China and Africa are the most talked about nations, China due to its commanding position in the business world, and Africa due to its desperate need to enhance its pace of development given its rich natural resources. A country as well endowed as Africa must achieve a far higher level of growth and development than it has till now. World attention has turned to these issues fairly recently and many of the rich nations, including China have taken it upon themselves to ensure aid and technical support to Africa in return for raw materials that Chinese industries crucially need.
Thinking that its current level of investments are not substantial enough, China has decided to find more investment opportunities in the continent by additionally providing US $ 2 billion for its China-Africa Development Fund. The fund is presently funding 20 projects with investments of $400 million in the last one and a half years. The new investments are meant to be in areas where other Western nations have withdrawn due to the global financial crisis, leaving a gaping hole, which China will gladly fill.
The China-Africa Development Fund was started in June 2007, and its South African office was inaugurated in Johannesburg on 16th March 2009. The state run equity fund feels this office will help give a big boost to Sino-African cooperation. The fund is providing $ 3 billion as preferential loans to African nations and $ 2 billion in preferential buyers’ credits to the continent, besides waiving off bad debts.
South Africa has also, in return, invested heavily in China. Its brewing major SABMiller has opened 50 breweries in China, while its fuel manufacturer Sasol has set up collaboration with the Chinese coal company Shenhua, to convert coal to liquids in Ningxia Hui and Shaanxi provinces of China. Other South African investments have been in the field of boat making, media, restaurants, mining, financial services and banking.
The Fund will soon be opening offices in other African countries to ensure uniform acceleration and progress in Sino African trade. Its interests are mainly in the fields of mining, agriculture, industrial parks, infrastructure and manufacturing and further exploration of natural resources.
Source : China Africa
Tags: Africa, China, Development Fund, South Africa
