China-Africa Focus: President Hu Jintao pledging $20 billion in loans over the next three years

July 29, 2012

Africa, Business, International

China-Africa Focus:

China-Africa poverty reduction forum opens in Tanzania with focus on agriculture modernization


DAR ES SALAAM– The third Sino-Africa forum on poverty reduction and development started on July 28 with a focus on promoting agricultural modernization as a way of lifting millions of people out of poverty.

The one-day forum held in White Sand hotel in the outskirt of Dar es Salaam was aimed at reviewing anti-poverty policies in China for over three decades and providing inspirations for some 120 participants, including policy makers, researchers, activists and investors on the continent.

“Holding this meeting soon after the conclusion of the fifth Sino-Africa ministerial forum is very opportune indeed, it presents a unique opportunity to follow up of some of the decisions made in that conference. It also underlines excellent relations between china and Africa,” said Tanzanian President Jakaya Kikwete while opening the forum.

About 70 percent of the people of sub-Sahara Africa live in rural areas and depend on agriculture for their livelihood and because of African agriculture being traditional in character, there is very little use of modern science and technology both productivity and production are very low, he said.

“As a result, there is prevalence of income poverty and food insecurity in many countries of sub-Sahara Africa,” said the president.

In these countries, more than half of the population lives on less than two dollars a day, and 238 million people are food insecure, representing 25 percent of world’s total people facing hunger. Therefore, malnutrition is also serious problem in Africa among children and pregnant women, he said.

To avert the unfavorable situations, the low productivity and production in agriculture must be addressed and solved, he said.

“African agriculture must be modernized in order to make people of our dear continent wealthier and healthier,” said the president, noting that “the time is now and we have the readiness and willingness to do it”.

Chinese ambassador to Tanzania, Lv Youqing echoed Kikwete’s remarks, saying the opening of the forum on poverty reduction is a testimony of China’s commitment to Africa, and unveils a new stage of communication and cooperation between Sino-Africa, China- Tanzania in particular, in poverty reduction and development.

Lv also commended Tanzanian government’s efforts on poverty reduction, including the launch of a series of initiatives as MKUKUTA, “Kilimo Kiwanza (Agriculture Frist)” and National Development Five-year Plan (2011-2015) and increasing budget allocation for development.

Fan Xiaojian, head of the Leading Group Office of Poverty Alleviation and Development under the State Council, outlined key policies and measures adopted by Chinese government during its fight against poverty and reiterated China’s commitment to assisting Africa to reduce poverty.

He said that African has been exploring a sustainable way of development since independence and achieved considerable success, but most countries are still facing uphill challenges on attaining MDG’s.

“In this context, strengthening the cooperation, sharing experiences between China and Africa during continuing pursuit of MDG’s is of great importance and common concern for both sides,” he said.

The forum on poverty reduction, initiated by International Poverty Reduction Center in China (IPRCC), in partnership with United Nations Development Program, has become an important platform of exchanging experiences on development between China and Africa.

The first forum on poverty reduction was held in Addis Ababa, Ethiopia in November, 2010 and the second was held in Shenzhen, China in January, 2012 with focus on Special Economic Zone.


Nigeria signs $1.49 billion railway deal with China


ABUJA- Nigeria’s government said on July 18 it had signed a $1.49 billion contract with state-owned China Civil Engineering Construction Corp (CCECC) to build a railway between the commercial capital Lagos and Ibadan.

Lagos, the heartbeat of Africa’s second largest economy, is around 130 km (80.7 miles) south of Ibadan, Nigeria’s third largest city and a transit point between the coast and the north.

“(Cabinet) today approved the award of the Lagos-Ibadan standard gauge railway double track contract to CCECC in the sum of $1.487 billion … with a completion period of 36 months,” Minister of Transport Idris Umar told reporters.

Umar gave no details on where the funds would be found to pay for the project.

Nigeria’s Ogun state, which borders Lagos state, awarded CCECC an $8.4 million road contract earlier this year.

Ethiopia signed a deal with CCECC in December last year to build the final section of a railway line that will link its capital Addis Ababa to the tiny Red Sea state of Djibouti.

Nigeria, Africa’s most populous nation, is overly reliant on its 2 million barrel crude oil export business and massive investment is needed in infrastructure, including transport and power, to help diversify its economy and alleviate poverty.

But corruption and mismanagement mean many projects never see the light of day or run well behind schedule and over budget.


 China Civil Engineering Construction Corporation (CCECC) was established in 1979 according to the approval of the State Council of the People’s Republic of China. As one of the pioneers performing international contracting and economic cooperation, CCECC has been developed from the earlier Foreign Aid Department of the Ministry of Railways into a large-scale state-owned enterprise with Chinese national Super Grade qualification for project contracting.

