Chinese foreign aid

Foreign aid from China is development assistance provided by the Chinese government to other countries in the form of infrastructure projects given as gifts; concessional loans to fund projects; disaster relief; student scholarships; and other forms of assistance.[1]

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History

The first instance of foreign aid by China to Africa was in 1956 during the Suez Crisis when China gave CHF 20 million to Egypt.[2] From 1970 and 1975, China helped finance and build the TAZARA Railway in East Africa, which remains the country's single-largest foreign aid project.

Administration and budget

The Department of Foreign Aid of the Ministry of Commerce (MOFCOM) is responsible for administrating the foreign aid program.[3] It does so in coordination with the Ministry of Foreign Affairs.[3] The portfolio of the Department of Foreign Aid includes grants, zero-interest loans, the youth volunteer program, and technical assistance.[3] The grants and interest free loans originate from the national budget.[3][4] The concessional loan program originates from the Export Import Bank of China but is managed under the direction of the Department of Foreign Aid.[3] In addition, the Department of Foreign Aid provides subsidies from the national budget covers the concessional component of loans.[3]

Chinese foreign aid is thought to be unpopular domestically due to the common belief that the largesse is required more urgently at home.[5] Due to the secrecy of China’s aid programme details (of how much is given, to whom and for what) are difficult to ascertain.[5]

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.[4]

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.[5] 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.[5]

Forms of aid and recipients

Official sources divide aid into three categories: grants, interest free loans, and concessional loans.[4] 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."[6]

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.[7] Perhaps the famous type of project is a football stadium, which has been referred to as stadium diplomacy.[8] A similar type of project that receives attention is the construction of theatres and opera houses.[9]

There is an African focus with about 45% of aid going to African countries in 2009.[10]

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See also

References
  1. Brautigam, Deborah (2011). "Aid 'With Chinese Characteristics': Chinese Foreign Aid and Development Finance Meet the OECD-DAC Aid Regime" (PDF). Journal of International Development.
  2. Li, Xiaoyun. "China's Foreign Aid and Aid to Africa" (PDF). OECD.
  3. Bräutigam, Deborah (March 2010). "China, Africa and the International Aid Architecture". Africa Development Bank.
  4. China’s Foreign Aid and Government-Sponsored Investment Activities (PDF). RAND. 2013.
  5. "Despite its reputation, Chinese aid is quite effective". The Economist. 12 October 2017.
  6. "Analysis: Behind China's aid structure". IRIN. September 17, 2013.
  7. "China's Foreign Aid". Xinhua. 2011-04-21.
  8. Foreign Aid: Diplomacy, Development, and Domestic Politics. The University of Chicago Press. 2007. p. 32.
  9. "An Opera House for Algeria". COMMANDOpera. April 21, 2010.
  10. "China Gives Almost Half of Foreign Aid to African Countries". Bloomberg. April 21, 2011.
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