China's foreign aid comes with 'no strings attached'

Source:Global Times Published: 2011-4-27 4:50:00

By Liu Linlin

While China's booming economy has allowed it to become a major provider of aid to other countries, analysts warned that Beijing needs to adjust its foreign aid policy to fit the fast-changing world.

At a press briefing on Tuesday, Vice Minister of Commerce Fu Ziying outlined the White Paper on China's Foreign Aid released by the State Council Information Office.

"China does not attach any political strings to its aid. Our foreign aid programs are based on the principles of equality, mutual benefit and mutual development," Fu said. "Many developing countries lack hospitals and roads. Our aid is concentrated on sectors where they need it most."

According to the white paper, by the end of 2009, China had provided 256.29 billion yuan ($39.27 billion) in aid to foreign countries, including 106.2 billion yuan in grants, 76.54 billion yuan in interest-free loans and 73.55 billion yuan in concession loans.

The aid went to 161 countries and more than 30 international and regional organizations. Since 2004, the country's budgeted foreign aid has increased at an annual rate of 29.4 percent.

Yin Jiwu, a professor from the School of International Relations and Diplomacy at Beijing Foreign Studies University, said that unconditional aid does not always result in a win-win situation.

According to The Economist, although China deserves credit for helping millions of Africans, its unconditional aid may indirectly facilitate corruption in the region, resulting in faulty projects that in turn damage China's image.

The lack of transparency in aid deals between African countries and Beijing also helps embezzlers and fuels suspicion, the magazine added.

Pang Zhongying, a professor at the School of International Studies of the Renmin University of China, told the Global Times that it is time for China to attach conditions to its aid.

"With the scale of aid growing every year, its selfless nature may draw suspicion from taxpayers about exactly how the aid is used, especially when it goes to a country with a terrible record of corruption," Pang said.

"We also need to send independent inspectors to check the usage of the aid money, including the details of all the spending, the quality of the project and its impact on the local economy, environment and society. In this way we can improve transparency of our aid and avoid being linked to misconduct," he added.


Evan A. Feigenbaum, adjunct senior fellow for East, Central, and South Asia with the US-based Council on Foreign Relations, wrote in a commentary for Foreign Policy that Beijing should also change its habit of acting alone and rarely coordinating its foreign aid strategies or programs with other countries.

China is both an investor and a donor of aid. As its power grows, it will face even greater pressure to abandon a solo approach, and will deal with contradictions between its own lending policies and the practices of major multilateral lending institutions, Feigenbaum said.

According to the white paper, by the end of 2009, China had signed debt-relief agreements with 50 countries. The total amount of debt easing came to more than 25 billion yuan.

Wang Fan, a professor of international relations at the Beijing Foreign Affairs University, said that foreign aid is not charity, adding that China needs to improve its aid mechanism and increase cooperation with other countries and international organizations.

Separately, Fu responded to criticism that China's aid to Africa is given with an eye to the continent's resources by saying the help stems from friendship.

"Africa is an important destination for China's foreign aid because the region has the highest density of developing countries. Less than 30 percent of African countries' oil exports go to China. It is nonsense to say we are there only for resources," Fu said, adding that China is also helping countries such as Mali, which does not have discernible natural resources.

According to Fu, since China's foreign aid program began in 1950, more than 700 Chinese workers have died in projects in Africa.

Huang Jingjing and Liu Meng contributed to this story

Posted in: Diplomacy

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