China offers $10B in loans to Africa

SHARM EL-SHEIK, Egypt, Nov. 8 (UPI) -- China, already enjoying extensive reach into Africa's oil and other resources, has widened its influence by pledging $10 billion in easy loans to its nations.

Chinese Premier Wen Jiabao made the announcement in an address to the Forum on China-Africa Cooperation summit in the Egyptian resort city of Sharm el-Sheik.

The low-interest, three-year loan pledge doubles China's similar offer of $5 billion made in 2006, The Washington Post reported. Representatives from 49 African nations attended the meeting.

"There have been allegations for a long time that China has come to Africa to plunder its resources and practice neo-colonialism. This allegation, in my view, is totally untenable," Wen told a news conference.

Wen, who said the meeting represented "a new stage of development in relations with Africa," pledged to establish a $1 billion loan program for small and medium-size businesses and to write off the balance of debt remaining from some interest-free loans to less-developed African nations, The New York Times said.

China's low-interest loans in the past have come with the stipulation that African nations receiving them use the money on Chinese-made goods or on projects built by Chinese companies, the Times reported.

Beijing's exploitation of African oil and mineral resources and its exports of its low-cost goods to Africa have raised concerns among African scholars. The arrangement has helped two-way trade grow about 10 times in the past eight years to about $107 billion in 2008.

The Washington Post reported the new loans are expected to maintain the trade growth trend.