China did not provide the debt relief that many African countries needed this week, but it did commit 360 billion yuan ($50.7 billion) in credit lines and investments over three years.
The Forum for China-Africa Cooperation (FOCAC), established in 2000, took on a new role with the 2013 introduction of President Xi Jinping’s Belt and Road Initiative (BRI), which seeks to reconstruct the ancient Silk Road for the world’s second-largest economy and largest bilateral lender to Africa.
“China is regaining the lead in terms of overseas capital deployment in emerging markets,” said Tellimer’s Hasnain Malik, adding that it was still below pre-Covid levels.
China has also attempted to use FOCAC to offset increasing competition in Africa from the United States, the European Union, Japan, and others.
Diplomats and delegates from all over the world congregated at Beijing’s Great Hall of the People in Tiananmen Square for a group portrait with leaders from over 50 African countries and Chinese authorities led by Xi Jinping.
The latest financial contribution exceeds what Beijing committed at the most recent FOCAC in 2021, but it falls short of the $60 billion pledged in 2015 and 2018, when lending to Africa reached its pinnacle under the Belt and Road Initiative.
During the peak years, Beijing funded the development of roads, trains, and bridges. However, Africa’s construction projects have been halted since 2019 due to a lack of money.
China stated that the new money will be used to fund 30 infrastructure projects to strengthen trade relations, but provided no further information.
The 54-nation continent of more than 1 billion people faces an annual infrastructure financing shortage of $100 billion and requires transportation connectivity to make a new gigantic pan-African trade bloc (AfCFTA) a reality.
In recent years, Beijing has reduced support for such projects in favour of “small and beautiful” initiatives, owing mostly to domestic economic pressures and an increase in debt concerns among African countries.
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