This cooperation is necessary for ensuring streamlined, needs-based, non-duplicative responses to future natural disasters and pandemics. How and why China became Africa's biggest aid donor - The Conversation Provide regular feedback to Chinese counterparts. How could an aid project have been improved? Millions of USD (Current) In addition, as shown in figure 3, the Overseas Economic and Commercial Counsellors Offices (ECCs) are expected to oversee and have information about the loans from Exim Bank and any other types of loans or investments from China in a recipient country. Ask, ask, ask. Amid a pandemic that has raged across the globe for two years, China has done a lot to help other developing countries. Just 22 percent of the total was spent on official development assistance (ODA), a technical name for what is generally called "foreign aid." Most Chinese ODA went to African countries, with the continent responsible for seven of the top 10 recipients. For recipient countries, Chinas increased medical humanitarian assistance is important to study because the lack of a robust consultative process could mean it does not always give what is most needed. In addition, the Ministry of Commerces Department of Foreign Aid managed over 90 percent of Chinas bilateral aid funding. This is represented in Figure 4. Not every space must be competitive, and the United States should pursue cooperation when we can. A debate over Chinese foreign aid has grown despite the lack of knowledge about how the country spends. CNN . The United States is the world's largest donor of foreign aid, contributing $35.5 billion in 2020, according to figures published by the Organisation for Economic Co-operation and Development. "In theory, China might have a greater positive impact on growth in the developing world if more of its official financing was in the form of ODA rather than other official flows," said Austin Strange, a Ph.D. student at Harvard University and co-author of the study. [4], Prior to CIDCA, Chinas aid was managed by the Chinese State Council, the Ministry of Commerce, and the Ministry of Foreign Affairs, which were tasked with the strategy, oversight, and external engagements related to Chinese aid, respectively. Sign up to receive The Evening, a daily brief on the news, events, and people shaping the world of international affairs. Indeed, China is not just one actor, and its financial assistance comes in many forms, not just grants (free) but also interest-free, concessional, and commercial loans of various lengths and foreign direct investment. With questions collected from friends around the world, CGTN invited Mao Xiaojing,Deputy Director and Senior Research Fellow of the Institute of International Development Cooperation, Chinese Academy of International Trade and Economic Cooperation, to join us to discuss them. What have been the challenges? A Stanford study documenting Chinese state-affiliated Twitter accounts reveals a systematic effort to promote Chinas delivery of aid while downplaying its receipt of aid, an attempt to draw attention away from accusations of culpability. Should the US pursue a new Cold War with China? These are country-level offices of the Ministry of Commerce that usually oversee, amongst other things, the entire Chinese aid program in that country. The report, published by AidData a research lab based at the College of William & Mary, finds that China spent $354.3 billion over the 15-year period from 2000 to 2014 a figure approaching the $394.6 billion spent by the U.S. over that same time frame. Notably, the relatively efficient Chinese assistance represents an evolution from Chinas response to the outbreak of Ebola in West Africa in 2014. Recipient countries should seek to introduce specific process-based clauses in BRI, CIDCA or other MOUs that meet their needs and aspirations. Besides medical care, China has also offered help to other countries with infrastructure, agriculture, natural disasters, etc. All Rights Reserved. Many countries already have aid management systems where lines can be added for major Chinese budget items, possibly differentiated by actor (e.g., EximBank or sector ministries). Second, the U.S. government should work with other top humanitarian donors to identify opportunities for aid coordination with China. A small portion of the remaining allocations go to health, general budget support, and education. Launched by Chinese President Xi Jinping in 2013, the BRI has come to be considered definitive to Chinas engagements across the globe, including its development cooperation, thanks to its significant reach and massive projects. National interest obviously plays a role. Tom Murphy is a journalist focused on foreign aid and development. Regional Rank--/-- Senior Associate (Non-Resident), Humanitarian Agenda, Temporary Researcher, Humanitarian Agenda. The countries that benefit the most from China's aid vary geographically. The newly established China International Development Cooperation Agency (CIDCA), a Chinese sub-ministry meant to coordinate foreign aid, has stated the Covid-19 response will be Chinas most intensive and wide-ranging emergency humanitarian operation since [its] founding. Chinas humanitarian spending has peaked several times in recent years, demonstrating a willingness of the Chinese Communist Party (CCP) to increase disaster response spending. Does China Give Aid To Other Countries | Tastefulli At the moment, foreign aid by traditional definitions constitutes the lowest financial volume in BRI-linked projects and funds. Proponents of foreign aid argue that one mechanism by which aid can contribute to democratization in recipient countries is through conditionalityi.e., the exercise of leverage by donors who attach conditions of democratic governance to the disbursement of aid (Robinson 1993; Stokke 2013; Stone 2008).Conditionality does not always work, however, when donors have other, competing, priorities . He