China launches $1bn Africa fund
27 June 2007
China has launched a China-Africa development fund to the value of US$1-billion to encourage, finance and support Chinese companies in their investments across the African continent.
According to the Xinhua news agency, draft plans unveiled this week by the China Development Bank, the main initiator of the fund, indicate that the fund will gradually be raised to $3-billion and then to $5-billion.
The creation of the fund was one of eight mechanisms for assisting African unveiled by Chinese President Hu Jintao at the Forum on Africa-China Cooperation held in Beijing in November.
With the Chinese economy expanding at a rapid pace, the world's most populous country is increasingly looking to Africa to satisfy its demand for natural resources.
Xinhua describes the business scope of the fund as including equity and quasi-equity investments, fund investments, fund management, investment management and consulting services.
These services will be used to
support various sectors in African economies, such as agriculture, manufacturing, energy, transportation, telecommunications, urban infrastructure, resource exploration and the development of Chinese enterprises in Africa.
"Improving financial collaboration between Asia and Africa is crucial for both parties in a globalised world," Chinese central bank governor Zhou Xiaochuan told Xinhua.
"China is willing to play a more active role in promoting the cooperation."
According to Third World Networt, Chinese Ministry of Commerce statistics show two-way trade between China and Africa having surged from about US$4-billion in 1995 to $40-billion in 2005.
During the Forum on Africa China Cooperation, Chinese Premier Wen Jiabao proposed that trade volumes between the two continents should increase to $100-billion by 2010.
Such is China Development Bank's interest in the continent that it plans to send 18 working groups to Africa this year to identify opportunities for Chinese
involvement and investment.