China-Africa relations: Beijing’s financial aid leans towards grants, away from cheap loans, white paper shows

Proportion of aid in grant form increases to 47 per cent in 2013-18 from 36 per cent in 2010-12, government report shows

While interest-free loans still exist, they are ‘mainly as a gesture to show that China is doing something about debt relief’, director of China Africa Research Initiative says

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China provided US$200 million to pay for the African Union headquarters in Addis Ababa. Photo: AFP

Published: 6:00am, 17 Jan 2021Updated: 10:13pm, 17 Jan 2021

From Zimbabwe’s US$140 million six-storey parliament building to the US$200 million African Union headquarters in Addis Ababa, grandiose symbols of China’s financial aid are popping up across Africa.

As well as paying for soccer stadiums and government buildings in the Republic of Congo, Lesotho, Mozambique and Sierra Leone, Beijing has funded presidential palaces to Togo, Sudan, Burundi and Guinea-Bissau among others through grants and interest-free loans.

China says the projects are intended to increase cultural and sporting activities in the countries and enrich cultural life, but analysts say the spending reflects a strategic shift in Beijing’s foreign aid policy – by providing grants rather than loans to countries already mired in debt.

A new white paper released by the State Council Information Office in Beijing provides a glimpse into Chinese aid to Africa and other emerging economies.

According to the report, titled “China’s International Development Cooperation in the New Era”, Beijing has “steadily increased the scale and further expanded the scope of its foreign aid”.

The last such paper was published in 2014 and covered the 2010-12 period.

The change in stance began with the creation of the China International Development Cooperation Agency in 2018.