concludes that China is meeting the demands of recipient countries. Washington, DC 20036. [14] These agreement processes may also apply to some commercial loans from Chinese banks, but oversight is not necessarily the same. However, it remains difficult for recipient countries to navigate the system. Yun Sun describes some of China . It shows that China is responding to the needs of countries who request aid to support things like infrastructure to education. Mina Chang. There are now more than 40 low and middle-income countries, according to AidData, whose debt exposure to Chinese lenders is more than 10% of the size of their annual economic output (GDP) as a . A recent CSIS survey demonstrated broad consensus that the United States and China should pursue cooperation on transnational areas that serve U.S. government interests; clearly humanitarian response would fall into this category. You may use and disseminate CGDs publications under these conditions. While this represents a high-water mark for Chinese contributions, it pales in comparison to the contributions of the United States and other leading donors. It also provides support to various organizations, such as the United Nations, World Health Organization, and the Red Cross. According to a Chinese government white paper, by May 31, 2020, China had donated medical supplies to over 150 countries, regions, and international bodies and sent medical teams to 27 countries. The OECD has estimated that the quantity of China's ODA-like aid in 2018 was $4.4 billion. These are country-level offices of the Ministry of Commerce that usually oversee, amongst other things, the entire Chinese aid program in that country. [10], It is possible that under Chinas Foreign Investment Law, introduced in 2019,[11] the procurement process may not necessarily be limited to Chinese contractors in the future. For affluent countries, foreign aid has helped spread power and influence. Ask China: Why does China help other countries? - CGTN China had offered great assistance to African countries to develop their economies and advance social progress, despite difficult economic conditions faced by the country for several decades after its birth. From infrastructure projects to humanitarian assistance, China has been committed to providing foreign aid as well as forging ahead with international development cooperation. While the United States should strengthen its commitments to multilateral aid agencies, it should also seize opportunities to coordinate with China for future humanitarian responses to achieve more effective provision of aid. Finally, the process comes back to CIDCA. The World Bank predicts that, if all proposed BRI projects are completed, they have the potential to increase trade along the six designated BRI economic corridors and maritime roads by between 2.7 percent and 9.7 percent, to increase income by up to 3.4 percent, and to help 7.6 million people lift themselves from extreme poverty. Find Out Some (But Not All) The Secrets Of China's Foreign Aid - NPR In 2009, African countries received 47 percent of Chinas total foreign assistance. CIDCA describes its objectives as to formulate strategic guidelines, plans and policies for foreign aid, coordinate and offer advice on major foreign aid issues, advance the country's reforms in matters involving foreign aid, and identify major programs and supervise and evaluate their implementation., Chinas aid model is not entirely managed by one agency. /VCG Photo, China's aid arrives in Indonesia after tsunami struck the country in 2018./VCG Photo, The dam on the Stung Russei Chrum. Contractors work on contract-basis and their scope of work differs depending on the nature of the contract. Outside humanitarian actors have an opportunity to engage with China to encourage and advise this process. Yet, even with a country-based approach where aid needs are assessed within Chinas embassies and reported back to CIDCA, a consistent lack of community consultation remains. While this assistance may not fit the principled, non-politicized definition of humanitarian aid used by many donors, it reflects how China thinks about short-term humanitarian action in the context of natural disasters and pandemics. Tweet him @viewfromthecave. Organization for Economic Co-operation and Development. In addition, CIDCA has signed memorandums of understanding (MOUs) with the Swiss Agency for Development and Cooperation, the Bill & Melinda Gates Foundation, and the Ford Foundation.[19]. According to a white paper on China's foreign aid released by China's Information Office of the State Council in 2014, China appropriated in total 89.34 billion yuan (14.41 billion U.S. dollars) for foreign assistance in three types: grant (aid gratis), interest-free loan and concessional loan from 2010 to 2012. by Jacob Kurtzer The first table is based on official development assistance (ODA) figures published by the OECD for members of its Development Assistance Committee (DAC). While international donors rushed to provide essential resources, China was criticized for its lack of response, especially given its experience handling the SARS pandemic. So why might recipient countries engage with CIDCA at all? Most grants and interest-free loans are fully managed in China, including payment in China to the contractor. A 62-year-old woman and a 14-year-old were injured in . The Chinese embassy or consulate, which are country-level offices of the Ministry of Foreign Affairs, are generally not involved in such oversight, except perhaps at a very high strategic level. The creation of CIDCA can be seen as a concerted move by China to allay concerns about the opacity of its foreign aid, by making a commitment towards a clearer distinction among the various types of Chinese financial flows. Chinas humanitarian aid mechanisms are different from major donors that typically contribute a significant portion of their humanitarian spending to