 CCECC, in the more than 20 years, has constantly expanded its business areas and gradually formed the operational pattern of simultaneous development of diversified business with engineering contracting as its main and railway design and construction as its speciality.

CCECC has also obtained the highest qualification for the local business is Hong Kong and abroad such as Nigeria, United Arab Emirates, Tanzania and Botswana, etc.


China strengthens Africa ties with $20 billion in loans


Chinese President Hu Jintao on Thursday offered $20 billion (12.7 billion pounds) in loans to African countries over the next three years, boosting a relationship that has been criticised by the West and given Beijing growing access to the resource-rich continent.

The loans offered were double the amount China pledged for the previous three-year period in 2009 and is the latest in a string of aid and credit provided to Africa’s many poverty-stricken nations.

The pledge is likely to boost China’s good relations with Africa, a supplier of oil and raw materials like copper and uranium to the world’s most populous country and second-largest economy.

But the loans could add to discomfort in the West, which criticises China for overlooking human rights abuses in its business dealings with Africa, especially in Beijing’s desire to feed its booming resource-hungry economy.

Hu brushed off such concerns in his speech at the Great Hall of the People, attended by leaders including South African President Jacob Zuma and Equatorial Guinea’s Teodoro Obiang Nguema, a man widely condemned by rights groups as one of the world’s most corrupt leaders.

“China wholeheartedly and sincerely supports African countries to choose their own development path, and will wholeheartedly and sincerely support them to raise their development ability,” Hu said.

China will “continue to steadfastly stand together with the African people, and will forever be a good friend, a good partner and a good brother”, he added at the summit held every three years since 2000.

Hu also pledged to “continue to expand aid to Africa, so that the benefits of development can be realised by the African people”. He did not provide an amount.

Hu said the new loans would support infrastructure, agriculture, manufacturing and development of small and medium-sized businesses in Africa.


Critics say China supports African governments with dubious human rights records as a means to get access to resources.

The EU has rejected what they call China’s “cheque book” approach to doing business with Africa, saying it would continue to demand good governance and the transparent use of funds from its trading partners.

Such criticism draws rebukes from China that the West still views Africa as though it were a colony. Many African countries say they appreciate China’s no-strings approach to aid.

“Africa’s past economic experience with Europe dictates a need to be cautious when entering into partnerships with other countries,” Zuma told the forum.

“We are particularly pleased that in our relationship with China we are equals and that agreements entered into are for mutual gain,” Zuma added.

“We certainly are convinced that China’s intention is different to that of Europe, which to date continues to intend to influence African countries for their sole benefit.”

China’s friendship with Africa dates back to the 1950s, when Beijing backed liberation movements in the continent fighting to throw off Western colonial rule.


Chinese state-owned firms in Africa also face criticism for using imported labour to build government-financed projects like roads and hospitals, while pumping out raw resources and processing them in China, leaving little for local economies.

“Certainly quite a number of us are thinking we need to move into more value addition,” South African’s Trade and Industry Minister Rob Davies told Reuters.

“We need to export mineral products in a more processed form … We need to bite this bullet very seriously.”

Trade has jumped in the past decade, driven by Chinese hunger for resources to power its economic boom and African demand for cheap Chinese products.

China’s trade with Africa reached $166.3 billion (106.2 billion pounds) in 2011, according to Chinese statistics. In the past decade, African exports to China rose to $93.2 billion (59.52 billion pounds) from $5.6 billion.

Industrial and Commercial Bank of China 601398.SS, for example, the world’s most valuable lender, has invested more than $7 billion in various projects across the continent.

(Additional reporting by Sui-Lee Wee and Sally Huang; Editing by Michael Perry)


Video: China strengthens Africa ties with $20 bln in loans


The Fifth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC)

Leaders from 50 African countries attend the opening ceremony of the Fifth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC) in Beijing, capital of China, July 19, 2012. (Xinhua/Li Xueren)


Beijing Declaration of the Fifth Ministerial Conference of the Forum on China-Africa Cooperation

July 23, 2012
1. We, the Ministers of Foreign Affairs and Ministers in charge of economic cooperation of the People’s Republic of China and 50 African countries and the Chairperson of the African Union (AU) Commission, met in Beijing from 19 to 20 July 2012 for the Fifth Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC).

