China waives debt, promises 'no imposition of will' on African nations
Advertisement

China waives debt, promises 'no imposition of will' on African nations

Beijing: Chinese President Xi Jinping has pledged to waive debts for the least developed African countries that have both high debt burdens and diplomatic ties with China.

The move comes as China is seeking to dispel criticism that its Belt and Road Initiative is a form of "debt trap diplomacy" that has left African and Pacific nations with high debt levels after accepting loans from Chinese banks for infrastructure projects.

Female members of Chinese People's Liberation Army honour guard wait for the welcome ceremony for Botswana President Mokgweetsi Masisi in Beijing.

Female members of Chinese People's Liberation Army honour guard wait for the welcome ceremony for Botswana President Mokgweetsi Masisi in Beijing.Credit:AP

Speaking at the opening of a summit with African leaders in Beijing, Xi said his country would offer an extra $US60 billion ($83 billion) in financing to African countries.

"In addition, for Africa's least developed countries, heavily indebted and poor countries, landlocked developing countries and small island developing countries that have diplomatic relations with China, the debt they have incurred in the form of interest-free Chinese government loans due to mature by the end of 2018 will be exempted," Xi said.

Advertisement

The caveat that nations must have diplomatic relations reflects the fact that China is locked in a global contest with Taiwan for diplomatic recognition.

Fifty-three African states have diplomatic relations with China. Only one, eSwatini, formerly known as Swaziland, continues to recognise Taiwan. It did not attend the Beijing forum.

China has enticed three countries to switch recognition away from Taiwan this year.

In November, Xi will hold a forum in Papua New Guinea with Pacific Island leaders before he attends APEC. Pacific leaders have been divided over whether they should call on China to waive debts.

Xi said the $US60 billion in financing would include $US15 billion in grants, interest free loans and concessional loans, $US20 billion in credit lines, a $US10 billion special development fund, and $US5 billion to increase imports from Africa.

Chinese companies would be encouraged to invest another $US10 billion in Africa within three years.

Xi highlighted that China's foreign policy towards the Africa continent was different to western nations, calling it the "Five No's".

Somalia's President Mohamed Abdullahi Mohamed shakes hands with Xi Jinping.

Somalia's President Mohamed Abdullahi Mohamed shakes hands with Xi Jinping.Credit:AP

"We follow a 'five-no' approach in our relations with Africa: no interference in African countries' pursuit of development paths that fit their national conditions; no interference in African countries' internal affairs; no imposition of our will on African countries; no attachment of political strings to assistance to Africa; and no seeking of selfish political gains in investment and financing cooperation with Africa," he said.

The assistance included $US1 billion in food aid and 50 agricultural assistance projects.

The Forum on China-Africa Cooperation has dominated Chinese state media, with Xi pictured welcoming each of the African leaders to Beijing.

Chinese news agency Xinhua reported that South African President Cyril Ramaphosa used his keynote speech to reject accusations of Chinese colonialism.

A couple and a child walk by a decoration titled "Common Prosperity" set up for the Forum on China-Africa Cooperation in Beijing.

A couple and a child walk by a decoration titled "Common Prosperity" set up for the Forum on China-Africa Cooperation in Beijing.Credit:AP

"[This forum] refutes the view that a new colonialism is taking hold in Africa, as our detractors would have us believe," he said. China is South Africa's largest trading partner.

The IMF warned this year that 40 per cent of  low income African countries were in debt distress or at high risk of it.

The China Africa Research Initiative at John Hopkins University says the United States, not China, was the largest donor to Africa between 2000 and 2017, even as Chinese government and bank loans reached $US136 billion.

A member of Chinese People's Liberation Army waits for a welcome ceremony to start.

A member of Chinese People's Liberation Army waits for a welcome ceremony to start.Credit:AP

However Chinese loans to Africa more than doubled in 2016. China is the largest creditor to three countries in debt distress, Djibouti, Congo and Zambia. Djibouti, with $US1.9 billion in Chinese debt tied to port expansions, railways and airports, is a key port on the Suez Canal. China has a military base there.

The Chinese Foreign Ministry last week said the African debt issue was "by no means merely an economic and financial issue, but the result of an unfair and unreasonable international economic order".

Between 2000 and 2016 China's loans accounted for 1.8 per cent of Africa's foreign debts, said  ministry spokeswoman Hua Chunying.