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China pledges $20b in loans to Middle East

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Chinese President Xi Jinping meets head of the International Olympic Committee's ethics commission, former UN Secretary-General Ban Ki-moon (not pictured) at the Great Hall of the People in Beijing, China, May 15, 2018. REUTERS/Thomas Peter

BEIJING (Reuters) – Chinese President Xi Jinping has pledged a package of $20 billion in loans and $1.6 billion in financial aid to countries in the Middle East, as part of what he called an “oil and gas plus” model to revive economic growth in the region.

Beijing has ramped up engagement in the Middle East in recent years as Arab nations play an important role in Xi’s signature Belt and Road foreign policy plan for strong trade routes linking China with central and southeast Asia.

Development was key to resolving many security problems in the Middle East, Xi told a gathering with representatives of 21 Arab nations in the Chinese capital.

“We should treat each other frankly, not fear differences, not avoid problems, and have ample discussion on each aspect of foreign policy and development strategy,” he said.

China would offer aid worth 1 billion yuan ($150 million) to Palestine to support economic development, besides providing a further 600 million to Jordan, Syria, Lebanon and Yemen, he added.

A consortium of banks from China and Arab nations, with a dedicated fund of $3 billion will also be set up, he said.

It was unclear what the relationship between the bank consortium, financial aid and the overall loan package would be.

The loans will fund a plan of “economic reconstruction” and “industrial revival” that would include cooperation on oil and gas, nuclear and clean energy, Xi said..

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