Home > Overseas Investment News > China pledges more investments to Africa
China pledges more investments to Africa
2013-03-25
Brief:Chinese President Xi Jinping began a tour of Africa that underlines the continent's strategic importance to China both for its resources and as a market place, signing more than a dozen trade and cooperation deals with Tanzania.

China's president Xi Jinping(left) and his Tanzanian counterpart
Jakaya Kikwete arrive at the State House in Dar es Salaam

Chinese President Xi Jinping defended China’s role in Africa and promised increased investment during his first overseas trip as head of state, countering growing criticisms from African officials who say China’s role is “predatory” with echoes of colonialism.

Speaking at a Chinese-built conference centre in Dar es Salaam, Mr Xi underscored China’s longstanding policy not to interfere in domestic politics, praised Africa’s economic growth and reaffirmed China’s pledge of $20bn in loans to Africa over the next three years. He also signed an agreement to build a major port and industrial zone in Tanzania, which officials say could cost up to $10bn.

“The African lion is galloping faster and faster, while China also maintains a good development momentum,” said Mr Xi. “We each view the other’s development as our own opportunity.”

Mr Xi will go to South Africa and the Republic of Congo on this trip, which also included a visit to Russia last Friday.

But China’s growing trade ties with Africa – bilateral trade hit $198bn last year – have been met with a growing chorus of criticism from African officials who fear that Chinese exports to Africa undermine the continent’s manufacturing sector.

“China takes from us primary goods and sells us manufactured ones. This was also the essence of colonialism,” wrote Lamido Sanusi, Nigerian central bank governor, in the Financial Times earlier this month.

Mr Xi, who framed the relationship with Africa in terms of self-interest, said“China will continue to offer necessary assistance to Africa with no political strings attached.”

Chinese diplomats routinely contrast China’s approach with that of Western countries whose armies and aid are entangled across the continent.

“That’s what African leaders tend to love – somebody with the money who will not interfere in the business,” said a senior policy adviser who was in the audience.

Much of China’s loans and aid to Africa is used for massive infrastructure and resources projects – from airports to mines to highways – and China’s imports of African crude oil have been rising during recent years.

At the same time, China’s exports of manufactured goods to Africa have hurt local producers and critics argue that state backing for Chinese companies give them an advantage in competition for infrastructure contracts. Beijing counts a cumulative $45bn of investment in Africa through June 2012, according to official statistics.

The visit to Tanzania is rich in symbolism because the Tanzania-Zambia railroad, built in the 1970s, was one of China’s first major infrastructure projects in Africa.

China is already building a $1.2bn natural gas pipeline in the country, and during his two-day visit Mr Xi signed a range of agreements on infrastructure, agriculture and commerce. One of the largest projects is a new port and industrial zone in Bagamoyo, north of Dar es Salaam, which will be constructed by China Merchant Group. The company confirmed the deal but did not disclose the price tag, which Tanzanian officials have previous put at about $10bn.

Tanzania and neighbouring Mozambique have become hotspots for oil and gas development, after recent discoveries have confirmed vast gas offshore gas deposits off the Tanzania-Mozambique coast.

The Finance Times
Relevant Information