China to provide USD 20 billion loans for Arab states

Vastavam web: China will provide Arab states with USD 20 billion in loans for economic development, President Xi Jinping told top Arab officials today, as Beijing seeks to build its influence in the Middle East and Africa. The money will be earmarked for “projects that will produce good employment opportunities and positive social impact in Arab States that have reconstruction needs,” said Xi, without providing further details. It is part of a special Chinese programme for “economic reconstruction” and “industrial revitalisation,” Xi told participants at a China-Arab States forum in Beijing’s Great Hall of the People. Since taking office, Xi has overseen a concerted effort to expand Chinese influence in the Middle East and Africa, including the construction of the country’s first military base in Arab League state Djibouti.

China has already provided vast sums to Arab countries, with Djibouti alone owing some USD 1.3 billion, according to estimates from the US-based China Africa Research Initiative. The financial largesse has raised concerns both at home and abroad over the vulnerability of poor nations to such massive debt. Last year Sri Lanka was forced to hand over majority control of its Hambantota port to China after being unable to repay its loans. The Arab states’ position at the centre of the ancient trade route makes them “natural partners” in China’s new undertaking, he said, adding he expected the summit would end with an agreement on cooperation on the initiative.

“Chinese and Arab peoples, though far apart in distance, are as close as family,” he said, describing a romanticised history of trade along the Silk Road. The project, which has already financed ports, roads and railways across the globe, has spurred both interest and anxiety in many countries, with some seeing it as an example of Chinese expansionism.