Posts

, , , ,

Understanding the Top Sectors for Chinese Foreign Aid to Africa

Chinese Foreign Aid

Countries that are part of the Organization of Economic Co-operation and Development (OECD) have been the dominant force in foreign aid to developing countries in Africa. But in recent years, China has emerged as a game changer, reshaping the global aid landscape and becoming Africa’s biggest donor. Here is a breakdown of the Chinese foreign aid package to Africa and what it means to China.

Chinese investment in Africa rocketed from a mere $210 million in 2000 to more than $3 billion in 2011 and has continued to grow. As a matter of fact, Africa is the largest recipient of Chinese foreign aid, accepting 45.7 percent of China’s ¥256.29 billion total foreign aid by the end of 2009.

The aid is divided into eight categories: complete projects, goods and materials, technical cooperation, human resource development cooperation, medical teams sent abroad, emergency humanitarian aid, volunteer programs in foreign countries and debt relief. By the end of 2009, China had sponsored more than 2,000 development projects in African countries.

Unlike OECD countries, China does not officially disclose its aid information on a regular basis. Data about Chinese foreign aid often comes from media reports and governmental documents. Research labs like AidData are scrutinizing streams of sources and have constructed a fairly solid picture of Chinese foreign aid.

According to AidData, between 2000 and 2013, the largest sector of Chinese aid to Africa was transport and storage, summing to $29 billion distributed to 36 countries. South Africa received $5.2 billion and Kenya accepted $4.8 billion. Sudan, Mozambique and Angola received $3 billion, $2.6 billion and $2.5 billion worth of aid in this sector, respectively.

The second-largest sector was energy generation and supply. Among the $25 billion aid package, Sudan got the largest amount of aid at $4.6 billion. Ethiopia received $3.9 billion and Nigeria, Zambia and Angola each received about $2 billion.

Other multisector and unallocated/unspecified sectors were the third and fourth largest sectors in Chinese aid to Africa. The former sector comprised $20 billion worth of aid and the latter $8.7 billion. Due to China’s non-disclosure policy, the specific items that these budgets financed are difficult to pinpoint. What is worth noting is that Angola received $4.1 billion, the second-most amount of aid in the other multisector category, making Angola the largest recipient in the top three categories.

A total of $6.9 billion was devoted to projects in the communications sector. Nigeria, Ethiopia and Tanzania were the top three recipients, receiving $1.7 billion, $1.2 billion and $676 million respectively.

Chinese foreign aid projects in Africa focus on infrastructure, with transportation, energy and communication dominating almost half of the total aid package. China is also very careful in selecting recipient countries for its aid. Most of the African countries that are endowed with generous aid are very rich in terms of natural resources.

For example, Angola, being the top recipient of more than $12 billion over the thirteen-year span, has important reserves of oil, gas and minerals. Chinese aid to Angola focuses on infrastructure development that will make the export of this wealth accessible. Other leading recipient countries like Ethiopia, Nigeria and Sudan are also rich in natural resources.

Currently, Angola is one of the largest trading partners of China. The Chinese foreign aid agenda seems to indicate an intention to establish trade with the recipient countries, which is an understandably important reason for giving out foreign aid by any country in the world.

One issue that has been hotly debated over the past several years is that, as a non-OECD member, China constantly blurs the line between development finance and foreign aid. Chinese aid does not follow the definition of official development aid set by the OECD. As a result, many of China’s activities are deemed “evil” as they demonstrate a quest for the return of natural resources or trade partnership.

Nevertheless, trading opportunity is a fundamental benefit of foreign assistance that every aid donor is concerned with. In addition, according to Brookings Institution, in reality, China’s investment in and trade with Africa only accounts for a “tiny percentage”–less than five percent–of its global investment and trade. This disproportional aid-to-trade ratio proves China’s foreign aid to Africa agenda is not so selfish.

– Chaorong Wang

Photo: Pixabay

, ,

Poverty in Tibet is Currently a Geopolitical Conundrum

poverty in Tibet

Despite political tensions, Tibet has seen marked improvements in everyday life for its average citizens. The central government in Beijing and other nations may have ulterior motives behind their funding, but the result is the same: a more prosperous Tibet. Aid is flowing in from the Chinese government, the United Nations Development Project (UNDP) and Nepal, to name a few.

