African fund to focus on Chinese enterprises
27 June 2007
A much-publicized US$5 billion China-Africa Development Fund, which is supposed to be an aid fund, will invest exclusively in Chinese enterprises and their projects in Africa, the Financial Times reported. The State-owned China Development Bank was expected to launch the first
phase of the fund, worth US$1 billion, this week. This phase would
focus on Chinese businesses whose "trade and economic activities have
reached or will reach Africa" and projects in the continent invested in
by Chinese enterprises. The CDB said investments will focus on projects
related to natural resources, infrastructure, agriculture,
manufacturing and industrial parks. President Hu Jintao announced plans
for the fund last year during the China-Africa Co-operation Summit in
Beijing. China currently requires that African countries give Chinese companies contracts for most infrastructure construction and other projects in return for aid from Beijing. The country's policy of tying aid to purchasing goods and services from the donor country has been criticized as both wasteful and inefficient. Most other countries are abandoning this policy.