Chinese foreign aid

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Chinese foreign aid may be considered in this article as both governmental (official) and private development aid and humanitarian aid originating from China.

Chinese official aid - unlike most major nation-state sources of aid - is not regulated and measured under the OECD's protocols for official development assistance (ODA). According to OECD estimates, 2020 official development assistance from China increased to US$4.8 billion.^[1] In this respect, the program is similar in monetary size to those of Norway and Canada. China, however, provides a larger amount of development finance in the form of less-concessional loans.^[2] The Chinese government represents its aid as characterised by a framework of South-South cooperation and "not interfering in the internal affairs of the recipient countries".^[3]

History[]

Following the establishment in 1949 of the People's Republic of China under the Chinese Communist Party, China began providing aid to other countries in support of socialist and anti-imperialist causes.^[4] An early instance was the donation of CHF 20 million to Egypt 1956 during the Suez Crisis.^[4] From 1970 and 1975, China helped finance and build the TAZARA Railway in East Africa, which cost about $500m, and as of 2012 was considered to be China's largest-ever single-item aid project.^[5] In 1974 (near the end of Mao Zedong's period as China's leader), aid reached the remarkably high proportion of 2% of gross national product. The proportion declined greatly thereafter although the absolute quantity of aid has risen with China's growing prosperity. Meanwhile, the motivation of aid became more pragmatic and less about promoting a grand ideology.^[4]

China’s International Development Cooperation Agency (CIDCA) was created in 2018 to help streamline the process of China's foreign aid, in which the ministries of commerce and foreign affairs and the State Council are also involved.^[6]

Comparison with ODA[]

Chinese aid, unlike the aid provided by most developed countries, is not governed by the categories of the OECD's Development Assistance Committee, and is not counted in international statistics as Official Development Assistance (ODA).^[6] Rather than being a "donor", China sees itself as working within a framework of South-South cooperation:^[3]

China adheres to the principles of not imposing any political conditions, not interfering in the internal affairs of the recipient countries and fully respecting their right to independently choosing their own paths and models of development. The basic principles China upholds in providing foreign assistance are mutual respect, equality, keeping promise, mutual benefits and win-win.

— White Paper: China's Foreign Aid (2014)

As of 2017, China does not provide comprehensive data on its foreign aid.^[7] The OECD has estimated that the quantity of China's ODA-like aid in 2018 was $4.4 billion.^[8] If counted as ODA, this would have placed China tenth in the list of donor states that year, between Norway and Canada, and far behind the United States which provided $34 billion. However, China provides a much higher volume of development financing that would not qualify as ODA because it lacks a sufficient concessional element and/or is linked to commercial transactions.^[7][2] A 2017 study for AidData found that China's ODA-like aid was effective at producing economic growth in recipient countries.^[7]

Administration and budget[]

The Department of Foreign Aid of the Ministry of Commerce (MOFCOM) is responsible for administrating the foreign aid program.^[9] It does so in coordination with the Ministry of Foreign Affairs.^[9] The portfolio of the Department of Foreign Aid includes grants, zero-interest loans, the youth volunteer program, and technical assistance.^[9] The grants and interest free loans originate from the national budget.^[9][10] The concessional loan program originates from the Export Import Bank of China but is managed under the direction of the Department of Foreign Aid.^[9] In addition, the Department of Foreign Aid provides subsidies from the national budget covers the concessional component of loans.^[9]

Chinese foreign aid is thought to be unpopular domestically due to the common belief that the largesse is required more urgently at home.^[11] Due to the secrecy of China's aid programme details (of how much is given, to whom and for what) are difficult to ascertain.^[11]

A RAND published study on "China's Foreign Aid and Government Sponsored Investment" estimates the amount of both traditional aid and much more broadly defined government sponsored investment that was pledged by China in 2011 was 189.3 billion US dollars.^[10]

According to a 2017 study, described as “The most detailed study so far of Chinese aid,” by AidData, between 2000 and 2014 China gave about $75 billion, and lent about $275 billion — compared to $424 billion given by America during the same period.^[11] A fifth of this Chinese aid, $75 billion, was in the form of grants (about equivalent to Britain's), while the rest was concessional lending at below-market interest rates.^[11]

Forms of aid and recipients[]

Official sources divide aid into three categories: grants, interest free loans, and concessional loans.^[10] Deborah Brautigam identifies in her book The Dragon's Gift nine types of aid from China including "medical teams, training and scholarships, humanitarian aid, youth volunteers, debt relief, budget support, turn-key or ‘complete plant’ projects [infrastructure, factories], aid-in-kind and technical assistance."^[12]

Grants or non-interest loans have funded 2,025 complete infrastructure project, from the start of aid efforts up to 2009, in the categories of farming, water distribution, conference buildings, education facilities, power supply, transport, industrial facilities, and other projects.^[13] Perhaps the famous type of project is a football stadium, which has been referred to as stadium diplomacy.^[14] A similar type of project that receives attention is the construction of theatres and opera houses.^[15]

There is an African focus with about 45% of aid going to African countries in 2009.^[16]

See also[]

• Foreign aid to China
• Belt and Road Initiative
• Debt-trap diplomacy
• Foreign policy of China

References[]