China shifting African aid from loans to aquaculture training

Published on
December 24, 2019

China will train 10,000 African experts in agriculture and aquaculture over the next three years, a summit of African officials has been told.

Meanwhile there’s been a ramp up in lending by China’s policy lender to African merchants buying Chinese seafood and other goods.

Minsters from across Africa recently gathered in Sanya, in southern China, under the auspices of the Forum on China Africa Cooperation (FOCAC), the entity set up by Beijing to organize government-to-government engagement with Africa. FOCAC also administers the China-Africa Development Fund, through which low-interest loans are channeled to Africa. China is seeking to grow exports to Africa and other countries under the Belt and Road Initiative (BRI) as it looks to replace sales momentum lost in the Sino-U.S. trade war. As part of the initiative, the China Development Bank, one of the country’s lenders backing the nation’s strategic goals, has stepped up lending to buyers of Chinese exports in BRI countries.

According to official data, shipments to BRI countries have grown in recent years, though total trade with any individual nation is much smaller than China’s exports to the United States. China’s trade with BRI nations totaled USD 945 billion (EUR 824.2 billion) in the first 10 months of this year, up 9.5 percent, whereas overall Sino-U.S. trade fell 10.3 percent in value over the same period to USD 390.9 billion (EUR 352.5 billion).

China’s trade with the U.S. is worth 12 percent of its overall trade, whereas trade with BRI countries is 29 percent of Chinese trade. Given the BRI covers Russia as well as huge swathes of Africa and Eastern Europe and Asia, those figures show the U.S. remains a huge market for China and one that won’t be easily replaced.

As part of a broader Chinese government push this year to increase lending to its private sector, the CDB, which had CNY 11.68 trillion (USD 1.7 trillion, EUR 1.5 trillion) outstanding in loans as of the end of 2018, has been tasked by government with helping restore confidence to China’s export sector. Seafood exporters with export licenses have been issued with circulars from local government offices alerting them to the availability of CDB “buyer’s credit” packages to help seal overseas deals. Circulars have also been issued by the regional offices of China’s Commerce Ministry in the key seafood-exporting regions of Fujian and Shandong.

However, there has however been a notable cooling in recent years in Chinese lending to Africa, with worries in Beijing about repayments. Assistance in kind, such as training, meanwhile, has become a major tool for increasing Chinese access to African markets and to cooperation partners in aquaculture and farming projects. Among those attending the Sanya conference were Agriculture Minister Han Changfu and Yu Kangzhen, the vice minister with oversight of fisheries. Both men have explicitly stated that China needs to increase seafood production abroad through “international cooperation.”

Photo courtesy of Wikipedia and China Ministry of Agriculture

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