China enlarges its lending to African Countries

China enlarges its lending to African Countries

China has been in the critic because of its lending initiatives in Africa and thus gaining influence on raw materials, agriculture and other areas. Now China offers another USD 20 billion of loans to African countries to develop infrastructure, agriculture, the manufacturing industry and to small and midsize enterprises. The figure is double of what China had committed in 2009

Africa has become a major source of China’s oil, metals and other commodities. At the recent gathering of African leaders in Beijing, Chinese President Hu Jintao stressed the deepening economic ties with Africa and revealed that trade between China and Africa has doubled in the past six years and was totalling USD 166.3 billion in 2011 and China’s direct investment amounted to USD 15 billion.

When China was pledging the new loan program, officials made clear that Chinese companies doing business in Africa would act responsibly and evidently this would smooth relations with the resource-rich continent despite emerging trade and social tensions.

According to the Wall Street Journal, South Africa President Jacob Zuma demanded that China’s trade with African nations should be better balanced. While Africa ships large volumes of raw materials to China, China’s exports include manufactured goods such as machinery and textiles. And Zuma added: “Africa’s commitment to China’s development has been demonstrated by the supply of raw materials, other products and technology transfer”. Directly addressing the Chinese President, he added: “As we all agree, your Excellency, this trade pattern is unsustainable in the long term”. China pledged that its companies could help to address the imbalance, including answering African calls for help in upgrading local industry and to enable such countries to export finished products and China would pay greater attention the environment.

 

WO-AK486_CAFRIC_NS_20120719174203China has been moving aggressively into Africa, but unlike the U.S. and other countries it did not attach political or environmental strings to much of its aid. But Chinese companies were criticised for their environmental and labour practices in Africa and labour tensions were rising in the recent years, particularly in Zambia, where 13 miners were shot and wounded by some Chinese managers at a Chinese owned mine during a wage dispute in 2010. The mine has been under scrutiny since over safety and labour issues, and earlier in the ongoing year a government official threatened to close the mine. Yu Ping, vice president of the China Council for Promotion of International Trade, stated “social responsibility is a matter of ethics rather than law, so the best way to strengthen social responsibility is through education and guidance.

 

 

www.wsj.com


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