Colonial Ambitions?

In an article on, Hannah Edinger examines China’s influence in the Africa. Most interestingly, she discusses the opaque nature of China’s foreign aid to the continent:


The absence of a central aid agency, the lack of general time series data of annual aid flows, and the non-transparent nature of Chinese loans (loan interest rate, maturity, grace period, etc) complicate the process of defining, calculating and monitoring China’s development assistance to Africa. This is firstly because Beijing deliberately doesn’t disclose figures on how much aid it puts into foreign countries. Secondly, the nature of the assistance is also not known. As such, the statement made by President Hu Jintao at the 2006 FOCAC Summit of China that his country was “doubling” aid to Africa by 2009 is unverifiable. It is not known from which basis this “doubling” will occur.


China EXIM Bank, one of China’s three policy banks and the sole provider of concessional financing, plays an important role in delivering this assistance. The Bank’s lending practices are often linked to China’s foreign aid policy through the provision of concessional loans, mostly to infrastructure development. By September 2006 the Bank had 259 projects in 36 African countries, of which 80 per cent were committed to infrastructure financing, including dams, railways, oil facilities, thermal power plants and copper mines. By June 2007 it had financed over 300 projects in Africa, which made up almost 40 per cent of its loan book.

Finance extensions on commercial terms are handled by the China Development Bank. In June 2007, the Bank was designated to manage the US$5 billion China-Africa Development Fund (CADFund) announced at the FOCAC 2006 Summit and approved by the State Council in March 2007. This new strategic partnership will finance the market entry of Chinese firms into the African economy and promote private sector development on the continent through the provision of capital to Chinese firms looking to invest in African projects. While this fund does not qualify as “development assistance” per se it will encourage a more market-driven strategy to development in Africa without mounting debt repayments for recipient countries.




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