Thursday, July 10, 2014

China's second foreign aid white paper published -- finally!

[GRAPHICS]CHINA-FOREIGN AID-GEOGRAPHICAL DISTRIBUTION (CN)
Last summer, we started hearing that Chinese analysts were working on the second white paper on foreign aid. It has been many months in the works, and unexplicably delayed for months, but now, at last, the second White Paper on Foreign Aid has been published. It is much less detailed than the first, and perhaps that reflects the triumph of whatever concerns delayed it. Here's what's interesting.

In the three years (2010-2012) since the last report, China provided (committed? disbursed?) $14.41 bn in official development assistance (ODA), or an average of $4.8 bn per year:
  • 7.26 billion yuan ($1.17 bn) of interest-free loans
  • 32.32 billion yuan ($5.21 bn) of grants
  • 49.76 billion yuan ($8.03 bn) in concessional loans (you hui dai kuan)
These figures do not include additional funding (over $1.3 billion) provided through the UN and multilateral and regional development banks over this period.

According to the paper, 51.8 percent of Chinese aid goes to Africa. This means an average of $2.5 billion per year between 2009 and 2012.

China is also still providing debt relief in Africa. Nine countries: Tanzania, Zambia, Cameroon, Equatorial Guinea, Mali, Togo, Benin, Cote d'Ivoire and Sudan, had 16 mature interest-free loans cancelled, for a total of 1.42 billion yuan ($229 mn). This continues the practice begun more than a decade ago of loan cancellation only for the interest-free loans. Countries thinking they might have their concessional loans cancelled need to think again: concessional loans have never been included in the loan forgiveness program.

The "Chinese Peace Corps" is still alive, with some 7000 volunteers sent abroad over the past three years. Why do we hear almost nothing about this program? Has anyone run across a volunteer in Africa?

Another interesting development: China is providing some assistance to Burkina Faso, a country that recognizes Taiwan. This is done as part of a WTO-related program, where Benin, Mali, Chad and Burkina Faso -- the Cotton-4 countries -- receive cotton seeds, farm machinery and fertilizers, technology transfer and training, and support for other aspects of their cotton value chain. Cotton is probably the top agricutural export from Africa to China, so this clearly shows economics trumping politics.

For official figures on foreign aid expenditures since 2000, click <here>

A hat tip to Winslow Robertson who was even faster than my google alert to pick up news of the White Paper!

5 comments:

  1. Deborah,

    While only one of the "BRICS" alliance countries is in Africa, I'm curious if you have had a chance to look into this New Development Bank and companion stabilization fund just agreed in Brazil. It would be interesting to see if the new banks' founding documents or structure indicate which of the two models they might resemble more: the Washington Consensus model of the Bretton Woods twins, or the alternative development model China pioneered long ago in Africa, which you've explained so well to western readers in your work. My bet would be on the latter.

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  2. Deborah,

    You ask -- "The "Chinese Peace Corps" is still alive, with some 7000 volunteers sent abroad over the past three years. Why do we hear almost nothing about this program? Has anyone run across a volunteer in Africa?"

    Well ...

    How about this link --

    http://english.peopledaily.com.cn/n/2014/0813/c98649-8768899.html

    and this link --

    http://www.bworldonline.com/content.php?section=World&title=eight-chinese-quarantined-as-panic-grips-ebola-hit-west-africa&id=92594

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  3. Dear @Anonymous -- thanks for the links -- however, the medical teams in these stories are not China's new "Peace Corps" program of youth volunteers, but teams of Chinese doctors that have been going to African countries for some 50 years. They do a great job, but this is a different program.

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  4. Do these figures, does anyone know, monies used for buying up land under what pretense ever? There is a lot of talk about Chinese "land grab" in Africa and maybe, maybe not, some of these figures are just a front for some of these investments? (Though I think a land grab, if the land is then put to good use could well be more beneficial to the receiving countries than e.g. an "intellectual property grab" in the form of patented seeds ...)

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  5. Dear professor Brautigam,

    first of all, thank you very much for your excellent work.
    I have one question concerning China's foreign aid statistics: are the official data released through the second White Paper comparable to the estimates that Kitano N. and Harada Y. elaborated? As you already mentioned, the former doesn't include the funding given to multilateral organizations. Brookings (the link is the following: http://www.brookings.edu/blogs/africa-in-focus/posts/2014/07/16-africa-china-foreign-aid-sun) does compare the two figures ("This puts China’s annual foreign aid to be approximately $5 billion, which is lower than the estimates in a recent report “Estimating China’s Foreign Aid 2001-2013” by the Japan International Cooperation Agency Research Institute"). Although, to my understanding the definition adopted by the State Council and the one elaborated by Kitano N. and Harada Y. as a proxy to compare China's foreign aid to ODA, are different and as such the figures are not comparable. Could you kindly clarify this point?
    Thank you very much for your time.
    Best regards,
    Anna Paola Quaglia

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