China Launches $1B Africa Fund

( [email protected] ) Jun 26, 2007 05:09 AM EDT

BEIJING (AP) -- China launched a $1 billion fund Tuesday to finance trade and investment by Chinese companies in Africa as part of efforts to nurture commercial ties with the resource-rich continent.

The fund is part of Chinese aid and loans to Africa promised by President Hu Jintao at a November meeting with dozens of African leaders in Beijing.

China has been promoting itself as a partner for Africa's development as it tries to secure oil and other resources for its booming economy and new markets for its exports. But Beijing faces complaints that it is treating Africa as a colony and that it supports oppressive regimes, such as Sudan and Zimbabwe.

The new fund is to be financed by the government's China Development Bank, which said the fund eventually will expand to $5 billion.

It will "support Chinese enterprises in developing cooperation with Africa and in investing in Africa," the bank said in a statement.

The fund will target projects in infrastructure, farming, basic industries and manufacturing, it said.

Activists often criticize such "tied aid" linked to donor nations' companies as inefficient.

Many African leaders have welcomed China's growing involvement and the potential for increased trade and aid.

Chinese state oil companies have expanded aggressively, signing deals in Nigeria, Angola and Sudan. Chinese manufacturers are trying to expand exports to African markets.

But China's commercial presence has prompted complaints by some Africans, who say growing Chinese competition is threatening jobs in textiles and other industries.

Human rights activists have criticized China for helping to shield Sudan, where it has large oil investments, from pressure over its handling of its ravaged Darfur region.

At a Darfur conference this week in Paris, the Chinese envoy argued against imposing sanctions on Sudan and criticized calls for a boycott of the 2008 Beijing Olympics over the issue.

Beijing has appointed a Darfur special envoy and defended its efforts to make peace in the region.

The November meeting in Beijing brought together heads of state from 35 of the 53 African nations and top officials from 13 others -- one of the largest such gatherings in history.

Hu kept up the rapid pace of high-level contacts this year, making an eight-nation tour of Africa in January. Other Chinese leaders also have visited the continent.