China’s Xi offers $60bn Africa aid, says ‘no strings attached’
September 03 2018 09:54 PM
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China’s President Xi Jinping (front centre) stands as participants arrive for the opening ceremony of the Forum on China-Africa Co-operation at the Great Hall of the People in Beijing yesterday. Xi offered $60bn to Africa at the start of a two-day China-Africa summit that focused on his cherished Belt and Road initiative.

AFP/Beijing

Chinese President Xi Jinping told African leaders yesterday that China’s investments on the continent have “no political strings attached”, pledging $60bn in new development financing, even as Beijing is increasingly criticised over its debt-heavy projects abroad.
Xi offered the funding at the start of a two-day China-Africa summit that focused on his cherished Belt and Road initiative.
The money – to be spent over the next three years – comes on top of $60bn Beijing offered in 2015.
The massive Belt and Road scheme is aimed at improving Chinese access to foreign markets and resources, and boosting Beijing’s influence abroad.
China has poured billions in loans for roads, railways, ports and other major infrastructure projects in Asia and Africa.
But critics warn that the Chinese leader’s pet project is burying some countries under massive debt.
“China’s investment in Africa comes with no political strings attached,” Xi told a high-level dialogue with African leaders and business representatives ahead of the summit.
“China’s co-operation with Africa is clearly targeted at the major bottlenecks to development. Resources for our co-operation are not to be spent on any vanity projects, but in places where they count the most.”
But Xi admitted there was a need to look at the commercial viability of projects and make sure preparations are made to lower investment risks and make co-operation “more sustainable”.
Belt and Road, Xi said, “is not a scheme to form an exclusive club or bloc against others.”
Later, at the start of the Forum on China-Africa Co-operation (FOCAC), Xi announced $60bn in funds for eight initiatives over the next three years, in areas ranging from industrial promotion, infrastructure construction and scholarships for young Africans.
He added that Africa’s least developed, heavily indebted and poor countries will be exempt from debt they have incurred in the form of interest-free Chinese loans due to mature by the end of 2018.
A study by the Center for Global Development, a US think tank, found “serious concerns” about the sustainability of sovereign debt in eight Asian, European and African countries receiving Belt and Road funds.
But South African President Cyril Ramaphosa defended China’s involvement on the continent, saying FOCAC “refutes the view that a new colonialism is taking hold in Africa as our detractors would have us believe.”
During a visit to China last month, Malaysian Prime Minister Mahathir Mohamed warned against “a new version of colonialism”, as he cancelled a series of Chinese-backed infrastructure projects worth $22bn.
Rwandan President Paul Kagame, current chairman of the African Union, also rallied behind China’s involvement in Africa.
“Africa is not a zero sum game. Our growing ties with China do not come at anyone’s expense,” he told the summit.
At the last three-yearly gathering in Johannesburg in 2015, Xi announced $60bn of assistance and loans for Africa.
Nations across Africa are hoping that China’s enthusiasm for infrastructure investment will help promote industrialisation on the continent.
Ramaphosa noted that Africa exports its minerals to China while the Asian country exports to the continent what its factories produce.
“This obviously limits ability African countries to extract full value of abundant natural resources and create work for its people.
It is through platforms like FOCAC that we should work to balance the structure of trade between Africa and China,” he said. Nigerian President Muhammadu Buhari will oversee the signing of a telecommunication infrastructure deal backed by a $328mn loan facility from China’s Exim bank during his visit, his office said.
China has provided aid to Africa since the Cold War, but Beijing’s presence in the region has soared with its emergence as a global trading power.
Chinese state-owned companies have aggressively pursued large investments in Africa, whose vast resources have helped fuel China’s transformation into an economic powerhouse.
African Union Commission chairman Moussa Faki acknowledged that concerns have been expressed about debt, but said “the risks must be put into perspective” as “Africa’s financing needs are such that it must seize every opportunity offered to it.”
Djibouti has become heavily dependent on Chinese financing after China opened its first overseas military base in the Horn of Africa country last year, a powerful signal of the continent’s strategic importance to Beijing.
Locals in other countries have complained about the practice of using Chinese labour for building projects and what are perceived as sweetheart deals for Chinese companies.
An editorial in Kenya’s Daily Nation said yesterday that African leaders “should use the summit to ask tough questions.
What are the benefits in this relationship? Is China unfairly exploiting Africa like the others before it?”


China’s President Xi Jinping (front centre) stands as participants arrive for the opening ceremony of the Forum on China-Africa Co-operation at the Great Hall of the People in Beijing yesterday. Xi offered $60bn to Africa at the start of a two-day China-Africa summit that focused on his cherished Belt and Road initiative.


India allows state refiners to use Iran tankers


Reuters
New Delhi




India is allowing state refiners to import Iranian oil with Tehran arranging tankers and insurance after firms including the country’s top shipper Shipping Corp of India (SCI) halted voyages to Iran due to US sanctions, sources said.
New Delhi’s attempt to keep Iranian oil flowing mirrors a step by China, where buyers are shifting nearly all their Iranian oil imports to vessels owned by National Iranian Tanker Co (NITC).
The moves by the two top buyers of Iranian crude indicate that the Islamic Republic may not be fully cut off from global oil markets from November, when US sanctions against Tehran’s petroleum sector are due to start.
President Donald Trump ordered the reimposition of economic curbs after withdrawing the United States from a 2015 nuclear deal between Iran and six world powers. No one trading with Iran will do business with America, he said.
“We have the same situation (as most Western shippers) because there is no cover, so we cannot go (to Iran),” an SCI official told Reuters.
New Delhi turned to the NITC fleet after most insurers and reinsurers had begun winding down services for Iran, wanting to avoid falling foul of the sanctions given their large exposure to the United States.
SCI had a contract until August to import Iranian oil for Mangalore Refinery and Petrochemicals Ltd (MRPL), two sources familiar with the matter said.
Eurotankers, which had a deal with MRPL to import two Iranian oil cargoes every month, has also said it cannot undertake Iranian voyages from September, the sources said.
The sources spoke on condition of anonymity as they were not allowed to talk to the media about commercial deals.
“The shipping ministry has given refiners permission to buy Iranian oil on a CIF (cost, insurance and freight) basis,” a government source said. Under a CIF arrangement, Iran would provide shipping and insurance, enabling Indian refiners to continue purchases of the country’s oil despite the non-availability of cover from Western insurers due to the restrictions imposed by Washington.
The move would benefit Indian Oil Corp (IOC), Bharat Petroleum Corp Ltd (BPCL) and MRPL, which plan to lift Iranian cargoes during the rest of the fiscal year ending on March 31. India wants to continue buying oil from Opec member Iran as Tehran is offering almost free shipping and an extended credit period.
State refiners, which drove India’s July imports of Iranian oil to a record 768,000 barrels per day, had planned to nearly double oil imports from Iran in 2018/19.
Unlike their private peers, India’s state-run refiners need government permission to import oil on a delivered, or CIF, basis.
Federal policy requires them to favour Indian insurers and shippers by buying only on a free on board (FOB) basis.
The permission for CIF purchases applies only to existing annual contracts with Iran, the government source said.
India, Iran’s top oil client after China, will finalise its strategy on crude purchases from Tehran after a meeting with top US officials this week, a senior government official told Reuters last week.


Last updated: September 03 2018 09:57 PM


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