2. We express our thanks to H.E. President Hu Jintao of the People’s Republic of China and H.E. President Jacob Gedleyihlekisa Zumaof the Republic of South Africa, H.E. Thomas Boni Yayi, rotating Chairperson of the African Union andPresident of the Republic of Benin, H.E. President Teodoro Obiang Nguema Mbasogo of the Republic of Equatorial Guinea, H.E. President Ismail Omar Guellehof the Republic of Djibouti, H.E. President Mahamadou Issoufouof the Republic of Niger, H.E. President AlassaneOuattaraof the Republic of Côte d’Ivoire, H.E. Prime Minister José Maria Pereira Nevesof the Republic of Cape Verde, Rt. Hon. Prime Minister Raila Amollo Odingaof the Republic of Kenya, and H.E. Mohamed Kamel Amr, Special Envoy of the President of the Arab Republic of Egypt,for attending the opening ceremony of the Ministerial Conference. We welcome the participation of the Republic of South Sudan and the AU Commission for the first time as Forum members.

3. Under the theme of “build on past achievements and open up new prospects for the new type of China-Africa strategic partnership”, we reviewed with satisfaction the development of China-Africa relations, evaluated the implementation of the follow-up actions to the Fourth Ministerial Conference of the Forum held in Sharm El Sheikh, Egypt in November 2009, and agreed that the goals set at the Fourth Ministerial Conference had been accomplished. This has further consolidated the basis of and opened up even broader space for the development of China-Africa relations. We also held discussion and reached extensive consensus on the ways and means to further deepen China-Africa relations.

4. We believe that the development of the new type of strategic partnership between China, the largest developing country, and Africa, the largest group of developing countries, is of great significance for the peace, stability and development of the world and serves the fundamental and strategic interests of both sides. As an important platform for collective dialogue and an effective mechanism of practical cooperation between China and Africa, FOCAC has played an irreplaceable role in promoting China-Africa relations. Both sides are ready to strengthen the building of FOCAC so that it will continue to steer China-Africa relations towards greater development.

5. We have taken note that the international situation is undergoing profound and complex changes. Peace, development and cooperation are the calling of the times. The balance of power in the world is moving towards more equilibrium. Developing countries are playing an increasingly important role in international affairs. We call for further changes in the international system and order to make them just and reasonable and suited to the political realities of the world. We underscore the importance for Africa to assume its rightful place in the international arena.

6. We are deeply concerned about the turbulences in certain regions and reaffirm our commitment to upholding the purposes and principles of the Charter of the United Nations and the basic norms governing international relations. We maintain that crises and disputes must be resolved peacefully through political means and advocate the security concept featuring mutual trust, mutual benefit, equality and coordination. We oppose interference in other countries’ internal affairs and wanton use or threat of force in international affairs.

7. We stand for upholding the UN’s core position and role in international affairs, and reaffirm the need for reform of the United Nations. In this regard, we reaffirm that the historical injustices endured by African countries should be undone, and priority should be given to increasing the representation of African countries in the UN Security Council and other UN agencies.

8. We are concerned that the global financial crisis is still spreading and deepening, and the world economic situation remains grim. We believe that countries around the world should work to pursue peace, promote development and resolve differences through cooperation, with a view to achieving stability and recovery of the world economy.

9. We believe that the North-South imbalance in development is an important factor hindering the strong, sustainable and balanced growth of the world economy. We reaffirm the priority of the issue of African development in narrowing the North-South gap. We call on the international community to earnestly increase input, and give support and help to African countries in their efforts to realize the UN Millennium Development Goals.

10. We appreciate the attention paid by the United Nations Conference on Sustainable Development, which was held in June 2012, on the issue of sustainable development in Africa. We hope that the international community will, in keeping with the principle of “common but differentiated responsibilities”, take concrete actions to implement the outcome of the Conference. We call on the international community to, under the leading role of the UN, take seriously the inefficient implementation in the field of sustainable development, show the political will and commitment to build consensus, and reach agreement on the implementation plan of the post-MDG framework of sustainable development. We also urge the developed countries to honor their assistance commitments to developing countries, African countries in particular.

11. We believe that a fair, reasonable and non-discriminatory multilateral trading system is of critical importance to consolidating world economic recovery and sustainable development. We appeal to the relevant parties to demonstrate political sincerity, overcome difficulties and obstacles, actively advance the WTO Doha Development Round negotiations on the basis of upholding the Doha mandate and locking up the existing achievements, and fully accommodate the interests and concerns of developing countries, African countries in particular. We call upon the developed countries to refrain from taking steps in trade protectionism.

