China seeks to wean Africa investors off soft loans

By Incorrect Author 5 November 2009

China's government is pushing Chinese investors in Africa to give up low-interest loans and adopt commercial lending practices, as Beijing shows less willingness to take on risk. Chinese projects in Africa have been funded by preferential loans from state-owned banks that support government policy objectives. But now private investors (some estimates say up to a million) have rushed into Africa in the last few years to take advantage of one of the biggest "gold rushes" in history. China has overtaken the US as the continent's biggest trading partner, and is building vast infrastructure projects across Africa in return for lucrative minerals concessions to feed its hungry economy. Chinese Premier Wen Jiabao meets African leaders in Egypt this weekend, with investment and aid projects high on the agenda. News agency Reuters says China's direct investment in African roads, ports, railroads, apartment blocks, mines and oil pipelines, has risen 79% to $875-million in the first half of 2009, with total Chinese investment in Africa reaching $26-billion by the end of 2008. But trade with other emerging nations is also growing strongly. Brazil's annual trade with Africa soared from $3.1 billion in 2000 to $26.3 billion in 2008, outpaced only by China, where two-way annual trade has reached $107 billion.Read more: Mail and Guardian, Reuters

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