The white paper on China’s International Development Cooperation in the New Era released on the 10th of this month replaced “foreign aid” with “international development cooperation” for the first time, fully demonstrating the trends and characteristics of China’s international development cooperation.

Authors: Yuejun Han, Julia Sun

On 10 January 2021, the State Council Information Office released the white paper China’s International Development Cooperation in the New Era, officially replacing “foreign aid” with “international development cooperation”. It also defines international development cooperation as:“Under the framework of South-South cooperation, China conducts bilateral and multilateral international cooperation in the field of economic and social development, including humanitarian assistance, through foreign aid and other means.”

Together with the two white papers released in 2011 and 2014,the three white papers provide a comprehensive introduction to the development history and achievements of China’s foreign aid since the 1950s, as well as the evolvement of the foreign aid management system.

The new white paper reveals new trends of China’s development cooperation, including:

ENLARGED AID VOLUME AND OPTIMIZED COMPOSITION

Before 2009, China’s annual foreign aid averaged 4.2 billion yuan. Between 2010 and 2012, it reached nearly 30 billion yuan each year. From 2013 to 2018, China’s annual aid has increased by more than 40%, reaching 45 billion yuan (about USD 7 billion). This makes China the seventh largest international development donor in the world after the United States, Germany, Britain, Japan, France and Turkey.

The composition of aid funds has also changed over time. There are three types of China’s aid: grant, interest-free loans and concessional loans. Before 2009, grant accounted for about 40%, and interest-free loans and concessional loans each accounted for about 30%. Between 2010 and 2012, the proportion of concessional loans increased to about 55%, the proportion of interest-free loans fell from nearly 30% to about 8%, and the proportion of grant went down slightly. From 2013 to 2018, interest-free loans drop to about 4%, while the proportion of grant rose to the highest level of 47% and concessional loans accounted for 49%. As a result, concessional loans and grant became the dominant types of China’s foreign aid.

INCREASED “SOFT” PROJECTS

Before 2009, complete sets of projects, which are used to help recipient countries build industry and civil engineering projects, were the main means of foreign aid, accounting for 40% of aid spending. From 2010 to 2012, new types of assistance emerged and gradually developed in areas such as ecological protection and trade facilitation. Since 2013, complete sets of projects were no longer the most important form of assistance. The same period witnessed the transition from traditional “China’s self-construction” model to “the recipient’s self-construction” model, which helped eligible recipient countries to improve their independent construction capabilities.

As a result of the increasing “soft” projects on technical cooperationand capacity building, the number of beneficiaries has been increasing. From 2013 to 2018, the annual number of beneficiaries of the training programs doubled. From 2010 to 2012, the number of countries involved in technical cooperation has expanded from 61 to 95, and the number of technical cooperation projects has increased by 20% annually. From 2013 to 2018, China dispatched over 20,000 foreign aid volunteers, compared to only 405 volunteers before 2009.

SOUTH-SOUTH COOPERATION AS A KEY MECHANISM

Since 2013, the most important change in aid modality is the promotion and development of the South-South cooperation model. South-South cooperation is a fundamental mechanism of China’s international development cooperation. It is also an important channel for developing countries to improve their development capacity. Since 2013, China established cooperation institutions and mechanisms such as the South-South Cooperation Assistance Fund, the South-South Cooperation and Development Institute, the International Development Knowledge Centre, and the Belt and Road South-South Cooperation Plan for Climate Change.

As of 2019, China has pledged USD 3 billion to support South-South cooperation funds, and carried out 82 South-South cooperation projects in collaboration with international organizations in areas such as agricultural development and food security, poverty reduction, maternal and child health, health response, education and training, post-disaster reconstruction, protection of migrants and refugees, and trade promotion assistance. South-South cooperation has become an indispensable driving forcefor international development. It has played an active role in complementing and balancing the traditional international aid led by North-South cooperation.

INTEGRATING INTERNATIONAL DEVELOPMENT COOPERATION WITH NATIONAL DEVELOPMENT STRATEGIES

The 2011 and 2014 white papers kept focus on the implementation and results of China’s foreign aid without positioning aid in the country’s overall development strategy. To a certain extent, it reflects that the role of foreign aid in the earlier phase was relatively simple and the results were limited to aid sector.

With the establishment of the China’s Agency for International Development Cooperation (CIDCA) as a milestone, the new white paper closely integrated international development cooperation into the national development strategies and initiatives, making foreign aid an important carrier of international exchanges, as well as a critical approach to international cooperation and to forge global development partnerships. The white paper demonstrates the contribution of foreign aid in building ‘acommunity with a shared future for mankind’, the Belt and Road initiative, and high-quality green development. Its influence has expanded from aid and international development to economic, trade and state governance arenas.

INTEGRATING INTERNATIONAL DEVELOPMENT CONCEPTS

Since 2013, China has fully introduced the concepts of international development. The 2021 white paper demonstrated that international development concepts and goals have been seamlessly integrated into China’s foreign aid through concrete results, including gender equality projects to strengthen the protection of women’s rights and support women’s capacity building in recipient countries, sharing governance experience with other developing countries and carrying out capacity building through bilateral and multilateral cooperation mechanisms; and promoting sustainable and innovative economic growth. The new white paper also reviewed the achievements of China’s foreign aid against the 17 goals of the United Nations 2030 Sustainable Development Agenda.

Results have also been achieved in the field of international humanitarian assistance. From 2013 to 2018, China provided emergency humanitarian assistance to 60 countries. According to the new white paper, Since the outbreak of the COVID-19 in 2020, China has provided various assistance to 150 countries and 20 international organizations, supporting the fight against the epidemic and mitigating global risks.

The 2021 white paper shows that China will adopt flexible approaches for international development cooperation, such as dialogue and consultation, trilateral cooperation, donation and financing. It is foreseeable that China is not only an active participant in the arena of international development, but also an active explorer of innovative cooperation models, as well as a thinker and promoter of future directions of international development cooperation.

While sharing the overall picture and development history of China’s foreign aid, the three white papers have not provided detailed data about China’s aid. Apart from the broad figures, the white paper includes no country-specific or year-specific disaggregated aid data. As a result, some foreign institutions could only estimate the scale and trends of China’s foreign aid based on media reports and modelling, which sometimes deviates from the facts and full picture. Going forward, it will be critical to improve the statistical data and enhance transparency of China’s foreign aid.

This article is the translation of 三份白皮书揭示中国发展合作的哪些趋势 released on International Development Observer on 18 January 2021.

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REFERENCE

Zhang Chao and Tang Yuxuan, What Does a New White Paper Tell Us About China’s International Aid? https://thediplomat.com/2021/01/what-does-a-new-white-paper-tell-us-about-chinas-international-aid/