For more than 10 years many African countries have borrowed intensely from the international capital market amid the continent's continued economic growth. However, some African countries' debt loads are worsening and signs of a debt crisis have emerged, due to a decline in major commodity prices, the sluggish eurozone economy and China's economic slowdown. Meanwhile, African countries are set to seek more development funds to achieve the UN's sustainable goals and the African Union's Agenda 2063.

For this reason, Sino-African cooperation shouldn't merely meet African development needs, but should help Africa contain debt sustainability risks. Deeper ties between China and Africa can be forged accordingly and China would have greater clout in global economic governance.

The implementation of Africa's development plans requires more capital support. According to estimates by the United Nations Economic Commission for Africa in 2015, Africa needs about $200 billion per annum to implement social, economic and environmental dimensions of sustainable development commitments. The Agenda 2063 and other road maps for Africa emphasize the importance of domestic capital and improving the capital market to finance the projects. Nevertheless, African countries are weak in mobilizing domestic capital to fulfill sustainable development goals, considering that they run persistent fiscal deficits and their levels of private deposits remain relatively low. Additionally, their domestic financial markets are underdeveloped and there's a scarcity of investment opportunities. As a consequence, African countries are haunted by severe capital flight, which is further compounded by their defective mechanisms to channel deposits to manufacturing investment.

In light of this, the utilization of external financing is the only option. But depressed commodity prices have created current account deficits and fiscal deficits in many countries. This, in addition to the drastic devaluation of their currencies and increased loan costs amid global liquidity tightening, has aggravated their external debt burdens, and increased debt risk. Specifically, the continent's total debt outstanding has been on the rise, and its ability to go deeper into debt and service debt is nearing or above international warning levels. Also, funds raised through the international capital markets also push up risk. On top of that, the issuance of sovereign bonds has become a major source of public debt, and moreover, the weakening of many African countries' currencies has subjected some countries' public debt to currency swings.

China can help Africa deal with this uncertainty over the sustainability of debt, which could not only help reduce property in Africa but also allow China to shoulder greater responsibility in global economic governance.

First, China need to increase its portion of free aid toward Africa and help to reduce the continent's external debt as a percentage of its overall amount. African countries have long been the recipient of Chinese foreign aid, but they are faced with rising pressure of repayment along with accumulated scale of concessional loans. In addition, the fact that African countries have to meet certain conditions before acquiring loans from the IMF or the World Bank has also put pressure on financing activities. These elements could exert negative influence to the sustainability of Sino-Africa cooperation and healthy development. Therefore, while China is innovating and developing finance and exploring Public Private Partnership (PPP), China should not neglect the role free aid could play in pushing forward modernization in Africa.

Second, China need to keep an eye on certain African countries' risks of external debt. Currently the sustainability of external debt is generally controllable, but we need to remain cautious about the possibility of a debt crisis in certain countries, such as Sudan, Zimbabwe, Ghana and Mozambique. Those countries' development trends in external debt need timely analysis and evaluation, and precautions need to be taken when necessary. Regarding projects relating to Sino-African cooperation, China needs to pay special attention to projects that are guaranteed by the host countries and their governments' solvency, and if necessary a mechanism of insurance needs to be introduced to avoid default on debt.

Third, finance from development banks could play a greater role in Africa, and methods of raising capital need to be more innovative. For instance, China could help explore the advantage of development finance in mid- to long-term financing and link such advantages to African governments' interested areas via credit building and market fostering. This could help improve African governments' guarantee system of financing, and could strengthen cooperation in Africa's infrastructure where development is needed. In addition, China should help introduce the PPP model to African countries, which could enhance mobilization of their domestic capital and help refine their local capital markets. Moreover, China can also guide mid- to long-term investment and help extend African countries' ability to pay back loans and ensure sustainability of their external debts, as well as expand Chinese investment and cooperation in those countries' industrialization and agricultural modernization where financing demand is highly needed.