A photographer at the site of the Dialogue between Executives of Chinese Financial Institutions and African Coordinators of the Implementation of the Follow-up Actions of the Beijing Summit of FOCAC in Beijing on Monday. (Photo: Chu Daye/GT)
Lending boosts local employment, foreign trade
Practical, customized and innovative forms of financing are spearheading economic cooperation between China and Africa, executives and officials said at a seminar in Beijing on Monday.
Chinese policy banks said that they have taken a practical approach to meet the needs of Africa at the Dialogue between Executives of Chinese Financial Institutions and African Coordinators of the Implementation of the Follow-up Actions of the Beijing Summit of the Forum on China-Africa Cooperation (FOCAC).
The meeting at the ministerial level was attended by 300 delegates from 53 African member countries of FOCAC and the African Union.
It was held at the best time in history for China-Africa economic cooperation but also at a time when trade protectionism and unilateralism has affected international investment and financing cooperation.
Zhang Xuguang, executive vice president of China Development Bank (CDB), said the state-owned policy bank has already lent nearly one-quarter of a $10 billion development financing package announced by China in 2018.
At the Beijing summit of FOCAC, China pledged to set up a $10 billion development financing fund and encourage Chinese companies to invest no less than $10 billion in Africa the next three years.
The bank has also focused on helping small-and medium-sized enterprises (SMEs) in Africa, lending a total of $2 billion so far to help generate 200,000 local jobs and boost trade by $4.8 billion.
The CDB said that it has combined long-term credit, special loans for SMEs and fund investment to support the development of African nations. It has also tapped its planning expertise by working with African countries on planning consultations that have led to five reports so far.
"The CDB is as big as the World Bank," Baba Ahmad Jidda, ambassador of Nigeria to China, told the Global Times on Monday. "We believe our relationship with China is going to improve every day."
The ambassador of Africa's largest economy emphasized the importance of China's concessional loans, which have lower interest rates and longer maturity time, and offer African countries more affordable financing for their major projects.
In 2018, China's trade with Africa reached $204.2 billion, up 20 percent year-on-year, data from the Ministry of Commerce showed. China remained Africa's largest trading partner for the 10th consecutive year.
Hu Changmiao, board secretary of state-owned China Construction Bank (CCB), told the seminar that a number of cutting-edge financial technologies can be deployed to boost risk management capacity and therefore aid China-Africa cooperation.
Blockchain, big data and artificial intelligence can help foster risk management, Hu said.
CCB has shown its ambition in the field by becoming the first major state-owned bank to set up a wholly owned subsidiary dealing with financial technology in April 2018 with a 3,000-strong team.
The CCB platform, empowered by cutting-edge technologies, could help creditors improve their risk management when dealing with loans to Chinese companies doing businesses in Africa or doing Africa-related business including exports, the Global Times learned.
