---

Guest post by: International Monetary Fund Become an Author

Tweet

---

---

As China’s economic engagement with Africa has become more sophisticated, involving
more and different players, it has become necessary to look beyond the central government to
understand the driving forces behind recent developments. This chapter pays particularly
better attention to China’s state financial institutions.
A. China’s African Policy and New Commitments for 2007–09
China’s first African Policy Paper, issued in January 2006, articulates the objectives of
Chinese policy toward Africa and how they are to be achieved. Because the intention is to
build a new type of strategic partnership, the paper emphasizes “mutual benefit,” “common
development,” and “win-win” results in economic relations. It outlines government actions to
promote trade, investment, financial services, agriculture, infrastructure, resources
development, and tourism. The approach is supported by financial and technical assistance in such noncommercial areas as health and education. The thrust of this policy is vividly
demonstrated in China’s new commitments to Africa.
During the Beijing Summit of the Forum on China-African Cooperation in November 2006,
President Hu Jintao of China announced new commitments to Africa for 2007–2009:
• Preferential credits: US$5 billion, consisting of US$3 billion concessional loans and
US$2 billion export buyers credits.19
• Direct investment: A US$5 billion China-Africa Development Fund to support
Chinese FDI in Africa.
• Trade: Further opening up China’s market to Africa by expanding the list of dutyfree
African exports and setting up trade cooperation zones in Africa.
• Grants and debt relief: A doubling of 2006 assistance, to build hospitals, malaria
prevention and treatment centers, and rural schools in Africa and a conference center
for the African Union; and cancellation of all interest-free loans owed by eligible
countries that had matured by the end of 2005.
• Technical assistance: Training for African professionals and sending agriculture
experts to Africa; setting up agriculture technology demonstration centers in Africa;
doubling Chinese government scholarships for African students.
With its heavy emphasis on trade and investment, the new commitment package is consistent
with China’s Going Global strategy, which encourages Chinese enterprises to compete for
resources and markets beyond Chinese borders.
These commitments do not include trade and project financing by Chinese banks on
commercial terms. In May 2007, during the African Development Bank Annual Meetings in
Shanghai, officials of China Exim Bank reportedly stated that they plan to provide about
US$20 billion in infrastructure and trade financing to Africa over the next three years.2

IMF Working Paper
African Department
What Drives China’s Growing Role in Africa?
Prepared by Jian-Ye Wang
October 2007

Related Articles

  Macroeconomic “Shock-absorbers” for Africa
  2.2 Sectoral performance II: Economic Report on Africa 2007
  III. C. Commercial Policies: THE ROLE OF CHINA’S PUBLIC SECTOR
  3.1.4 Overall resource availability: Training priorities, resources and reorientation
  6.3 Financial sector links between investment and diversification: Economic Report on Africa 2007
  African Reforms are essential to Boost Private-sector Development and Improve Governance
  5.5 Energy access as market failure: Enterprise solutions to poverty
  A Limited Impact on Private Sector Development
  5.2 Diversification-deepening policies raise growth and TFP: Economic Report on Africa 2007
  SME's - the impact of government mindset on entrepreneurship
  II.C. Other Debt-Creating Financial Flows: TRADE AND CAPITAL FLOWS BETWEEN CHINA AND AFRICA
  What Drives China’s Growing Role in Africa?
  17.0 What Needs to be Done - Mainstreaming Entrepreneurship: Entrepreneurs and entrepreneurship in Africa
  Wanted: jobs for Africa’s youth - Policy Reforms
  Africa and its International Environment: Taking up the Challenges of Aid Quality and Competitiveness
  6.2 Trade and sectoral policies for diversification: Economic Report on Africa 2007
  IV. A. Private Traders: THE ROLE OF THE PRIVATE SECTOR
  18.0 Conclusion: Entrepreneurs and entrepreneurship in Africa
  2.1 Growth performance I: Economic Report on Africa 2007
  5.2 Structure for implementing the SME Development Policy: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005

Related Forum Posts

What do you do to give back?
Re: How will an african make money truely on the net?
Re: How will an african make money truely on the net?
Re: How will an african make money truely on the net?
Re: Small Business grant listings and other grant listings

Share this article. Fund someone's dream.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Join Conversations Politely, Part 1

Facial Hair in the Office? The Pros and Cons

Affirming Others Builds Trust and Motivation

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.