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UPDATED: November 16, 2009 NO. 46 N0VEMBER 19, 2009
Partners in Need
African countries increasingly view China as a major stakeholder in their growth and poverty reduction
By YAN WEI
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What makes China attractive as a development partner, according to these analysts, is that African countries believe it understands Africa's development needs. In addition, unlike Western donors, it does not set high governance standards, which the authors think could hinder aid delivery—thus prolonging the implementation of projects, while undermining development.

The rationale behind this belief is that China is a developing country and faces similar challenges to other developing countries including African countries, they noted. Indeed, recipient countries wish to learn lessons from China's success to address poverty and realize national development plans.

China offers both monetary and non-monetary forms of development assistance to Africa. It provides a mix of loans with technical assistance, debt relief, training programs, tariff reductions and interest-free loans.

At the same time, Manji and Naidu pointed out that China's developmental assistance represents only a negligible amount compared to that of OECD and multilateral donors. Western donors remain Africa's main development partners with their historical commitment to and huge foreign direct investment in Africa.

But China is rapidly getting involved as a "new stakeholder" too. Bilateral trade between China and Africa soared from $10.6 billion in 2000 to more than $70 billion in 2007 and $107 billion in 2008.

In recent years, the contribution of China-Africa trade to African economic growth has reached some 20 percent, according to He Wenping, Director of the African Studies Section of the Institute of West Asian and African Studies at the Chinese Academy of Social Sciences.

Statistics of the World Bank show China's total financial commitments to African infrastructure construction alone rose from $1 billion per year in 2001-03 to around $1.5 billion per year in 2004-05. The number reached at least $7 billion in 2006 before trailing back to $4.5 billion in 2007.

To date, China has completed more than 800 social and economic projects in different African countries, the majority of which have been infrastructure projects benefiting local African communities.

China's aid policy toward Africa displays a number of distinctive characteristics, He said. Apart from providing assistance with no strings attached, it emphasizes bilateral instead of multilateral aid projects while placing the focus on infrastructure construction rather than "soft" issues such as research and capacity building, she added.

Taking the driver's seat

China's growing involvement has prompted other countries, emerging economies and traditional donors alike, to show greater concern about Africa's future, He said.

Shortly after the Beijing Summit of the Forum on China-Africa Cooperation (FOCAC) in November 2006, South Korea convened its first summit with Africa in Seoul. In all, six African heads of state and more than 20 African ministers participated.

The European Union (EU) held its second summit with African countries in December 2007 in Lisbon, Portugal, seven years after the first EU-Africa summit in Egypt. This was followed by the first India-Africa summit in April 2008 and the fourth Japan-Africa summit a month later.

"At every summit, the hosts announced a package of economic assistance programs with Africa," He said. "Their efforts have improved the external environment and offered good opportunities for African development."

As Africa's new donor, China has sparked a debate among Western countries, noted Manji and Naidu. Despite their worries that it may pose a challenge to the status quo, China's mode of assistance delivery broadly correlates with the OECD practice, they said.

Meanwhile, bearing in mind its historical links with Africa dating back to the 1950s, China has recently given a more pragmatic dimension to its development assistance to Africa by underscoring its resource security and domestic development, they added.

In their view, the FOCAC has institutionalized China's role as a development partner of Africa—a sharp contrast with the "Western donors' talk shop" at the meetings of the Group of Eight industrialized nations.

Since it proposed the FOCAC and hosted its first ministerial conference in 2000, China has provided assistance to Africa within the FOCAC framework. At its fourth ministerial conference in Sharm el-Sheikh, Egypt, on November 8-9, China unveiled new initiatives including canceling African countries' debts, expanding China-Africa trade and helping train African professionals.

In this context, how to harmonize the aid programs between traditional donors and new donors and improve aid effectiveness constitutes a major challenge. "While China needs to make its foreign aid more transparent and try to cooperate better with other donors, OECD donors should refrain from politicizing China's engagement in Africa," He said.

"Perhaps, 'old donors' could learn something from 'new donors,'" she said. She explained that China, which was and still is an aid recipient country, has gained much experience in utilizing foreign assistance over the past three decades.

Now as an aid provider in its own right, it can use its experience to help forge links between traditional donors and new donors, and between donors and recipients, she said.

China's progress has inspired African countries to "look east" in their quest for an effective model of development, she said. However, while modeling upon China, they must be able to find a development mode that best suits their national conditions.

Likewise, foreign donors should always take into account the actual needs of recipient countries, she said.

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