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Foreign Aid to China

Foreign Aid to ChinaForeign aid to China has played a crucial role in combating poverty. China stands as a long-term receiver and donor of foreign aid due to its rapidly growing economy and desires to sustain its international power. However, China receives less foreign aid than before due to its current classification as an upper middle-income country, with various international relations implications.

General Aid to China

Since the revolution in 1949, foreign aid to China has increased bilaterally and multilaterally, supporting social reform and development initiatives. In terms of foreign relationships and support, international organizations, such as the World Bank, still support China by investing billions in various development projects in transportation, public administration, water and sanitation, agriculture and more.

The United Nations Development Program (UNDP) has also focused on poverty relief in China. For instance, in partnership with the Alibaba Group, the UNDP launched the Rural Taobao project in 2014, which established e-commerce platforms in rural areas to provide access to goods and services that were previously unavailable. This public-private sector collaboration has helped many people in rural areas sell their products online and has created job opportunities for local residents.

Special Projects

Like other countries, China has also received foreign aid from various countries and international organizations, particularly in the aftermath of natural disasters such as earthquakes and floods. For instance, in May 2008, the Singapore Red Cross provided support worth S$150,000 to victims of the Sichuan earthquake, including assistance to meet the shelter, food, water and health care needs of 120,000 people in Lushan county.

In addition to responses to natural disasters, USAID has supported a range of poverty reduction projects in China, such as improving access to clean water and sanitation, supporting the development of small and medium enterprises and strengthening civil society organizations. However, the United States has reduced its foreign aid to China over the years.

This is due to the increasingly tense bilateral relationship between the world’s two superpowers and related geopolitical implications. Instead of having a much larger investment realm, the U.S. has focused aid on Tibetan communities, rule of law initiatives and climate change policy, particularly in areas where international attention and humanitarian assistance are crucial and localized, as these programs align with the values and interests of the United States.

The decision to provide foreign aid to China depends on various factors, including the specific development needs of China and the donor country’s priorities and resources.

Aid From China

In recent years, China has become a large donor of foreign aid itself, particularly to developing countries in Africa and Asia. Since 2000, China has spent $843 billion on bilateral aid, financing 13,427 bilateral aid projects in 165 countries, making it the biggest new player in this domain. The 2021 version of China’s approach to foreign aid and development priorities document “offers high-level principles that China claims to ascribe to.”

Although some concepts are carried over from previous papers, the 2021 version expands on the vision “articulated by its predecessors,” with “many of its new terms seeming to be in direct response to recent critiques of China’s flagship push to fund physical and digital infrastructure overseas through the Belt and Road Initiative.”

The Belt and Road Initiative (BRI) is a global infrastructure development strategy the Chinese government proposed in 2013. The initiative aims to connect Asia, Europe and Africa through a network of roads, railways, ports and other infrastructure projects, with the goal of promoting economic development and trade. According to the World Bank, the initiative involves more than 70 countries and represents more than “one-third of the global trade and GDP and approximately 60% of the world’s population.”

The BRI is controversial, with some countries accusing China of using it to expand its global influence and engage in “debt-trap diplomacy.”

A Significant Role in China’s Development History

Foreign aid has played a significant role in China’s development history, with foreign aid to China increasing bilaterally and multilaterally since 1949. However, there has been a significant downward trend in foreign aid to China as China has become a key donor of foreign aid itself.

– Scarlett Ren
Photo: Flickr