Aside from intergovernmental loans, there are other debt-creating financial flows from China to Africa, mainly trade credits, some of which are medium- and long-term.13 Trade credit may be provided by suppliers or financial institutions. Of these the Export-Import Bank of China (China Exim Bank) is the most active. Its total export credit and international guarantee business increased to US$19.8 billion in 2006, from US$15.2 billion in 2005.
Though China Exim Bank does not report activities by region, there is clear evidence of significant and expanding operations in Africa.
By the end of 2005, China Exim Bank had approved more than 50 billion yuan (US$6.5 billion) for projects in Africa, which accounted for close to 10 percent of the Bank’s total approvals at that time. 14 Estimates by World Bank staff compiling data from public sources are much higher—China Exim Bank loans to SSA for infrastructure alone amounted to US$12.5 billion by mid-2006.15 As of September 2006 there were 259 China Exim Bank projects in 36 African countries, and 79 percent of its commitments to Africa were for infrastructure (Ellis, 2007). According to news reports summarized by Moss and Rose (2006), several of these projects are very large.16 This financing is clearly much larger than ODA flows.
What is not clear is the extent to which China Exim Bank’s projects or its commitments give rise to external debt of African countries, because the financial arrangements and obligors vary from project to project. China Exim Bank’s annual reports indicate that export buyers’
credit accounted for only 10 percent of its new commitments in 2005–06.
IMF Working Paper African Department What Drives China’s Growing Role in Africa?
Prepared by Jian-Ye Wang October 2007
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Dianne Crampton is an Executive Leadership Coach and Team Building Consultant and creator of the TIGERS team development model. For the past twenty years she has helped leaders and teams achieve goals with high levels of collaboration and teamwork.
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