nongovernmental organizations (NGOs) and/or UN response plans. Disbursements for special funds, such as the South South Aid Fund, must be approved by CIDCA. Sharon Andersen is a Policy Analyst at Development Reimagined. Forced in-home testing, quarantine, and displacement of Africans in Guangdong province caused a backlash from African governments and citizens alike. When determining its strategy for different countries or policy/project approval, CIDCA may take into account issues such as existing loans to different governments through EximBank. Ukraine war latest: Denmark and the Netherlands to give F16 fighter Instead, it is subsidiary to ministries such as the Ministry of Commerce. The agencies that formally report to the Ministry of Commerce, such as the Agency of International Cooperation and the Academy for International Business Officials, and line ministries, such as the Ministry of Health, the Ministry of Environment, the Ministry of Agriculture, and the Ministry of Education, according to their respective specific thematic areas (see figure 2). Even as China increases its contributions, the general lack of data on Chinas humanitarian aid spendingwhich predates the pandemicremains a barrier to closer international donor engagement. They are crucial to engage with. Five key cooperation areas of the Belt and Road Initiative, Source: Action Plan on BRI, http://english.www.gov.cn/archive/publications/2015/03/30/content_281475080249035.htm. Figure 4. The opaque nature of Chinese development spending led critics to label the country a "rogue" donor, charging that the so-called foreign aid money has gone to fund shoddy projects in undemocratic countries. A new working paper released by AidData alongside the data set finds that China's ODA programs have positive impacts on economic growth. All Agencies. First, a recipient government may ask Chinese authorities (banks) for a loan for a specific project. | TechTank Podcast, Congress eyes establishing a digital regulator, Enhancing climate adaptation: The role of climate resilient housing in Africas cities, To increase Black well-being, look to an equitable share of Black-owned employer businesses, Understanding Latino wealth to address disparities and design better policies, TechTank episode 73: How to address issues of racial equity and justice, Tracking the invisible primary: Three lanes to victory in the Republican presidential primary. Conflicts are lasting longer, and humanitarian funding shortfalls are commonplace. Donor states have funded just 35.7 percent of the $9.5 billion required by the United Nations Covid-19 Global Humanitarian Response Plan. For example, Chinahas been sending technical experts to Africa and providing learning opportunities including scholarships to Africans. Additionally, China does not have a public data repository sharing financial information on its humanitarian responses. China is now the largest . But to influence the future shape and focus of the BRI, engagement in China with the National Development and Planning Commission, the Ministry of Foreign Affairs, and priority provincial governments is key, as well as the Ministry of Commerce and CIDCA. For instance, it is unlikely that China will limit its aid projects to countries with which it has signed a DCA. That means all project ideas and feasibility studies must go through and be seen by CIDCA. On a basic level, it proves the claims that China is increasingly investing in the development of other countries. Workers from a Chinese engineering company erect the African Union conference center in Addis Ababa, Ethiopia, in 2010. Charitable giving by country: who is the most generous? - The Guardian Figure 3. Indeed, China has a large and growing foreign aid program of its own. Many of China's medical humanitarian have gone to countries that have signed BRI economic partnership agreements. Top Story | ANC (18 August 2023) - Facebook There are three ways in which Chinese development assistance may be financed: Grant or a donation: Grants or donations are mostly used to help the recipient country government construct social welfare projects such as hospitals, schools, and housing. August 14, 2023 - Russia-Ukraine news - CNN Catch the top stories of the day on ANC's 'Top Story' (18 August 2023) [27] At the same time, the BRI indicates a continued scaling up of Chinas development flows, though not necessarily aid. Figure 2. The pandemic has intensified needs while traditional donors are prioritizing domestic response efforts and facing severe economic stagnation. But now, overseas. With China emerging as the world's second largest economy, there are higher expectations from the world. CIDCA may share more information in the future on how frequently the top-level foreign aid strategy and plan, and the long- to mid-term policy items, will be delivered or shared publicly. 1 Based on the College of William and Mary's AidData ( 2019) project, which tracks grant programs from 2000 to 2014, China's total ODA and OOF commitments were . Evidence is mixed on the general impact of ODA on developing countries, but it generally points to improved economic gains. There are two broad processes whereby China provides concessional loans:[14]. Yet, internal pressures to focus attention on domestic development priorities may constrain the governments ambitions. Elaine Kamarck, Anna Heetderks, Cambron Wade, Ede Ijjasz-Vasquez, Jamal Saghir, China Sub-Saharan Africa. Some have interpreted these trends to mean that China is making an effort to export domestic excess capacity in manufacturing and infrastructure, especially considering the uncertainties of Chinas economic transition. Consequently, Chinas willingness to contribute to humanitarian responses has been encouraged by some humanitarian stakeholders. Why do nations invest in international aid? Ask Norway. And China That may be individually true, but if that was systematically true we would expect Chinese aid projects to