Teaching Instead of Just Giving: Enhancing Development Vitality
By JIN LING
IN recent years, discussion about China’s increasingly influential role in the field of international aid has proliferated in communities around the world, but actually China is a far from new addition to foreign aid provision. Shortly after the founding of the People’s Republic, China began to provide foreign aid despite its own poverty and lack of resources.
Initially offering support to friendly neighboring countries, China has provided aid to more than 120 countries and regional organizations over its 65 years of development, creating a foreign aid model with Chinese characteristics in its long-term practice of foreign assistance.
Politically-neutral Principle of Equality and Mutual Benefits
One fundamental difference between China and Western countries in the way it implements its foreign aid policy is precisely that it does not impose political conditions.
When providing foreign assistance, China adheres to the principle of not imposing any kind of political agenda, not interfering in the internal affairs of recipient nations and fully respecting their right to independently choose their own direction and model of development. China upholds the values of mutual respect, equality, trustworthiness, and mutually beneficial action.
An agronomist from Anhui Province demonstrates to students from various developing countries taking part in a Chinese government sponsored agricultural training program how to test pepper purity.
Assistance without political conditions, first proposed by Premier Zhou Enlai in 1964, has always been key to China’s cooperation with other developing countries. China adheres to this principle because it is the fundamental requirement of its diplomatic principle of non-interference in the internal affairs of other countries.
This principle is also based on China’s long-term experience not just of being a donor country, but also of being a developing country and once the largest recipient of foreign aid. China has learnt an important lesson in making use of foreign assistance: Foreign aid can only reach its greatest value when the recipient country includes it in its long-term national plan for development. Economic structural reform or political reform can only be successfully achieved within the bounds of the country itself and cannot be imposed externally.
That China seeks mutually beneficial results through cooperation instead of a one-way donation is another important feature of foreign assistance with Chinese characteristics.
One reason why Western countries have failed in their assistance is that they went about giving aid through a one-way channel, so they found it difficult to establish equal partnerships with some recipient countries. Western countries tend to take a hand in policy implementation, making development plans and determining development priorities for recipient countries, greatly damaging the independence of the recipients.
Some major problems are that donors put pressure on development strategies and aid management systems by making them fulfill donor requirements instead of supporting national systems.
According to the principle of creating mutual benefit through cooperation, China never views aid as a one-way donation or believes that the assistance itself will aid development. China regards foreign assistance as two-way cooperation aimed at achieving mutual development. This notion does not only help achieve equality in bilateral relationships, ensuring the independence and effective participation of recipient countries and the effectiveness of foreign assistance, but also interprets foreign aid from the perspective of two-way cooperation, which has proved to be successful in line with interdependent international relations.
China’s experience as an aid recipient shows that cooperation in foreign aid has propelled its development far more than the aid itself. With this principle of two-way cooperation, China’s foreign aid policy demonstrates great flexibility.
Aid, Trade, and Investment Combine to Aid Collective Development
China’s reputation as an emerging power in the field of foreign assistance can be attributed to its innovative combination of aid, trade, and investment. This combination, intended to maximize the usefulness of its assistance, is the summary of China’s own experience and the logical result of mutually beneficial policies of cooperation in China as a developing country within the framework of South-South cooperation.
Based on its own experience, China never assumes that aid alone can achieve development. Chinese assistance needs to be combined with trade and investment to maximize its usefulness while achieving mutual benefits through cooperation with recipient countries.
China’s “Angola model” in assistance to Africa attracted widespread attention and skepticism from international communities. China made an arrangement whereby Angola agreed to pledge future oil resources in order to fund post-war reconstruction at a time when it was lacking collateral and wallowing in insolvency.
This model was called China’s “Angola model” in assistance to Africa in a report published by the World Bank. The aspects of this model which raised concern included “the exchange of natural resources for national infrastructures” and “blurred boundaries between aid and trade, and aid and investments.”
The “Angola model” means that contracts and agreements are made on the basis of equality and mutual benefits for enterprises backed by the governments of both countries. It operates with the premise of mutual respect for national sovereignty and no interference in internal affairs. This model is a mutually beneficial choice in the interests of both parties.
The “exchange of natural resources for national infrastructures” aims to turn potential resources in Angola into a foundation for real development. Using this model, China granted concessional loans to domestic companies to enable them to invest in Angolan infrastructure, energy, and resources, creating a win-win situation by promoting economic development in Angola and also paving the way for the globalization of Chinese enterprises.
In light of similar cooperation models between China and Guinea, President Alpha Condé of Guinea was prompted to announce that African countries “welcome the involvement of China” and “feel comfortable when dealing with Chinese people.” He added that “China is Africa’s opportunity, and vice versa” and that “President Dos Santos of Angola, President Zuma of South Africa, and President Toure of Mali take the same view.”
China has introduced concessional loans as part of foreign assistance and has leveraged market forces by using aid to attract private capital to recipient countries. This combination of aid and investment is both a reflection of China’s own reform process and a response to the needs of recipient countries.
In 1992, the 14th CPC National Congress advocated establishing a socialist market economic system, and market forces have been an important factor in China’s aid policy ever since. In 1993, at the Tokyo International Conference on Africa Development, representatives from Africa stated that an increase in foreign investment is a more effective catalyst for development than traditional aid.
