Talk of the Town
On Jan 10, the State Council published a white paper on “China’s international development cooperation in the new era”, which lays out China’s new vision for foreign aid in the coming years.
Up to the publication of the new white paper, official information on Chinese foreign aid has been scant. The Ministry of Commerce (MOFCOM), which used to administer China’s official foreign aid before the creation of China International Development Cooperation Agency (CIDCA) in 2018, published two white papers in 2011 and 2014, which constitute the only available official accounts, leaving the outside world resorting to third party databases (such as AidData) for information.
In that sense, the new white paper provides a much needed (and overdue) update. What it has also updated is China’s philosophy of foreign aid which has not been well articulated since the creation of CIDCA.
China’s foreign aid in numbers: With a few pie charts and bar graphs, the white paper depicts a statistical picture of Chinese foreign aid from 2013 to the end of 2018. A total of RMB 270.2 billion (about USD 41.5 billion under today’s exchange rate) was dispersed during this period as foreign aid, which breaks down into 47.3% of grants, 4.18% of zero-interest loans and 48.52% of concessional loans. A large portion (44.65%) of that aid went to Africa. Due to accounting and transparency discrepancies (especially when it comes to concessional loans), it is hard to compare Chinese foreign aid directly with other major donor countries. But previous estimates have put it roughly on a par with Turkey and Sweden.
Connection of foreign aid with BRI: The white paper provides a rare glimpse into how Chinese foreign aid is strategically deployed to advance the Belt and Road Initiative. For example, through its technical assistance program, it trained Belarusian officials on policy support for industrial parks and shared Chinese experience with industrial park development, laying the groundwork for better local coordination for the China-Belarus Industrial Park. Through its donation programs, China supplied customs in BRI countries with container inspection equipment, which helps accelerate the transfer of goods across borders. And through a turnkey project for Lao PDR (national bank transaction system), it facilitated financial flows in and out of the country.
Sustainable development: The white paper outlined how Chinese foreign aid helped advance the UN Sustainably Developmental goals. Interestingly, under climate change, it mentioned the announcement of the South-South Climate Cooperation Fund in 2015 but describes no further details beyond the “10-100-1000 program” that existed long before the 2015 announcement, making people wonder about the actual fate of that fund.
The future of Chinese foreign aid: Observers have pointed out that the white paper also indicates changes to Chinese foreign aid on more fundamental (philosophical) levels, especially around the ideas of yi (public good) and li (self-interest). Watch Panda Paw Dragon Claw for an elaborated take on this point by our contributor Stella Zhang.