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China’s Resources-for-Infrastructure Financing Mechanism is Evolving Into the “Sino-Africa Swap”

Kenyan lawmakers are hoping China will consider a debt repayment extension to service the remaining $3.3 billion that was borrowed to build the Standard Gauge Railway. Simon Mania/AFP

Decades before China embarked on countless Resource-for-Infrastructure deals in Africa, Japan pioneered the model in China as far back as the 1970s. The rapidly industrializing Japanese economy needed oil Chinese oil, minerals and other raw materials and China, one of the poorest countries at the time and economically hobbled from failed Maoist policies, couldn’t afford to build basic infrastructure.

Fast forward to the early 2000s and the Chinese bring that same model to Angola where it did a $2 billion oil for infrastructure deal that at the time was considered groundbreaking both for its size and its ability to bring vast amounts of capital to build badly-needed roads, bridges and other infrastructure in Africa.

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