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UPDATE 3-China's Hu visits Cameroon, pledges $100 million

(Adds comments from Chinese President, paragraphs 3-4)

YAOUNDE, Jan 31 (Reuters) - Chinese President Hu Jintao pledged nearly $100 million in grants and soft loans to Cameroon on Wednesday as he kicked off his latest tour of Africa, a growing supplier of oil and raw materials for his country.

China has been offering low interest loans, debt relief and other incentives to increase its influence on the world’s poorest continent in return for access to the natural resources it needs to feed its booming economy.

“China and Africa have developed mutually respectful and beneficial relations over the years with due respect to all,” Hu said at a banquet thrown by Cameroonian President Paul Biya, in a speech broadcast on state television and radio.

“China and Africa have never tried to impose their social and economic development models on others,” he said.

Hu, who also toured Africa last year, met Biya to discuss social aid programmes for clean drinking water and cheap housing, as well as a greater role for China in the local oil industry and other resource sectors.

“Through you, I invite Chinese companies to come and invest in Cameroon, especially in hydrocarbons such as gas and oil, mineral exploitation and forestry where numerous opportunities exist,” Biya said at a working session with Hu at his palace.

Hu, the first Chinese head of state to visit Cameroon, was greeted by singing, dancing and flag-waving children.

Citing the World Bank, Biya told Hu that since receiving debt relief under the Heavily Indebted Poor Countries initiative Cameroon had become “one of the best risks in Africa”.

Hu arrived in Cameroon late on Tuesday on the first leg of an eight-nation tour that will also take him to Liberia, Sudan, Namibia, South Africa, Seychelles, Zambia and Mozambique.


Hu and his team, which includes Minister of Commerce Bo Xilai, Foreign Minister Li Zhaoxing and other senior policy makers, signed eight accords with Cameroon.

They included a 40 million yuan ($5.15 million) grant and 30 million yuan ($3.86 million) interest-free loan for economic and technical cooperation, as well as two concessional loans of 350 million yuan ($45.02 million) each, one for telecoms projects.

Hu also cancelled Cameroon’s debt to China -- whose value was not specified -- and signed agreements to build two schools and a hospital in Cameroon’s commercial capital Douala.

China’s trade with Cameroon, which has oil, bauxite and iron ore, doubled to $338 million in the first 11 months of 2006.

Trade between China and Africa jumped 40 percent to $55.5 billion in 2006, with the balance of trade $2.1 billion in Africa’s favour, according to Chinese Trade Ministry data published by the Chinese news agency Xinhua this week.

At a summit in Beijing in November, Hu offered $5 billion in loans and credit to Africa and pledged to double aid.

But some Africans warn poor African countries may ultimately lose from expanding trade with China unless they carefully examine bilateral deals and protect their weak manufacturing sectors from cheap Chinese clothes and household goods.

Some Western leaders and analysts criticise China for offering trade, aid and investment with no strings attached, saying it undermines efforts by some Western donors to promote democracy and human rights through conditional aid.

Hu’s trip will also take him to Sudan, where civil war in the western Darfur region has killed an estimated 200,000 people and forced 2.5 million more from their homes.

China has resisted sanctions and other pressure on Sudan, from which it buys crude oil, saying they will not help to solve the conflict in Darfur.