China's lending to Kenya hits $750m

China has overtaken France as the second largest lender to Kenya after Japan, reflecting Beijing's increasing importance as a source of development funds for the country. Data from the Central Bank of Kenya shows that Kenya's debt to Beijing rose by 50 per cent to about $750 million in the year ended June 2013, compared with $500 million in fiscal year 2011-2012.




Chinese “aid” is a lightning rod for criticism. Policy-makers, journalists, and public intellectuals claim that Beijing uses its largesse to cement alliances with political leaders, secure access to natural resources, and create exclusive commercial opportunities for Chinese firms—all at the expense of citizens living in developing countries. We argue that much of the controversy about Chinese “aid” stems from a failure to distinguish between China's Official Development Assistance (ODA) and more commercially oriented sources and types of state financing. Using a new database on China's official financing commitments to Africa from 2000 to 2013, we find that the allocation of Chinese ODA is driven primarily by foreign policy considerations, while economic interests better explain the distribution of less concessional flows. These results highlight the need for better measures of an increasingly diverse set of non-Western financial activities.

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