Out-Law News 1 min. read
21 May 2014, 11:09 am
The 'Africa Growing Together Fund' marks a shift in China's traditional approach to investment in Africa, in which China has loaned money to African nations to fund projects carried out by Chinese contractors, said the newspaper. The new fund will open contracts to the most suitable bidder, rather than just Chinese companies.
“China has been using a bilateral route in Africa," said an official familiar with the projects, according to the Financial Times. "Now it is taking a more multilateral [approach]."
China has been criticised by western interests and African officials in the past for its approach to lending in Africa.
Earlier this month China signed a deal with east Africa leaders to develop a multi-billion dollar rail project which Kenyan president Uhuru Kenyatta said will cut the cost of transporting goods across the region by 60%. China Road and Bridge Corporation, a subsidiary of China Communications Construction Company, has been appointed to construct the initial Kenyan leg of the new line, in a move which Kenya said was a condition of securing Chinese financing, according to Reuters.
On a four-nation state visit to Africa earlier this month, Chinese premier Li Keqiang said that Beijing's relationship with its African partners had suffered “growing pains”, but rejected claims that Beijing was pursuing a neo-colonialist policy in Africa, said the Financial Times.
“I wish to assure our African friends, in all seriousness, that China will never pursue a colonialist path like some countries did or allow colonialism, which belonged to the past, to reappear in Africa,” Li said. “For China and Africa, co-operation means opportunities, co-operation is win-win."
The new fund is expected to be signed off this week during the AfDB's annual meeting to be held in the Rwandan capital of Kigali, said the Financial Times. Neither Beijing nor the AfDB has officially commented on the signing of the fund so far.
Trade between China and Africa stood at $200bn last year, compared to $10bn in 2000 and $1bn in 1980, according to Chinese customs data, the newspaper said.