According to the regional authority, over the course of the past five years, over 530,000 people have escaped poverty in Tibet. It comes as no surprise that with a falling poverty rate, there is a rise in registered capital. Currently, the number stands at over $162 billion, a 39.4 percent increase from the previous year.

Tibetan Politics: A Delicate Situation

Tibet and China have been in a tense struggle over Tibet’s autonomy since the 1950s. Many Tibetans wish for independence, and in the past, the Chinese government has acted forcefully.

The most notable example of this is the situation with the current Dalai Lama who has been living in exile in India since the Tibetan Rebellion. Despite the Dalai Lama’s tension with Beijing, it seems even he believes that remaining with China is in Tibet’s best interest. Couple that with the many development projects China has enacted in Tibet, and it appears that their relationship is looking up.

China Tries to Tackle Poverty in Tibet

The government in Beijing gives the impression that its best path to quieting Tibetan independence talks is to tackle the region’s poverty problem. One such project that China has funded is in Amdo County, where once-nomadic herders who lived in adobe huts are now receiving homes paid for by the government with a market rate of approximately $47,000.

The Shopko family, one of the recipients of these homes, have gone on the record to express their heartfelt thanks for their new home. Their old hut sat at 16,000 feet with no heating or roads to connect them to the nearby villages.

To help with the move, the Chinese government is giving migrants jobs at local tourism centers, hotels and car washes. It follows up on this guarantee with monthly bonuses for locals who manage and protect the essential grasslands, as well as 5,000 yuan a year to residents who enroll in university.

While the Shopkos serve as an ideal for how the government attempts to tackle poverty in Tibet, the program has only reached 121 families so far, but in the previous five years, the government has spent more than $9 billion to try to alleviate poverty in Tibet. Seemingly, Beijing is looking for answers to its political issues.

Foreign Aid to Tibet

Foreign countries are investing in Tibet as well. The Nepalese government has been distancing itself from its neighbor, India, in favor of China. This political posturing could be for a host of reasons; however, the projects Nepal is planning in Tibet are apolitical for the Tibetan people.

Gobinda Karkee is a Nepalese diplomat who oversees development projects with China. The most famous of these is the Friendship Bridge, which was renovated in 2016. The plans are not all symbolic, though. By 2020, Nepal plans on finishing a rail network that will connect with Tibet and lessen its reliance on using Indian ports. The $226 million project is jointly funded by Nepal and China. Along this rail line will be multiple trading points and border checks. The two nations hope the plan will boost the local economy and help rebuild much of the infrastructure that was destroyed in the 2015 earthquake.

Poverty in Tibet has often gone unnoticed in the media because when the region is in the news, it is being celebrated for its rich culture and history. The UNDP sought to take advantage of this by building tourism infrastructure in rural areas, which in turn provides higher paying jobs for the impoverished people in the Tibetan Steppe.

Much like the Chinese government’s program, UNDP has put a heavy focus on preserving the local ecology and economy. The bulk of the project focuses on Old Lhasa City. The city is famous for its courtyards, which UNDP is mapping, landscaping and organizing the foundation of to make Lhasa a tourist destination. Old Lhasa has become an exemplary case of the economic and cultural benefits of the UNDP program.

Tibet rests in a political hotbed in South Asia, and the effects of the decisions made by its neighbors can have unintended consequences on the proud region. Throughout the religious and diplomatic dilemmas, poverty in Tibet has long been a debilitating issue. Thanks to organizations like the UNDP, this problem is now being dealt with and has already improved the lives of half a million people.

– David Jaques

Photo: Flickr

, , ,

How China Facilitates Israeli Development

China facilitates Israeli developmentBetween 2010 and 2016, Israel’s GDP grew from $233.61 billion to $317.75 billion. Foreign direct investment in Israel increased from $6.98 billion to $11.9 billion. In particular, Chinese investment in Israel increased tenfold to $16.5 billion. China facilitates Israeli development mainly by investing the technology market.

Chinese technology companies, such as Baidu, Alibaba and Ping An, have been boosting Chinese investment in the Israeli technology industry by 50 percent year-on-year. All of these data show a positive growth trend of the China-Israel business relationship. China facilitates Israeli development on a large scale.