show less impact than Western aid donors.". If agreed by EximBank (or any other Chinese bank, for this matter), such a project will be put out for tender procurement within China to Chinese firms. For example, on April 6, 2020, China delivered medical assistance to 18 African countries, 15 of which are BRI partners. It supports his argument that the decisions by China are based significantly on which countries want the money, not necessarily where China wants to invest. The exception to the process described above is concessional loans and finance provided to multilateral organisations such as the World Bank. China has its own definitions of what constitutes foreign aid relative to OECD countries,[22] and BRI-related projects and funds have become an important source of insight on aid by Chinese definitions. David Dollar of the Brooking Institute analyzed spending between 2012 and 2014 using the new data. This makes it unique in the world, including in comparison to other subsidiary" agencies, such as the US Agency for International Development, the Japanese International Cooperation Agency, and even Brazils Agency for Cooperation; unlike these other agencies, CIDCA has an independent administrative structure but at the same time, a limited budget (see below). Country lists based on UN list of recognised countries. The aid allows China to emphasize friendly ties and gloss over negative perceptions within BRI states. Simon Maina/AFP/Getty Images Globalization scholar Faranak Miraftab indicates that on-the-ground partnerships between communities and the private sectormediated by the public sectorcould achieve synergies to overcome certain shortcomings, creating a win-win situation. The Bank estimates that improving access to and the quality of infrastructure in the region could boost GDP per capita by 2.6 percent per year. Trilateral cooperation will now be managed through CIDCA; now is the time to for donor and other aid providers to strategically engage on specific ideas for where their organisation can add value as a third partner. 2. Examining the history of Chinese foreign aid and the logic behind the young development agency's founding can help contextualize its status and the role it will play. The more recent paper states that China has spent about $51.9 billion on foreign assistance since 1950, around the time it began to deliver what it calls "emergency humanitarian aid" to North . Has Chinese Aid Benefited Recipient Countries? Evidence from a - IMF China refers to these provisions as humanitarian assistance, differentiating them from existing development programs. According to some estimates and OECD International Development Statistics, Chinas gross foreign aid in 2001 was extremely limited, amounting to only about 1.8 percent of the total contribution by DAC donors. Leah Lynch is Deputy Director at Development Reimagined. Source: China International Development Cooperation, http://en.cidca.gov.cn/2019-08/02/c_262719.htm, CIDCAs own budget is limited to mostly administration purposes. There are also circumstances in which a Chinese company may offer to pay for a project in a recipient country with a loan from a Chinese bank. CIDCA formulates strategic plans but does not implement projects, China is not a member of the OECD Development Assistance Committee (DAC) and classifies itself as a South-South cooperation development partner or providernot a donor. The Chinese International Development Cooperation Agency (CIDCA) was established in March 2018 to manage Chinas rising development cooperation in a more intentional and streamlined manner. For a project to proceed, all of these agencies usually must receive a formal request from the recipient country government, with a specific letter sent from a minister or senior official (e.g., Director General level) in a recipient country government. How will China's economic development help other countries? Official figures show that 152 countries and international organizations have established cooperation with China taking part in the initiative over the past six years. Recipient countries need to know how much aid they are receiving. The estimates in the report rely on information about planned spending and not what was actually spent, points out Dollar. Compared to top DAC donor countries, the scale of Chinas foreign assistance is still relatively small. On-the-ground delivery, payment, and oversight within recipient countries, whether for a project financed by a grant, interest-free loan, or concessional loan, is, however, usually performed by Chinese contractors or enterprises. However, to date no DCAs have been published, so it is difficult to say whether such precedent has yet been established. These countries give the most aid - and are the most principled about Official statistics also show that Chinese companies in Africa have paid at least 900 million U.S. dollars in tax to host countries and hired 41,000 foreign employees. China has already begun tackling these and other weaknesses. Chinas Covid-19 aid packages are consistent with its policy of providing emergency humanitarian relief to natural disasters while avoiding donations to complex, conflict-related emergencies. Be humble appreciate and recognise the complexities of Chinese aid and how challenging it is for structures to change in all countries. [24] Johnston 2018: The Belt and Road Initiative: What is in it for China? In response to the spread of Covid-19, China has deployed medical teams and donated medical equipment to over 150 countries. Is Chinese aid different from traditional aid? China enlisted the help of other emerging economies, including Brazil and South Africa, to establish a development bank of their own, similar to the World Bank and IMF. As for doubts about its motivation, she said the initiative followed the principle of promoting mutual benefits through consultation and collaboration.

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