President Jacob Zuma cautioned on Thursday that Africa’s trade relationship with China was “unsustainable” even as his Chinese counterpart, Hu Jintao, promised $20 billion (R163bn) in new loans to the continent.
China had demonstrated its commitment to Africa with investment and development aid, while Africa had supplied raw materials and technology, Zuma told leaders at the Forum on China-Africa Co-operation in Beijing. Africans were pleased that they were “equals” in the relationship with China, he said.
However, in terms of the trade balance Zuma said: “As we all agree this trade pattern is unsustainable in the long term. Africa’s past economic experience with Europe dictates a need for caution when entering partnerships with other economies.”
Zuma delivered his speech minutes after Hu promised $20bn in loans over three years and said the two sides had “high hopes” for the growth of their relationship.
The loans offered were double the amount China pledged for the previous three-year period in 2009. The pledge is likely to improve China’s relations with Africa, a supplier of oil and raw materials to the most populous country and second-largest economy. But the loans could add to discomfort in the West, which criticises China for overlooking human rights abuses in its business with Africa.
China’s president brushed off such concerns in his speech before African leaders at the Great Hall of the People.
“China wholeheartedly and sincerely supports African countries to choose their own development path, and will… sincerely support them to raise their development ability,” Hu said. “Facts have shown that the new type of China-Africa strategic partnership is the result of continuous growth of the traditional friendship between the two sides.”
The new loans would support infrastructure, agriculture, manufacturing and the development of small businesses in Africa.
China’s two-way trade with Africa hit $166bn last year, three times the 2006 amount, Hu said. In December, Fitch Ratings estimated that China’s Export-Import Bank lent $67bn to sub-Saharan Africa between 2001 and 2010, overtaking World Bank lending of $55bn.
Hu said China would offer 18 000 government scholarships and send 1 500 medical staff to the continent.
Chinese parastatals in Africa face criticism for using imported labour to build government-financed projects like roads and hospitals, while pumping out raw resources and processing them in China.
“A number of us are thinking we need to move into more value addition,” South African Trade and Industry Minister Rob Davies said. “We need to export mineral products in a more processed form… We need to bite this bullet very seriously.”
In the past decade, African exports to China rose to $93bn from $6bn. Industrial and Commercial Bank of China has invested $7bn in projects across the continent. – Bloomberg and Reuters