China Offers Africa Billions in New Loans

by
July 20, 2012

By WAYNE MA, The Wall Street Journal

BEIJING—China pledged billions of dollars in new aid to Africa and said Chinese companies doing business there would act responsibly, as the country seeks smooth relations with the resource-rich continent despite emerging trade and social tensions.

China will offer $20 billion in loans to African countries to develop infrastructure, agriculture, manufacturing and small and midsize enterprises, Chinese President Hu Jintao said Thursday during a gathering of African leaders in Beijing. That figure is double what China committed in 2009.

Chinese officials also stressed deepening economic ties with Africa, a major source of China’s oil, metals and other commodities. Mr. Hu said trade between China and Africa doubled in the past six years and totaled $166.3 billion in 2011, while its direct investment there has reached $15 billion.

But South Africa President Jacob Zuma said China’s trade with African nations should be better balanced. While Africa ships large volumes of raw materials to China, China’s exports often include manufactured goods such as machinery and textiles.

“Africa’s commitment to China’s development has been demonstrated by the supply of raw materials, other products and technology transfer,” Mr. Zuma said, addressing Mr. Hu at the gathering following the aid pledge. “As we all agree, your excellency, this trade pattern is unsustainable in the long term.”

China pledged that its companies could help address the imbalance. “Chinese companies have expressed their willingness to undertake social responsibility,” said Yu Ping, vice president of the China Council for Promotion of International Trade, at a news conference. He said that effort would include answering African calls for help in upgrading local industries so countries can export finished products, as well as having China pay greater attention to the environment.

In recent years, China has moved aggressively into Africa. Unlike the U.S. and other countries, China hasn’t attached political or environmental strings to much of its aid.

To read more, visit: http://online.wsj.com/article/SB10000872396390444464304577536140647257710.html

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