Beijing is pledging to extend new funding of $60 billion to Africa, aimed at areas from industrial enhancement to infrastructure. China also says it will wipe clean the debt for certain African countries when interest-free loans come due later this year.
President Xi Jinping made the pledge Monday during the opening ceremony of the triennial Forum on China Africa Cooperation in Beijing.
He did not say which countries would have their debt absolved, but the move appeared to be the latest effort by Beijing to deflect concerns about debt levels on the continent and the risks of “debt trap diplomacy.”
Speaking to leaders from more than 30 African countries at Beijing’s Great Hall of the People, Xi said China’s investment and engagement on the continent would continue, with no political strings attached to Beijing’s investments in Africa.
“China-Africa cooperation must give Chinese and African people tangible benefits and successes that can be seen, that can be felt,” Xi said.
China has denied it is engaged in debt trap diplomacy and Chinese state media have argued that concerns raised in Western media and by politicians are nothing but sour grapes.
According to data from John Hopkins University’s China Africa Research Initiative, China has already loaned around $125 billion to the continent between 2000 and 2016. That has led to high debt risks in countries like Djibouti — where China recently opened its first overseas military base — and Zambia.
Xi did not say which countries China would extend debt relief to, but he noted they would be Africa’s least developed, heavily indebted and poor as well as small island developing countries that have diplomatic relations with China.
Xi said during the next three years and beyond, China would carry out eight major initiatives with African countries. The initiatives include infrastructure connectivity, green development, and health care, as well as peace and security.
Xi said China would set up a China-Africa peace and security fund and that a total of 50 “security assistance” programs will be carried out, such as U.N. peacekeeping missions, fighting piracy and combating terrorism.
Breaking down the $60 billion China pledged to extend, Xi said $15 billion of those funds would be for aid, interest free and concessional loans, $20 billion would be set aside for as a new credit line, $10 billion for China-Africa development and five billion for imports.
South Africa’s President Cyril Ramaphosa spoke after Xi at the opening ceremony and said the Forum on China Africa Cooperation should work to balance the structure of trade between the continent and China.
When FOCAC last met in 2015, African leaders and those in China set a goal to double trade to $400 billion by 2020. Trade between Africa and China in 2014 was at $220 billion. It has since dipped and last year continued a slow recovery to $170 billion.
Ramaphosa urged China to focus more on the nature of and quality of its investments in Africa and not just natural resources. He said Xi has expressed his commitment to addressing the issue.
“Much of what is exported from Africa is raw materials and primary product. Much of what is imported from China is finished goods,” he said. “We are exporting to China what we extract from the earth. China exports to us what it makes in its factories.”
He said that limits the ability of African countries to get the full value out of their natural resources and create work for their people.