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News > World

Rwanda Seeks to Grow Links as China Looks to Curb Spending

  • Government encourages investment in projects related to the Belt and Road project.

    Government encourages investment in projects related to the Belt and Road project. | Photo: Reuters FILE

Published 21 August 2017

“China and Rwanda enjoy a long history of friendship and fruitful cooperation in various fields.” The Asian superpower is also looking to plug expenditure. 

On Sunday, Rwanda President Paul Kagame said his country is open to deepening friendly cooperation with China.

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Kagame made the remarks during an exchange with a special envoy of Chinese President Xi Jinping, Liu Xiaofeng, in the capital. The envoy was in attendance at the Rwandan head of state's inauguration ceremony, where he was being sworn in for a third term on Friday.

Kagame expressed a desire to fortify bonds “in all areas” as well as push for greater bilateral relations between the two countries.

He pointed out that “China and Rwanda enjoy a long history of friendship and fruitful cooperation in various fields” and added that “China has been offering support to Rwanda and other African nations for a long time and is a sincere partner for Africa's development.”

Liu, who is also the vice chairman of the National Committee of the Chinese People's Political Consultative Conference, explained that since the establishment of diplomatic relations 46 years ago, bilateral relations between the two countries have been developing steadily and healthily.

“China is ready to join hands with Rwanda to further enhance political mutual trust, expand economic and trade cooperation, consolidate friendship of the two peoples,” said Liu. “China is also willing to turn friendship between the two countries into real results that benefit the two peoples and realize mutual benefits and mutual development,” he said.

China moves to curb overseas acquisitions

But, contrastingly, the Chinese government is also making moves to decrease certain foreign investments by local firms. The Asian superpower is looking to plug these expenditures, which has – in the past – included areas such as hotels, cinemas, the entertainment industry, real estate and sports clubs.

Excessive global purchases involving Chinese firms and business tycoons include acquiring stakes in Legendary Entertainment – producer of Jurassic World and Warcraft films, London's famous Cheesegrater building, and English football clubs Southhampton and Aston Villa.

The Chinese government had previously flagged hotels as an area of concern, reportedly asked the insurance group Anbang to sell the swanky Waldorf Astoria in New York.

Earlier this year, the Wanda Group caved to pressure when it halted the purchase of Dick Clark Productions for $1bn (£780m).

The state council, on Friday, announced the impending restrictions, stating “There are great opportunities for our nation’s companies to embark on foreign investment, but they also face numerous risks and challenges.”

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The document also stated that, through guidance, the government hopes to promote the “rational, orderly and healthy development of foreign investment while effectively guarding against risks.”

Outright bans on financing enterprises related to gambling and the sex industry are being reviewed.

The document encourages companies to invest in projects related to the Belt and Road project, President Xi Jinping’s signature foreign policy initiative – which aims to link China with other parts of Asia and eastern Europe through multibillion-dollar investments in ports, highways, railways, power plants and other infrastructure.

This week, in a strongly worded release, the International Monetary Fund described China’s credit-fuelled economic strategy as dangerous, warning that the country’s approach could lead to severe financial fallout.

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