China Promises More Debt Relief, Trade, Investment, and Health Support to African Countries

Previously, we reported that the 8th Ministerial Conference of the Forum on China-Africa Cooperation (FOCAC 8) was held this week in Dakar, Senegal. During the conference, Chinese President Xi Jinping promised to provide some debt relief and engage more with African countries on health, poverty elimination and agriculture, trade, investment, and environmental protection.

President Xi gave a virtual keynote speech at the opening ceremony of the conference. During his speech, Xi mentioned that China and other parties signed the China-Africa Cooperation Vision 2035 and said that as part of the three-year plan set out in Visions 2035, China will work closely with African countries on health, poverty elimination and agriculture, trade, investment, digital innovation, green development, capacity building, cultural exchange, and a peace and security program.

With regard to trade, President Xi said that China will promote African exports to China as follows:

China will open “green lanes” for African agricultural exports to China, speed up the inspection and quarantine procedures, and further increase the scope of products enjoying zero-tariff treatment for the least developed countries (LDCs) having diplomatic relations with China, in a bid to reach 300 billion US dollars in total imports from Africa in the next three years. China will provide 10 billion US dollars of trade finance to support African export, and build in China a pioneering zone for in-depth China-Africa trade and economic cooperation and a China-Africa industrial park for Belt and Road cooperation. China will undertake 10 connectivity projects for Africa, form an expert group on economic cooperation with the secretariat of the African Continental Free Trade Area (AfCFTA), and give continued support to the development of the AfCFTA.

According to China’s Customs agency (link in Chinese), from January to October 2021, China-Africa trade totaled US$207.06 billion, a year-on-year increase of 37.5%. China has become the second largest destination for African agricultural exports, with an average annual growth rate of 11.4% for agricultural product sales to China over the past five years, according to the agency.

With regard to Chinese loans to African countries, Xi promised to “exempt African [least developed countries] from debt incurred in the form of interest-free Chinese government loans due by the end of 2021.” Last year, China also said it would waive interest-free loans to 15 African countries that were due by the end of 2020 and suspend some loans to African countries under the Group of 20 Debt Service Suspension Initiative.

And to further promote investment, “China will encourage its businesses to invest no less than 10 billion US dollars in Africa in the next three years,” “undertake 10 industrialization and employment promotion projects for Africa, provide credit facilities of 10 billion US dollars to African financial institutions,” and “channel to African countries 10 billion US dollars from its share of the IMF’s new allocation of Special Drawing Rights,” Xi said.

In fighting COVID, Xi stated that:

To help the AU achieve its goal of vaccinating 60 percent of the African population by 2022, I announce that China will provide another one billion doses of vaccines to Africa, including 600 million doses as donation and 400 million doses to be provided through such means as joint production by Chinese companies and relevant African countries. In addition, China will undertake 10 medical and health projects for African countries, and send 1,500 medical personnel and public health experts to Africa.

With regard to poverty elimination and agriculture, Xi said China will “undertake 10 poverty reduction and agricultural projects for Africa, and send 500 agricultural experts to Africa.”

To build digital innovation, Xi noted that “China will undertake 10 digital economy projects for Africa, set up centers for China-Africa cooperation on satellite remote-sensing application, and support the development of China-Africa joint laboratories, partner institutes, and scientific and technological innovation cooperation bases."

Regarding green development, Xi said that China will “undertake 10 green development, environmental protection and climate action projects for Africa.”

Finally, in terms of capacity building, China will “help build or upgrade 10 schools in Africa, and invite 10,000 high-level African professionals to seminars and workshops.”