Then, in 1995, the Central Committee of the CPC held a conference calling for the reform of China’s aid policy within this context. After the market economy was established, enterprise became the main force behind economic activity and financial institutions now play an increasingly important role in economic affairs. The conference addressed the changing context of political and economic conditions in developing countries. African countries expressed their wish to increase economic growth and employment opportunities by getting more foreign investment involved in their economic development, so the conference encouraged Chinese enterprise to play a greater role in the delivery of aid.
After years of controversy, China’s innovative approach combining aid, investment, and trade to promote collective development is now widely recognized in international communities. The European Union has highlighted this use of blending in the current reform of its aid policy.
Focus on Aiding Infrastructure
China’s foreign aid policy has made social infrastructure in recipient countries (such as education and healthcare) a priority, but so far financial aid provided by China has mainly gone towards funding economic infrastructure in the form of interest-free loans and concessional loans.
According to a report by the World Bank, more than one third of the loans provided by China to fund African economic infrastructure were put towards the development of power supply and communications. Despite its limited foreign aid budget, China has made full use of its advanced technology and the relatively low cost of manpower to help other developing countries construct a host of infrastructure projects in areas like transportation, communications, and power supply. By the end of 2012, China had helped other developing countries build 598 economic infrastructure projects. China has prioritized economic infrastructure when providing foreign assistance, based on the development needs of recipient countries.
Poor infrastructure has long been a major roadblock to poverty alleviation, economic growth, and the promotion of regional economic integration, due to a shift in the focus of foreign assistance from Western countries. In Africa, for example, only 43 percent of the population has access to electricity – far below the world average of 82 percent. Roads are accessible to only 43 percent of rural Africans, significantly below the world average of 69 percent.
Africa is in urgent need of economic infrastructure. A properly developed infrastructure will reduce the costs of doing business, enable access to markets and advances in agriculture, facilitate trade and regional and global economic integration.
As to China’s own development experience, rapid expansion of infrastructure has been an important factor in sustaining China’s growth, encapsulated in the Chinese saying, “building roads is the prerequisite for becoming rich.” So, as a developing country itself, China is better able to understand the centrality of infrastructure to Africa’s development aims. Moreover, China has a comparative advantage in the area of infrastructure, which provides great potential for win-win cooperation and co-development.
China’s significant role in the development of infrastructure projects across Africa has been applauded by African officials. Elham Mahmood Ibrahim, the African Union Commissioner for Infrastructure and Energy said at a press briefing before the 27th AU Summit, that China and Africa are cooperating to create a win-win situation. He said: “The AU welcomes cooperation between China and Africa in the construction of infrastructure and expects more projects to be implemented in the future.”
Abdallah Hamdok, chief economist for the UN Economic Commission for Africa, commented: “Africa’s economic integration and industrialization need to be based on an efficient infrastructure system. We are very pleased to see that China has made great achievements in helping Africa to develop its infrastructure.”
Green and Open Aid Policy
Foreign assistance policy with Chinese characteristics has gained international recognition and repute, and with continuous development has become greener, more open, and more inclusive. Over the past few years, China has played an important role in promoting the UN 2030 Agenda for Sustainable Development and has become a prominent part of global governance.
In face of the challenges posed by climate change, China has adjusted its aid policy to include environmental protection. At the UN conferences on climate change held in Cancun, Durban, and Doha, China shared its experience with energy conservation and emissions reduction. It also pledged to increase assistance in the environmental sector to the least developed countries, small island nations, and African countries, in a move to help them develop clean energy and improve their capacity to address climate change.
In 2015, China announced that it would dedicate RMB 20 billion towards setting up the China South-South Climate Cooperation Fund to support other developing countries in combatting climate change, enhancing their capacity to access Green Climate Fund. China has helped developing countries improve their ability to deal with climate change through financing environmentally-friendly projects and providing supplies.
Two of the 19 Ghanaians that signed up in 2016 for a two-month training course in Qingshen County, Sichuan Province, to learn how to make high-quality bamboo products.
Great emphasis was also placed on cooperation between China and other developing countries in climate change research. From 2010 to 2012, China carried out technical cooperation with countries like Ethiopia, Burundi, and Sudan, and helped these countries improve their utilization and management of solar power, hydro power, and other clean energy sources. China also organized 150 training sessions on environmental protection and climate change for over 120 developing countries, providing training to over 4,000 officials and technical personnel in such areas as the development of low-carbon industry, energy policies, and environmental protection.
China’s foreign aid policy has become increasingly transparent and open. The country has published white papers on foreign aid (first in 2011 and then in 2014) detailing its concepts for financial aid, financial resources for foreign assistance, and the distribution of the aid.
China has adjusted its aid policy in an increasingly open-minded manner, all the while rendering support to assistance programs initiated by multilateral development organizations, participating in international exchanges for development cooperation and increasing international cooperation in foreign assistance.
China has also jointly held training programs, shared experience on development cooperation, and piloted trilateral cooperation, so as to effectively learn from international experience, improve the efficiency of its assistance, and improve the form this assistance takes.
JIN LING is an associate research fellow in the Department for European Studies at the China Institute of International Studies.