Africa fund meant to boost ties

BEIJING – China yesterday formally launched a fund to encourage Chinese firms to invest in Africa, claiming its aim was not to make profit but to boost a “new type of strategic partnership” with the continent.

“The China-Africa Development Fund will aim mainly at supporting the strategic cooperation in the political, economic and diplomatic fields,” Gao Jian, chairman of the fund, told reporters at the fund’s opening ceremony. “Unlike other profit-making organisations which seek to maximise profits, the objective of the fund is …to avoid losses and earn just enough profit to enable the running of the fund.”But he also noted that Africa could be a big market for Chinese products that are no longer popular at home, as the domestic processing industry is experiencing overcapacity while moving up towards higher-value goods.”The African economy is still in the early phases of development.It needs the products (from China) and they are cheap,” said Gao, who is also the deputy governor of China Development Bank, one of the country’s three policy banks.The fund has got US$1 billion from the China Development Bank, with its size seen to reach US$5 billion eventually.It is one of the commitments made by Chinese President Hu Jintao in November at the China-Africa summit that aimed at deepening ties with the continent.Some Western critics have accused China of worsening repression and human rights abuses in Africa through support of countries such as Sudan and Zimbabwe in what they see as a cynical drive to increase access to African oil and other resources.But Gao repeatedly said the forming of the fund was not prompted by the Chinese appetite for energy.”Some people said China was implementing new colonialism and seizing others’ resources.They’ve got it completely wrong,” he said.”Resources are not the purpose of our presence in Africa.”He added the fund would focus on industries that would make it easier for Africa to develop, such as agriculture, electric power, road and water drainage system.Nampa-AFP”Unlike other profit-making organisations which seek to maximise profits, the objective of the fund is …to avoid losses and earn just enough profit to enable the running of the fund.”But he also noted that Africa could be a big market for Chinese products that are no longer popular at home, as the domestic processing industry is experiencing overcapacity while moving up towards higher-value goods.”The African economy is still in the early phases of development.It needs the products (from China) and they are cheap,” said Gao, who is also the deputy governor of China Development Bank, one of the country’s three policy banks.The fund has got US$1 billion from the China Development Bank, with its size seen to reach US$5 billion eventually.It is one of the commitments made by Chinese President Hu Jintao in November at the China-Africa summit that aimed at deepening ties with the continent.Some Western critics have accused China of worsening repression and human rights abuses in Africa through support of countries such as Sudan and Zimbabwe in what they see as a cynical drive to increase access to African oil and other resources.But Gao repeatedly said the forming of the fund was not prompted by the Chinese appetite for energy.”Some people said China was implementing new colonialism and seizing others’ resources.They’ve got it completely wrong,” he said.”Resources are not the purpose of our presence in Africa.”He added the fund would focus on industries that would make it easier for Africa to develop, such as agriculture, electric power, road and water drainage system.Nampa-AFP