Jeff Horwich: China held a forum with African leaders today. It offered $20 billion in loans to countries throughout the continent over the next three years. That essentially doubles China’s previous aid to Africa, and it strengthens a relationship that has attracted a lot of criticism from the West.
Marketplace China Bureau Chief Rob Schmitz is with me from Shanghai. Hello, Rob.
Rob Schmitz: Hi, Jeff.
Horwich: First, a little background. China’s been putting money into Africa for a quite while now, right?
Schmitz: Yeah, ten years ago, African exports to China were worth $5 billion. Today they’re worth $93 billion, and U.S. exports to China are at $104 billion, so the Africa-China relationship is a really big one. A lot of people compare it to the early relationship between the U.S. and the Middle East which was, of course, based on oil. But what China’s getting out of this relationship is a wider range of resources: oil, copper, uranium, you name it. Africa’s resally got it all. If China wants to continue on this incredible economic growth trajectory that it’s been on, it really has to have these resources. Today, Chinese president Hu Jintao reminded African leaders of the importance of this relationship for both sides.
President Hu Jintao: The creation of this forum fulfills the demands of the times. It reflects the wishes of the Chinese and African people who are seeking world peace, development, and cooperation.
Horwich: So, world peace, he says, not that we can’t take him at his word, but doesn’t China get a lot of flak for working closely with countries that have rotten records on human rights?
Schmitz: That’s right, they do. And the U.S., of course, has a history of doing this, too. But China’s received a firestorm of bad press for its cozy relationship with — among others — the government in Sudan, whose president is wanted by the International Criminal Court for genocide and crimes against humanity. So those who are concerned with China’s continued investment in Africa point to its financial support for a long list of corrupt leaders and that support that is helping these leaders stay in power.
Horwich: When China gives foreign aid to Africa, do they do it in a different way or with different intentions than, say, a Western country like the U.S.?
Schmitz: Yes, it is a little different and there’s been a lot of debate about this. Of course, much of the aid that the U.S. sends to Africa comes in the form of poverty alleviation — things like feeding starving children. China tends to focus instead on things like building bridges, buildings and roads — basically copying its own development formula for the past few decades and pasting it onto Africa. And there’s been a lot of debate about which type of assistance works better for Africans.
Horwich: Marketplace’s Rob Schmitz from Shanghai, thanks a lot.
Schmitz: Thanks for having me.
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