China Announces $3 Billion Loan Plan for Africa

China will lend African nations $3 billion in preferential credit over three years and double aid and interest-free loans over the same time, China’s Commerce Ministry said ahead of President Hu Jintao’s tour to woo the continent.

The announcement stressed that the offer came with none of the strictures that Western countries often demand. “The preferential loans provided by China carry no political conditions,” it said.

Mr. Hu’s tour starts today, January 30, 2007, and is expected to yield business deals.

He will visit Cameroon, Sudan, Namibia, South Africa, Seychelles, Liberia, Zambia and Mozambique.

His trip comes three months after Beijing grandly courted the continent by hosting a meeting for 48 African leaders.

—————-

SustainabiliTank.info remarks that five of the States on Mr. Hu’s itinerary are States with oil potential.

——————

China’s Hu, Seeking Oil, Visits Eight African States (Update2)
by Allen T. Cheng for Bloomberg - January 30, 2007.

Chinese President Hu Jintao, visiting Africa for the second time in a year, will bring billions of dollars in investment and loans to eight countries this week in a bid to secure resources from oil to gold.

He may also try to persuade Sudan’s Umar Hassan al-Bashir to accept UN peacekeepers to help solve the crisis in the country’s Darfur region, which has killed more than 200,000 people in the past four years.

Hu’s wooing of Africa through trade, loans and direct investments in oil and mineral industries has won China diplomatic allies and secured supplies of natural resources. That strategy has also put the spotlight on China’s role in blocking UN sanctions condemning Sudan for the violence in Darfur.

“By investing in Africa and taking stakes in African oil wells and mines,” said Jonathan Barratt, managing director of Sydney-based Commodity Broking Services, “China has cut out the middleman and completely avoided buying from the spot market.”

African nations like China because it doesn’t interfere with their internal affairs, builds roads and ports and gives low-cost loans, according to Eltyeb Hag Attia, the director of the University of Khartoum’s Institute of Peace Research. “The overall package China provides is seen by African countries as very favorable.”

Hu left Beijing today for a 12-day trip to Cameroon, Liberia, Sudan, Zambia, Namibia, South Africa, Mozambique and Seychelles. Most of the nations are rich in oil or commodities.

$8 Billion Pledge

China hosted 48 African leaders at a summit in Beijing in November after visits by Hu to Nigeria, Morocco and Kenya in April and by Premier Wen Jiabao to Egypt, Ghana, Congo, Angola, South Africa, Tanzania and Uganda in June.

Hu pledged to double Chinese aid to the continent by 2009 at the summit and announced a $5 billion fund for investments and $3 billion of loans in the coming three years.

China, the world’s fastest-growing major economy, had invested close to $8 billion in Africa by the end of 2006, up from a total of $6.27 billion at end of 2005, according to China’s Assistant Foreign Minister Zhai Jun. It also has written off $1.38 billion in loans to 31 heavily indebted African nations, according to state news agency Xinhua.

Africa supplied between 25 percent and 28 percent of China’s oil imports in 2006, according to Jaspal Singh, a Washington, DC-based energy analyst and former adviser to the World Bank and the Chinese government on energy use.

China’s Domestic Oil Production Stagnation:

“China’s domestic production has stagnated in recent years and Africa has come to fill the void,” Singh said in an interview. “This is why Africa is so important to China.”

At the November China-Africa forum, Chinese companies signed 16 contracts worth $1.9 billion with 11 African nations to buy oil, minerals and build roads and phone networks. China’s annual two-way trade with the continent may double to $100 billion by 2010.

China National Petroleum Corp., the country’s largest oil company, won the right to develop Sudan’s first offshore oil fields in 2005. Sudan supplies roughly 8 percent of China’s oil imports, Singh said.

China has been criticized by groups including Human Rights Watch for propping up regimes in Sudan, Angola and Zimbabwe. “If China is to gain the international respect it craves, it must shun - not subsidize - these governments,” the New York- based activist group said in its 2007 report.
China Was Not An African Colonial Oppressor:

China said today that it would support a joint United Nations-Africa Union peacekeeping mission to Darfur. “We will act positively to support” a Security Council motion to provide funding to such a force, Foreign Ministry spokeswoman Jiang Yu said at a regular briefing in Beijing.

