x

Abu Dhabi, UAETuesday 20 November 2018

China's Xi assures African leaders Belt and Road is no 'debt trap'

China's investment in Africa comes with 'no political strings attached', Chinese leader tells African delegates at summit in Beijing
African delegates walk by a screen showing a footage of Xi Jinping with Ethiopia's Prime Minister. AP

President Xi Jinping told African counterparts and business leaders on Monday that China's investments on the continent have "no political strings attached", even as Beijing is increasingly criticised over its debt-heavy projects abroad.

Mr Xi spoke before the start of a two-day China-Africa summit that is expected to focus on his cherished Belt and Road initiative, a global trade infrastructure programme.

The scheme is aimed at improving Chinese access to foreign markets and resources, and boosting Beijing's influence abroad.

It has already seen China lend billions of dollars to countries in Asia and Africa for roads, railways, ports and other major infrastructure projects.

But critics warn that the Chinese leader's project is burying some countries under enormous debt.

"China does not interfere in Africa's internal affairs and does not impose its own will on Africa," Mr Xi told a high-level dialogue with African leaders and business representatives hours before the Forum on China-Africa Co-operation (Focac).

"China's co-operation with Africa is clearly targeted at the major bottlenecks to development. Resources for our co-operation are not to be spent on any vanity projects, but in places where they count the most."

But Mr Xi admitted there was a need to look at the commercial viability of projects and make sure preparations are made to lower investment risks and make co-operation "more sustainable".

Belt and Road, he said, "is not a scheme to form an exclusive club or bloc against others. Rather it is about greater openness, sharing and mutual benefit."

A study by the Centre for Global Development, a US think tank, found "serious concerns" about the sustainability of sovereign debt in eight Asian, European and African countries receiving Belt and Road funds.

Rwandan President Paul Kagame, the chairman of the African Union, dismissed such concerns, saying talk of "debt traps" is an attempt to discourage African-Chinese interactions.

"Another perspective ... is that those criticising China on debt give too little," Mr Kagame said in an interview with the official Xinhua news agency.

At the last three-yearly gathering in Johannesburg in 2015, Mr Xi announced $60 billion (Dh220.4bn) of assistance and loans for Africa.

Nations across Africa are hoping that China's enthusiasm for infrastructure investment will help promote industrialisation on the continent.

_______________

Read more:

Concern grows over Africa's Chinese debt load

China turns to Middle East as it shuns US oil imports

_______________

Nigerian President Muhammadu Buhari will oversee the signing of a telecoms infrastructure deal backed by a $328 million loan facility from China's Exim Bank during his visit, his office said.

Mr Xi said Belt and Road complied with international norms, and China "welcomes the participation of other capable and willing countries for mutually beneficial third-party co-operation".

China would be happy to help Africa upgrade its customs and commodities inspection facilities and provide supplies and equipment to improve trade connectivity with the continent, the Chinese leader said.

He also voiced hope that Chinese and African companies could find new ways to co-operate in the field of technology.

South African President Cyril Ramaphosa, who spoke after Mr Xi, said Focac should be strategic and "build links between dignity, work opportunity and economic security for all our people".

Mr Ramaphosa warned that the benefits of globalisation have not been equally distributed between countries, resulting in a "fractured world where some powers are prone to unilateral and protectionist measures".

China has provided aid to Africa since the Cold War, but Beijing's presence in the region has grown exponentially with its emergence as a global trading power. Chinese state-owned companies have aggressively pursued large investments in Africa, whose vast resources have helped fuel China's transformation into an economic powerhouse.

While relations between China and African nations are broadly positive, concerns have intensified about the impact of some of China's deals in the region. Djibouti has become heavily dependent on Chinese financing after China opened its first overseas military base in the Horn of Africa country last year, a powerful signal of the continent's strategic importance to Beijing.

Locals in other countries have complained about the practice of using Chinese labour for building projects and what are perceived as sweetheart deals for Chinese companies.

The concerns are likely to grow as countries in other parts of the world - especially South East Asia - begin to question whether Chinese aid comes at too high a price.