China’s USD60 billion pledge to Africa

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The just ended Forum on China-Africa Cooperation (FOCAC) in Beijing,China showcased South-South cooperation at a time when protectionist policies have gained ground in some major economies and which risk undermining North-South partnerships. China’s pledge of another USD60 billion in additional support for African countries has fueled debate on the sustainability of China’s financial and trading relationship with Africa.

Forum_on_China-Africa-FOCACMeanwhile, the African Development Bank has welcomed China’s cooperation, arguing that China is rapidly changing its investment stance and moving towards a private sector model of financing.  According to the Bank, the new financing will focus on industrial promotion, infrastructure connectivity, trade facilitation, green development, capacity building, health care and people-centred initiatives as well as peace and security initiatives.

The new funding includes USD15 billion in grants and interest-free loans; USD20 billion in credit lines; USD10 billion for development financing and USD5 billion to finance imports from Africa. Additionally, Chinese companies will be encouraged to invest a minimum of USD10 billion in Africa through to 2021.

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