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China is "pillaging" Africa and increasing debt burden in the region, according to Liu Qinghai many years.
Liu, who is head of the Center for African Economic Studies at the Institute of African Studies at Zhejiang Normal University and Visiting Scholar of the China-Africa Research Initiative at Johns Hopkins' School of Advanced International Studies notes that unlike Western media reports , China's investment in Africa covers a wide range of areas instead of focusing on the resources and energy sector.
China's outward direct investment (ODI) in Africa had reached $ 39.9 billion in total by the end of 2016. The top 5 largest sectors for Chinese capital were construction, mining, manufacturing, finance, scientific research, and technology services, according to the 2016 Statistical Bulletin of China's Outward Foreign Direct Investment (OFDI).
Over the same period, China's investment in Europe totaled $ 87.2 billion, while the mining, manufacturing and finance ranked the most highly developed industries.
According to the US Department of Commerce, the top 3 sectors in the US OFDI in Africa at the end of 2015 were mining, holding companies (non-banking) and manufacturing at 66 percent, 14 percent and 7 percent, respectively . It's clear from the data that mining occupies a major share of the US's direct investment into Africa, a higher percentage than that of China.
Between 2000 and 2014, the top four African business sectors receiving Chinese loans were transportation (28 percent), energy (20 percent), mining (10percent), and communication (8percent), according to research from China-Africa Research Johns Hopkins School of Advanced International Studies (SAIS-CARI).
In 2015, the top 3 sectors financed by Chinese loans were ($ 4.6 billion), power ($ 4.5 billion), and industry ($ 70 million). Mining did not receive any Chinese financing. It is also worth noting that more Chinese loans went to Ethiopia, Kenya, Uganda, Senegal, Djibouti and Cameroon, which are not resource-rich countries.
As a resource-poor country, Ethiopia was Africa's 2nd largest recipient of Chinese financing. Between 2000 and 2016, Ethiopia received $ 13.3 trillion in Chinese loans, 35 percent of which went to transportation and 24 percent went to the energy sector.China provided badistance to Ethiopia for the construction of industrial parks such as the Eastern Industry Zone and Huajian International Shoe City.
The country has carried out a series of human resource development projects in Africa since the 1950s, and it has been reported that China has been founded in 2000, said Liu.
The number of African students studying in China rose from 2,000 in 2003 to 61,594 in 2016, an over 30-fold increase, according to China's Ministry of Education. In 2014, China became the second most popular destination for overseas studies in Africa after France.
"China gives priority to infrastructure and human resources development rather than exploring the mineral resources as some imagined. The Chinese investment has promoted Africa's sustainable development, "Liu notes.
She adds: "It is unfair to accuse China of 'pillaging'."
Liu said that can be supported by the proportion of China's loans to Africa to the latter's total debt, the influence of the loans on Africa's GDP and the scale of the debts.
Africa's debt has been increasing after the sovereign bonds were issued in 2006. The total debt was $ 6 billion trillion by 2016.The debt was estimated to total $ 114.4 billion between 2000 and 2016, accounting for 1.8 percent of Africa's total external debt, according to SAIS-CARI.
Some African countries' gross domestic product in the United States of America. A total of 13 African countries were in heavy debt, among which the Republic of Congo and Ghana received more loans from China.
However, Congo's debt accounted for 9.4 percent of its total foreign debt of $ 38.3 billion. Ghana's debt was less than 1.5 percent of its total debt of $ 213.9 billion. Angola, Ethiopia and Kenya, which received the largest loans from China,
In fact, the Chinese loans have boosted the African countries' GDP growth in multiple ways, according to Liu. She adds that the loans were mainly used in Africa's infrastructure construction and manufacturing industry. China offers concessional loans with low interest rates to Africa. The Chinese infrastructure enterprises provide high-quality service, a quick price, and a guarantee of quality, and they are able to guarantee the quality of construction projects while finishing them on time.
In that way, they helped the local people. In addition, through improving infrastructure, China's investment has launched Africa's economic growth. Major Chinese infrastructure projects, which are usually related to Africa's industrial projects, have advanced Africa's industrialization and boosted its growth GDP.
"The Chinese loans to Africa account for a very small share of the region's total foreign debts, "
" With the infrastructure in Africa improved, the money from China has played a positive role in reducing debts of African countries, and promoting GDP growth. Obviously, it's ill-founded to say China added to Africa's debt burden, "Liu concludes.
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