Last year, Eli Cohen, the Israeli Economic Minister, said in an interview, “We are willing to see more Chinese companies operating in Israel […] and we are willing to increase the cooperation between China and Israel.”

According to a report from an Israeli research firm, the number of Chinese entities investing in Israeli technology companies has increased from 18 in 2013 to 34 in 2017. Baidu, Alibaba and Qihoo 360 are typical examples of how China facilitates Israeli development by investing in Israeli technology.

Baidu China Facilitates Israeli Development

Baidu is a Chinese multinational technology company founded in 2000 that provides China’s most popular search engine. In 2014, Baidu helped Carmel Ventures, an Israeli venture capital fund, raise $194 million for its fourth investment fund.

In 2015, Baidu invested $5 million in Tonara, an Israeli music software company founded in 2008. It aids in music development by providing an interactive platform for music teachers, parents and students. Users can chat, track daily piano practice progress and get music sheets from the app. The company also produces Wolfie, a teaching and evaluation tool for music teachers.

Baidu’s senior director of corporate development, Peter Zhang, joined Tonara’s board, and Tonara expanded its Chinese market with Baidu’s help. The aim is to grow the use of Tonara’s teaching tools, as there are more than 50 million piano students and 10 to 20 million violin students in China.

Alibaba Group Holding Limited

Alibaba is a Chinese e-commerce company founded in 1999. It provides consumer-to-consumer, business-to-consumer and business-to-business services online. In 2015, Alibaba invested $5 million in Visualead, a company producing innovations in QR codes, which are heavily used in China.

The funding helps Visualead expand its business in the technology market. Alibaba also benefits from the connections with Visualead’s clients, which includes Coca-Cola, Sina Weibo and BMW.

Qihoo 360 Technology Co. Ltd

Qihoo 360 is a Chinese internet security company founded in 2005. It mainly provides three products for users to guarantee safe accesses to the internet: a web browser, an app store and a search engine.

In 2014, Qihoo invested $60 million to start a global early-stage fund, which focuses on China, the U.S. and Israel. Qihoo also aided Carmel Ventures in its fourth investment round, as well as Jerusalem Venture Partners, an international venture capital firm. Previously, Qihoo invested in Israeli messaging app maker Glide Talk Ltd., gesture control-technology company Extreme Reality Ltd. and image recognition technology company Cortica Inc.

According to Cohen, other leading Chinese firms such as Huawei, Legend and Xiaomi have been investing in Israel by setting up research and development centers. China facilitates Israeli development by boosting its technology expansion.

“China and Israel are destined for partnership,” Nathan Low, an Israeli-American investment banker, said. “China has the money and the markets. Israel has the products to solve problems and address opportunities.”

– Judy Lu

Photo: Flickr

, , , , ,

How Chinese Foreign Aid Boosts African Development

Chinese foreign aid boosts African developmentIn 15 years, China has built invested over $350 billion in Africa. Chinese foreign aid boosts African development and covers 140 African countries and territories.

China has been engaging with African countries since 1955, with the Bandung Conference. From the first efforts in Egypt to the TAZARA Railway, the most remarkable project China has in Africa, Chinese foreign aid boosts African development mainly in infrastructure, education, agriculture and energy generation.

Energy Generation

China spent $134.1 billion on energy generation and supply from 2000 to 2014. In August 2017, China-Africa Renewable Energy Cooperation and Innovation Alliance and Africa Renewable Energy Initiative (AREI) signed a Memorandum of Understanding to consolidate a cooperative relationship. This project includes building micro-grids for which Chinese providers and core renewable energy manufacturers will provide technological and financial support. This project shows prominent progress in renewable energy.

In addition, China has been increasingly engaging in the wind and solar PV industries under South Africa’s Renewable Energy Independent Power Producers’ Procurement Program, which focuses more on Chinese investors and companies’ investments, technology supply and manufacturing. Renewable energy generation is a win-win strategy, protecting the global environment and building the China-Africa connection.

Agriculture

Until 2014, China spent $10 billion on agriculture, forestry and fishing projects. In 2015, Chinese President Jinping Xi announced a $60 billion funding for 10 comprehensive plans to strengthen China-African cooperation. China-Africa agricultural industrial chains are one of the top priorities in these plans.