12. We stand for necessary reform of the existing international financial system, and the establishment of a fair, just, inclusive and orderly international financial system. Efforts should be made to truly increase the voice and representation of developing countries in international financial institutions and the international monetary system, and strengthen the functions of the international financial institutions in development and poverty reduction, in an effort to narrow the North-South gap. The African side supports the BRICS countries in exploring the possibility of setting up a new development bank for mobilizing resources for infrastructure and sustainable development projects in BRICS countries and other emerging economies and developing countries, for the purpose of supplementing the existing multilateral and regional financial institutions for global growth and development.

13. We have followed closely the question of increased threats and challenges brought by global issues such as climate change, environmental degradation, energy and resource security, major infectious diseases and massive natural disasters. We congratulate South Africa on successfully holding the UN Climate Change Conference in Durban, and believe that the relevant parties would, in accordance with the principles and provisions of the United Nations Framework Convention on Climate Change, faithfully implement the consensus on such issues as the Durban Platform for Enhanced Action, the second commitment period of the Kyoto Protocol, the Green Climate Fund, the technical mechanism and adaptation. We are willing to strengthen the comprehensive, effective and sustained implementation of the United Nations Framework Convention on Climate Change and the Kyoto Protocol, and jointly promote the process of international cooperation on climate change in accordance with the principles of equity and “common but differentiated responsibilities”.

14. We are pleased to see the achievements China and Africa have both made in the political, economic, social and other areas in recent years, and have full confidence in each other’s future development. The African side highly appreciates China’s commitment to the path of peaceful development and its contribution to world peace, stability and economic growth. China applauds the effective efforts the African side has made in such areas as maintaining regional peace and stability, achieving higher growth rates and seeking strength through unity.

15. We believe that the China-Africa cooperation, featuring mutual benefit, equality, openness and inclusiveness, demonstrates the solidarity and mutual support between developing countries. It should be appreciated and supported by the international community. We call on the international development partners to draw on each other’s strength and have sound interactions in Africa to jointly promote peace and development in the continent.

16. We reaffirm that China and Africa will continue to deepen the new type of strategic partnership of political equality and mutual trust, economic win-win cooperation and cultural exchanges. To this end, we will:

-Further strengthen political consultation and strategic dialogue, increase high-level visits, enhance the sharing of experience in governance, and respect and support each other’s core interests on such issues as sovereignty, independence, security, unity, territorial integrity and national development, so as to increase the political trust and strategic consensus between China and Africa.

-Increase the exchanges and cooperation between the two sides in operationalizing Africa’s Peace and Security Architecture, continue to support and assist African countries in increasing their capabilities for maintaining peace and security, and enhance coordination and communication in the UN Security Council and other multilateral institutions. We call on the international community to support the efforts of African countries and regional organizations in independently resolving African issues.

-Strengthen China’s cooperation with the AU and sub-regional organizations in Africa, take joint measures to promote Africa’s solidarity, harmony and strength through unity, and support measures for African regional integration and sustainable development efforts through AU/NEPAD.

-Fully explore and utilize each other’s comparative advantages, expand mutually beneficial economic cooperation and balanced trade, adopt innovative ways to boost cooperation, improve cooperation environment, and properly handle problems and difficulties arising in cooperation. We will conduct even richer and more fruitful cooperation in response to the adverse impact of the global financial crisis and bring benefits to the Chinese and African people. Building on the achievements we have made, we will deepen our cooperation in trade, investment, poverty reduction, infrastructure building, capacity building, human resources development, food security, hi-tech industries and other areas, and elevate our cooperation to a higher level.

-Continue to strengthen people-to-people and cultural exchanges and cooperation between the two sides. We will vigorously carry out the dialogue between Chinese and African civilizations, launch a new round of exchanges in culture, education, sports, tourism and other fields, and forge closer ties between the young people, women, non-governmental organizations, media organizations and academic institutions of the two sides, with a view to deepening the understanding and friendship between the people of China and Africa and promoting the diversity of the world civilizations.

-Further strengthen the cooperation between the two sides in international affairs, take into full account each other’s legitimate concerns and aspirations, strengthen coordination and mutual support, and work together to promote democracy in international relations and build a harmonious world of durable peace and common prosperity.

17. We have, in the spirit of this Declaration, formulated and adopted the Beijing Action Plan of the Fifth Ministerial Conference of the Forum on China-Africa Cooperation (2013-2015).

18. We express our thanks to Egypt for its contribution to the Forum’s development and China-Africa relations since the inception of FOCAC, in particular during Egypt’s chairmanship of the Forum from 2006 to 2009 and its co-chairmanship from 2009 to 2012.

19. We express our thanks to the Chinese side for the meticulous preparations and thoughtful arrangements for the Conference, and convey our congratulations on the fruitful results and great success of the Conference. We decided that the next ministerial conference of FOCAC will be held in South Africa in 2015.


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