world has in financing these infrastructure projects, especially as foreign banks retreat to home markets.

At the same time, China is keen to invest billions of dollars of its foreign reserves. A lot of that money is tied at the moment to assets in the United States and to the weak dollar. Investment in new African projects offers a useful alternative.

There is criticism however that China's full-throttle rush into Africa has done nothing to stop corruption and bad governance. And it is criticised for its willingness to deal with brutal and corrupt governments, BBC News informs.

According to a recent white paper by the Rockefeller Foundation, only 15 of Africa's 53 countries run a trade surplus with China.

"The real challenge is that trade is lopsided and the expansion has mainly benefited a handful of states, mostly the resource-rich ones, and the challenge now is to spread it a bit further," said Adrian Davis, the China head of Britain's Department for International Development.

Egyptian Investment Minister Mahmoud Mohieldin said he was concerned about the trade imbalance with China, adding that Egypt imports from China 11 times the amount it exports, Reuters informs.