The Development Finance and Sino-African Cooperation Forum opened on Sunday, May 13, 2007 at the Shanghai International Convention Center. Co-hosted by the African Development Bank Group and People's Bank of China, the forum aims to push forward communication and understanding between development financing institutions in China and African countries.

According to Xiang Junbo, deputy governor of the People's Bank of China and director of its Shanghai headquarters, the unique role of finance in supporting less-developed areas in China and Africa is crucial for economic globalization.

For example, the China Development Bank and People's Bank of China provide poverty reduction interest subsidized loans and agriculture supportive lending to these areas. Pilot micro credit companies also have been established to reverse the drain of financial institutions, and local governments have made efforts to build a solid judicial environment to protect creditors' rights.

As a development financial institution of the Chinese government, the China Development Bank (CDB) has been actively conducting international cooperation and providing financing services to African governmental departments, financial institutions and enterprises, said Gao Jian, vice governor of CDB.

During the Forum of China-Africa Cooperation (FOCAC) held in last November, CDB signed five agreements and memoranda with African partners. By the end of March this year, the standing of CDB in Africa amounted to US$1 billion. It has also been following the development of 30 projects in African countries, involving US$3 billion.

As the main initiator of the China-Africa Development Fund, the CDB has drafted the Plan on the Establishment of China-Africa Development Fund, which is one of China's eight steps for aid to Africa proposed by President Hu Jintao at the FOCAC. According to the plan, the fund will start from US$1 billion and eventually amount to US$5 billion by three phases. The fund's business scope includes equity and quasi-equity investments, fund investments, investment management, and consulting services. It supports African countries' agriculture, manufacture, energy sector, transportation, telecommunication, urban infrastructure, resource exploration and the businesses of Chinese enterprises in Africa.

The Sino-African financial cooperation has also attracted attention from multi-national corporations. A senior manager from Alcatel Shanghai Bell said the financial assistance from the Chinese government and financial institutions to African countries have contributed a lot to his company's exportation to Africa. He hopes to enhance communication with African countries on financing channels and cooperation through the forum and the coming annual meeting of the African Development Bank.

According to Vice Minister of Commerce Wei Jianguo, the Sino-African trade volume totaled US$5.5 billion with China standing as Africa's third largest trading partner in 2006. China had invested a total of US$11.7 billion in Africa with focus being agricultural development, processing and manufacturing, transportation, telecommunications, water conservancy, power, and other infrastructure sectors.

(China.org.cn by staff reporter Li Shen May 14, 2007)