Additionally, China has been introducing agricultural technology and new breeds into Africa and has been sending agricultural experts to train African farmers. From 2000 to 2013, Chinese foreign aid to Africa in the agricultural sector has grown from $25 million to $325 million. The remarkable growth has brought African citizens an alternative way to improve their lives.

Infrastructure

Infrastructure investment has dominated Chinese foreign aid to Africa for more than a decade. The most significant project is the TAZARA railway in East Africa. The TAZARA railway was designed and built from 1968 to 1976. This 1,860 km railway stretches from Tanzania’s largest city, Dar es Salaam, to New Kapiri Mposhi in Zambia, which eliminates Zambia’s economic dependence on Rhodesia and South Africa.

This railway benefits the many rural regions along the route. There are thriving marketplaces at every train platform, providing a valuable method for rural residents and farmers to trade daily necessities. China invested more than $400 million in this project, along with technical assistance.

TAZARA railway is only one example of the many infrastructure projects China has worked on in Africa. From 2000 to 2014, China invested $88.8 million in transport and storage. The infrastructure aid has helped to stabilize African economic development.

Overall, Chinese foreign aid boosts African development mainly in infrastructure, agriculture and energy generation. Even though Chinese foreign aid to Africa is controversial, its investment has motivated African development on a large scale.

– Judy Lu

Photo: Wikimedia Commons

, , ,

The Varying Success of China’s Humanitarian Aid to Suriname

humanitarian aid to Suriname
Suriname, officially the Republic of Suriname, is a small country on the northeastern coast of South America. Originally a Dutch colony, Suriname gained independence in 1975. Though Suriname is not a widely prosperous country, its economy has recently endured a variety of difficulties.

 

The Netherlands

In 2016, Suriname’s Gross Domestic Product (GDP) was more than $3.6 billion, the unemployment rate was slightly less than 10 percent and the poverty rate was 47 percent.

Despite gaining its independence, the Kingdom of the Netherlands was Suriname’s heaviest financial donor, sending years worth of humanitarian aid to Suriname. In 2012, the Netherlands suspended all aid to Suriname — approximately 26 million — two years after the election of President Desi Bouterse.

 

The European Commission

The European Commision has also approved emergency funding for Suriname over the years, especially in the case of natural disasters. Suriname is prone to severe flooding, which can wipe out homes and businesses, and increase unemployment and poverty. Usually, this aid is geared toward the population’s health, hygiene and sanitation, food and water.

 

People’s Republic of China

However, shortly after the Kingdom of the Netherlands completely pulled their funding to Suriname, the People’s Republic of China (PRC) increased its humanitarian aid to the country.

Since the immigration boom to Suriname in the 1990s, China has slowly been giving humanitarian relief to the South American country; in 2011, the Chinese government gifted Suriname with a new Foreign Ministry headquarters.

Also in 2012, China gave Suriname a grant of over 4 million to further the cooperation between both countries; however, it is unclear where this money is going. Since 2009, the Chinese embassy stated that development projects in Surinam — such as help with low-income housing, transportation, seaports and network television — are underway, despite any major initiatives.

 

Investment and Infrastructure

Within the last 10 years, China has set up various companies, businesses, shops, casinos and restaurants throughout Suriname. While this has vastly helped decrease unemployment, the poverty rate is still high, with nearly half the country living below the poverty line. In exchange for the land, China continues to give Suriname grants, buildings and advancements for the military.

 

Health-Related Aid

But not all of China’s aid is geared toward infrastructure and employment. In 2016, China provided Suriname with $1 million in humanitarian aid specifically geared toward Zika-related assistance. This included medical supplies and funding for medication and hospitalization for those affected. Zika virus is an infection most commonly found in Central and South America and can be fatal.

Suriname still has a long way to go before it is a completely stable country. The poverty rate still needs to lower significantly and the GDP must increase to be considered a prosperous economy.

Despite these much needed improvements, Suriname has already started distributing humanitarian aid itself. In September 2017, Suriname sent humanitarian aid to Cuba to help with relief efforts after hurricane Irma.

Though the success of humanitarian aid to Suriname is slow, the funds thus far have laid a solid groundwork. The Surinamese now have the tools they need to become a prosperous and independent country.

– Courtney Wallace

Photo: Flickr

,

Insight into Chinese Foreign Aid: A Strong Global Influence


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

Photo: Flickr