Criticism that China is acting like a colonial power is “unfair,” assistant foreign minister Zhai said at a Jan. 23 briefing in Beijing.

“If we’re exploiting Africa like past colonial governments, then I can guarantee you that they’ll get together and repel China like the way they repelled the colonial oppressors,” Zhai said. “But 48 African heads of states came to Beijing just a few months ago. Why would they come if they didn’t like China?”

“Many African nations cannot look to the U.S. or Europe as models for development because they are simply too advanced,” said Hu Biliang, a senior economist with the Chinese Academy of Social Sciences, a Beijing-based government think-tank, in a phone interview.

“China is a developing nation and ideologically similar. Oil and energy trade offer China and Africa a mutual opportunity to gain through trade, but more importantly China offers many African states an example of development, a road to follow.”

To contact the reporter on this story: Allen T. Cheng in Beijing at  acheng13 at bloomberg.net

———————–

China and Sudan: President Hu can bring relief to Darfur - if he wants to - this is the US position.

Washington Post, January 30, 2007,  article distributed to the press also by the US State Department.

THE DARFUR crisis has demonstrated the limits of U.S. influence. President Bush
and administration officials have described it as genocide and pushed
intermittently for sanctions, peacekeeping deployments, and a deal between
Sudan’s government and its rebel opponents, but their efforts have been hampered
by the hesitancy of other players. Sanctions resolutions in the U.N. Security
Council have been delayed and diluted because Russia sells weapons to Sudan’s
government and because China has a large stake in Sudan’s oil. Efforts to deploy
a serious peacekeeping force have been undermined partly by foot-dragging within
the Security Council, partly by the indifference of Sudan’s Arab neighbors to
the suffering of Darfur’s Muslim victims and partly by the ambivalence of the
African Union, which has veered between brave efforts to supply soldiers and a
misplaced deference to Sudanese President Omar Hassan al-Bashir. Yesterday
brought a small victory in the effort to force action. Now a bigger test
follows.
Yesterday’s victory occurred at the summit of the African Union. For the second
consecutive year, Mr. Bashir sought the presidency of the union, even though its
chief achievement has been the Darfur peacekeeping operation made necessary by
Mr. Bashir’s own support for genocide. In the days before the meeting, reports
suggested that Mr. Bashir might succeed in his ambition, an outcome that would
have destroyed the African Union’s credibility not only in Darfur but in
conflict mediation elsewhere. Fortunately, Africa’s leaders balked at this
prospect and chose a rival candidate.
The next test involves Chinese President Hu Jintao, who today begins a 12-day
tour of Africa that includes a stop in Sudan. Mr. Hu’s main goal is to do
business: China’s trade with Africa is booming. But he may also be ready to push
Sudan’s leadership to accept the deployment of a U.N. peacekeeping force that
would build on the existing African Union contingent. A Security Council
resolution already calls for such a deployment, but Mr. Bashir has been
resisting it. Yesterday a Sudanese spokesman indicated that his government no
longer objected, perhaps signaling an awareness of the limits to China’s
willingness to provide diplomatic cover.
The African Union snub and the Chinese leader’s visit provide an opportunity to
regain the initiative on Darfur, which is descending further into misery and is
destabilizing its neighbors. Yesterday a French aid group said it was pulling
out of the territory because of insecurity, and on Sunday six other
international charities said their work in Darfur was close to a standstill.
Fighting has spread into neighboring Chad and the Central African Republic; it
is a primary reason that Sudan’s north-south peace agreement, concluded after a
two-decade war that killed an estimated 2 million people, is at risk of
unraveling. The question for Mr. Hu is whether he merely wants to create an
illusion of diplomatic progress on Sudan to protect China from the appearance of
complicity in genocide or whether he means to ensure that peacekeepers are
deployed.
*-*-*