China Places The Belt And Road Initiative At The Heart Of Its New Foreign Aid Policy

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Op/Ed by Chris Devonshire-Ellis  

  • China’s State Council Information Office has issued a White Paper: “China’s International Development Cooperation in the New Era.”
  • Replaces previous announcements and upgrades the entire Foreign Aid Policy  

China has upgraded its foreign aid policy by refocusing and renaming it ‘International Development Cooperation’ while also introducing new initiatives.

This new status is unveiled in China’s latest Government White Paper, issued by State Council Information Office on January 10th titled “China’s International Development Cooperation in the New Era.”

It is the first time China has issued a white paper under the name of “International Development Cooperation” (IDC) instead of “Foreign Aid”. The paper introduces new cooperation models, partnerships, platforms and better coordination planning, and replaces two previous White Papers concerning Foreign Aid.

According to the paper, China has expanded the scope and diversified the mechanisms of its international development cooperation.

From 2013 to 2018, China allocated RMB 270.2 billion (US$41.4 billion) for foreign assistance in three categories — grants, interest-free loans, and concessional loans. Of the total, grants accounted for 47.3 percent and concessional loans 48.52 percent.

The main recipients were the least developed countries in Asia and Africa.

Xinhua has quoted several academics from impacted countries concerning the new IDC. Cavince Adhere, an international relations scholar in Kenya, said developments such as the implementation of the Africa 2063 Agenda “cannot take place” without the Belt and Road Initiative.

Stephen Ndegwa, a lecturer at the United States International University-Africa in Nairobi comments “China has built many roads, railways, ports, and power facilities for Africa, a lot has been done.”

Beatrice Matiri-Maisori, lecturer at Riara University in Kenya, said China has set an example, “not only as a major industrial manufacturer, but also as a country that has delivered on its commitments to sustainable development.”

Rommel Banlaoi, the President of the Philippine Association for Chinese Studies, is quoted as saying that “In conducting international development cooperation, China – the largest developing country in the world – has shown its global vision, which is a vision that can be shared, particularly by neighbors in the developing world.”

The Paper also noted the increasingly diverse forms of international development cooperation, ranging from complete projects, goods and materials, technical cooperation, the South-South Cooperation Assistance Fund to medical teams and volunteers.

The mission, the Paper says China’s mission is to “promote a global community of shared future” and continues to give examples, such as China assisting other developing countries to reduce poverty, boost agricultural progress, support equal access to education, improve infrastructure, and speed up industrialization.

These have included China’s experience in village-by-village poverty reduction in Laos, Myanmar and Cambodia. Chinese technicians and agricultural professionals visited these countries and taught impoverished farmers how to grow viable plants to increase their income.

The China International Development Cooperation Agency said “China conducts international development cooperation with a focus on improving local people’s well-being.” in support of the Paper.

China’s International Development Cooperation Future Policy

Looking into the future, the Paper said China will “do everything within its means” to promote cooperation and inject Chinese strength into global development, stating that “China will implement more projects for improving living standards in developing countries, especially the least developed countries, to ensure food security and guarantee basic needs, and prevent secondary disasters in the world economy. As a builder of world peace, a contributor to global prosperity and a defender of international order, China will continue to cooperate on international development and contribute even more to improving the common well-being of humanity and building a global community with a shared future.”  

Other practical points within the Paper include the goal of development cooperation to serve the Belt & Road Initiative, suggesting that foreign aid and other development cooperation agendas will be coordinated with the BRI. That suggests there will be increasing top-down control of BRI investments rather than allowing SOE’s to drive financing and loan allocation based on their commercial interests.

The Paper also discusses “diverse forms” of development cooperation, and additionally mentions (Part VI) “Supporting the Endogenous Growth of Developing Countries” in which it talks about improving governance of developing countries. This includes, among others, assisting countries in their development planning, which is the central element in China’s governance model. This has already occurred in the Middle East and Africa, and moves the Belt & Road Initiative forward as a specific policy that will influence other national and regional development projects. The Saudi Vision 2030 and previously mentioned African Union Africa 2063 Agenda are examples of this, as is the emergence of the African Continental Free Trade Agreement (AfCGTA) which was largely brokered by Beijing and came into force from January 1.

The Paper effectively places the Belt And Road Initiative at the very heart of China’s Foreign Aid Program, and is far more ambitious than China’s previous foreign aid schemes.

The full English language text of the White Paper “China’s International Development Cooperation in the New Era” can be accessed here .

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Silk Road Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Asia, and assists foreign investors into the region. For strategic advisory and business intelligence issues please contact the firm at silkroad@dezshira.com or visit www.dezshira.com

 

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