A Chinese economic expert, Professor Zheng Xinye, has explained that the Chinese loans to some African countries are not meant to become debt traps. Prof Zheng, who was speaking during a presentation on China’s Economy for African and South American journalists on a media workshop at the Communication University of China (CUC) in Beijng, said the loans are ways to improve relations following a shared history of mutual cooperation.
The don, who is a Professor of Economics at the Renmi University, Beijing, said several African countries, who couldn’t meet their obligations, have received debt pardons, adding that “Chinese people feel bad about the debt exemptions.” He debunked allegations of dumping of sub-standard goods in Africa, explaining that as relations grow, China was no longer interested in short term investments but long-term Foreign Direct Investment (FDI) flows, which explains the increasing investments in factories and manufacturing plants in Africa.
He however expressed support for a more equitable trade partnership, adding “We have to invest in African countries, but we shouldn’t exploit so much of the minerals.”
The don explained that although China has recorded rapid economic growth in the past three decades through its massive acquisition of capital, skilled labour and technology, leading to it becoming the second largest economy in the world behind the USA, the country is still a developing country with problems of poverty, inequality, and pollution.
“One of the ways the Chinese CPC is addressing that is by getting many rural women to work in factories and subsidizing their salaries. That way we empower them to help their families,” he said.