Monday, June 9, 2014

JICA: Excellent New Estimates for Chinese Aid

At last, a team of experienced researchers with extensive experience on official development assistance (and foreign aid), and with deep background on China, the OECD, and the Asian approach to aid and cooperation more generally, has come up with an estimate of China's total annual official development assistance (ODA) in 2013 of $7.1 billion. This fits well with the latest glimpse into official figures, when a Chinese official let slip in April 2013 that China's official aid was about $6.35 billion, and with my own estimates.

I highly recommend their paper: "Estimating China's Foreign Aid, 2001-2013 JICA-RI Working Paper No. 78, June 2014. Lead author Naohiro Kitano and his colleague Yukinori Harada have done a superb job. The methodology is carefully worked out and fully explicated.

One of the gnarly questions in estimating Chinese aid is how to treat subsidized (preferential) export credits, which like everything else out of the Chinese policy banks, seem to be growing rapidly. Kitano and Harada follow the method required by the OECD's Development Assistance Committee (DAC), which states that export credits, no matter how concessional, cannot be considered -- by definition -- official development assistance for DAC members, as their main purpose is the promotion of a country's exports. Of course they can be counted as foreign aid, just a military aid is foreign aid. But to be comparable with the OECD countries, neither of those two should be mixed up with ODA.

From what I can see, the Chinese also follow this recommendation. Though many in China do not understand the difference between the two (this is also true for many in the OECD), the budget lines that subsidize the two different loans (concessional foreign aid loan, or "you hui dai kuan" and preferential export buyer's credits, or "you hui mai fan xin dai") are also separate, and only one, concessional foreign aid loan, is included in Chinese announcements of their foreign aid.

No comments:

Post a Comment