Evidence of China's Aid to Africa and the Outlook on Sino-African Development

By Mai, Xinyue; Wilhelm, Paul G. | Competition Forum, July 1, 2012 | Go to article overview

Evidence of China's Aid to Africa and the Outlook on Sino-African Development


Mai, Xinyue, Wilhelm, Paul G., Competition Forum


EXECUTIVE SUMMARY

In recent years, with the rapid development of African economies, the 'new colonialism' tag on China's aid to Africa has been frequently reported in media. It has evoked continuous debates among scholars and critics on this issue. China's substantial aid and investments in Africa is actually for extracting natural resources to enrich China itself. Journalists have warned about the danger of the economic empire China is now building in Africa. The critics see China's aid only as a tool for intentionally further reaping the benefits of resource rich Africa. This paper examines a number of facts about China's moves in Africa and how it actually helps the development of Africa over the years by direct aid, credit lines and reasonable contracts. Because of the help from China, Africa has made immense progress in the area of politics, trade and economy, public health, culture, technology and education. Contrary to some of the media opinion, China shows no sign of serving just its own national interest and instead, it makes efforts to help create a win-win cooperation tie on Sino-African relationship. Problems emerging from the mutual cooperation and recommendations will also be discussed.

Keywords: Chinese business, China politics, African development, Sino-African relatioship

FRIENDLY COOPERATIVE RELATIONS OVER THE 50 YEARS

The History of Cooperation

China and Africa have a long history of trade relations which could date back to the days of Ming Dynasty (1368-1644). The Chinese admiral Zheng He and his fleet visited the east coast of Africa three times. Since 1949, the importance of establishing and developing friendly relations with African countries was emphasized in the Chinese foreign policy. Sharing similar historical experience and facing similar tasks and problems, China and Africa have all along sympathized and supported with each other in the struggle for national liberation and formed a solid foundation in mutual cooperative relations. In 1956, there was establishment of diplomatic relations via a bilateral trade agreement with Algeria, Egypt, Guinea, Morocco and Sudan. This marked the forming of formal ties that China has created with African countries and the beginning of China's aid to Africa.

The Wide-Range Cooperation

In the economic field, China is now actively engaging with 54 African countries on trading, investment, lending money and providing aid, covering the areas of transportation, infrastructure, agriculture, education, health and technical guidance, of which 800 projects have already been completed by 2000. Billions of dollars from China have been poured in as aid and loans for upgrading roads, ports, railways, telephone lines, power stations and other key infrastructure across Africa. This has greatly boosted local economies and infrastructure, created jobs and improved local people's living conditions. Founded in 2007 and as an equity fund dedicated to supporting Chinese investors in Africa -the China-Africa Development Fund (CAD Fund) has granted six investment projects in Africa involving more than $90 million since 2008. At the same time, the Chinese government encourages Chinese enterprises to establish businesses and enlarge investment in Africa and this winwin cooperation mode has also been widely welcomed among African countries. There's a great need to expand field of operations and achieve mutual development for the strong complementary between the two sides-Africa has abundant resources while China has technology and development experience.

In addition, closer political ties have been created between China and Africa. Frequent high-level exchanges of visits and close political dialogue have been conducted in various forms over the past 50 years. For over 20 years, African countries have been the top priority and first destination for Chinese foreign ministers visits at the beginning of every year. Between April 2006 and February 2007, the president and premier from China paid visits to 20 African counties in total and 49 highlevel delegations from African governments were present in the 2007 FOCAC summit in Beijing. …

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