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What Does a New White Paper Tell Us About China’s International Aid?

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What Does a New White Paper Tell Us About China’s International Aid?

The official document casts light on how China’s aid program has grown and evolved since 2014.

What Does a New White Paper Tell Us About China’s International Aid?
Credit: Pixabay

China’s new white paper on international development cooperation has spurred a renewed debate around the Chinese government’s aid. It’s the third such white paper that China has published on its development efforts, and the first since 2014. At around 26,000 Chinese characters, it is even longer than the previous two papers combined.

The white paper reflects some new developments in China’s aid program. For example, it echoes the new initiatives Chinese leaders proposed in the past years, including “a global community of shared future” and the Belt and Road Initiative. Beyond that, three points deserve special attention.

First, China’s aid spending remains modest and its pattern has been evolving. The paper reveals that China invested 270.2 billion renminbi (RMB) in aid programs from 2013 to 2018. Although no detailed spending data is provided, a simple calculation suggests that China’s aid averaged around $7 billion per year (6.5 RMB roughly equals 1 U.S. dollar) during that period. That number would make China the seventh-largest sovereign donor after the United States, Germany, United Kingdom, Japan, France, and Turkey – but it equates to only around one-fifth of U.S. aid, which totaled $346 billion in 2019.

China’s aid consists of grants, interest-free loans, and concessional loans. According to the white paper published in 2014, China spent 89.34 billion RMB on aid, including 32.32 billion RMB in the form of grants (36.2 percent of the total) from 2010 to 2012. But from 2013 to 2018, the period covered in the recent white paper, the proportion of grants has risen to 47.3 percent, while the share of concessional loans dropped from 55.7 percent to 48.52 percent. This indicates that although economic infrastructure – the major focus of such loans – still takes the biggest share of China’s aid, China has been investing more in such sectors as education, health, and the environment.

Second, China’s aid toolbox and areas of focus have expanded. Traditionally, China’s aid has been delivered in eight forms: complete projects, goods and materials, technical cooperation, cooperation in human resources development, medical teams, outbound volunteers, emergency humanitarian aid, and debt relief. In the new paper, the South-South Cooperation Assistance Fund that President Xi Jinping proposed in 2015 is recognized as a novel aid instrument. With an initial contribution of $2 billion and an extra $1 billion added in 2017, China has been applying the fund to implement projects together with multiple international organizations. Moreover, some aid areas unseen in the past two papers are included in the new one, such as gender equality, sustainable and innovation-driven economic growth, and governance improvement in developing countries. These changes demonstrate that China’s aid capacity has grown and is now acting in a more sophisticated manner.

Third, humanitarian aid received unprecedented attention in this document. China takes humanitarian aid as a component of its overall development project. It was introduced under the heading of “helping improve people’s livelihood” in the 2014 paper, together with such issues as agriculture, health, and education. However, in the new white paper, it is given an entire chapter. Certainly, China has good reasons to pay special attention to humanitarian aid. During the first several months of the COVID-19 pandemic, China took its largest ever humanitarian aid action in history, delivering hundreds of tons of personal protective equipment, dispatching 35 medical teams abroad, and donating $100 million to the WHO and U.N. COVID-19 Global Humanitarian Response Plan. The pandemic awoke China to the importance of humanitarian aid in dealing with global challenges and shaping its relationship with the outside world. Moreover, it is estimated that due to COVID-19, a record of 235 million people will need humanitarian assistance in 2021. China may field more calls for humanitarian aid in the next years and see the growing importance of humanitarian aid in its foreign affairs.

China’s aid has been evolving fast in the past decade, and the government’s newest white paper confirms this. The publication of this document can help answer some questions around China’s aid. However, some key aspects of its aid efforts remain shrouded in mystery. The paper does not reveal more detailed aid spending data and cannot help observers understand how China’s aid bureaucratic system works. China’s aid has been criticized both at home and abroad, and transparency is only one of the problems. Chinese aid practitioners have been working in a fragmented aid system, without proper regulations and sufficient human resources. China’s civil society organizations, although are officially encouraged to participate in aid projects, are still marginal.

It is no secret that China aims to use development cooperation to serve its ambitious foreign policy. The publication of the white paper is encouraging, but it is only a small and easy step. To fulfill its ambition, China has to make more and greater efforts.

Zhang Chao is an assistant researcher at the Institute of European Studies at the Chinese Academy of Social Sciences.

Tang Yuxuan is a research associate in the International Development Cooperation Academy at the Shanghai University of International Business and Economics.