Since 2000, China’s foreign aid has increased to developing countries. Yet, until a report released in October 2017 by AidData, it was unclear what China’s foreign assistance objectives were. The report revealed that much of Chinese foreign aid doesn’t meet the definition of official development assistance, but it does successfully stimulate the economies of recipient countries. Much of their aid is targeted at improving global trade for China.
Between 2000 and 2014 China gave $354.3 billion in global development. Approximately 22 percent of this can be considered official development assistance, meaning it is used for food aid, drugs, medical supplies and other humanitarian causes.
African countries were the most prominent recipients of official Chinese foreign aid.
It is suspected that China is investing in the continent because of Africa’s mineral industry. Of the $35.8 billion in official development assistance for the top ten recipient nations, $23.3 billion went to African nations; this money was largely used to develop infrastructure.
To be sure, China definitely still considers its own foreign policy interests when offering aid. Countries aligned with China in the U.N. received an average of 86 percent more aid from the country.
China is also financing neighboring countries to restore old trade routes.
What is known as the “One Belt, One Road” project is intended to rebuild infrastructure along the old Silk Road to increase trade with Europe. This source of Chinese foreign investment is not considered official development assistance, as the funding typically goes to private sector enterprises and loan agreements. The neighboring countries of Russia and Pakistan receive the most money in this form, accounting for $52.9 billion combined.
Critics feared China’s lack of transparency was because the country funded oppressive governments of resource-rich countries for its own benefit; the current research now dismisses this fear. While Chinese foreign aid does go to countries with poor governance, it is also received by countries with strong governance such as Brazil, India and Indonesia.
Much of Chinese foreign aid is invested in the private sector, and the country is overtaking the U.S. in amount of money given.
In fact, between 2011 and 2014 China gave more aid than the U.S. (2014 is the most current data). Cumulatively, between those 15 years, the U.S. gave $394.6 billion and China gave $354.3 billion in foreign aid. CNBC notes that China may take over as the primary foreign aid donor if the Trump administration continues cutting foreign aid.
Overall, the AidData report stressed that more transparency is needed from China. It is difficult to determine the success of projects without knowing how much money is promised versus how much is actually used. There is also concern about the ethical standards of Chinese-funded projects. Yet, AidData’s report has caught interest from both the Chinese and global communities wanting more information on Chinese foreign aid.
– Mary Katherine Crowley