China’s Foreign Aid

IV. Distribution of Foreign Aid

The recipients of China’s foreign aid are mainly low-income de-veloping countries. Regarding the distribution of its foreign aid, China sets great store by people’s living conditions and economic development of recipient countries, making great efforts to ensure its aid benefits as many needy people as possible.

Geographical Distribution

The geographical distribution of China’s foreign aid shows a comparatively even coverage. The recipients cover most developing countries in Asia, Africa, Latin America, the Caribbean, Oceania and Eastern Europe. About two-thirds of China’s aid always go to the least developed countries and other low-income countries. By the end of 2009, China had aided 161 countries and more than 30 international and regional organizations, including 123 developing countries that receive aid from China regularly. Of them, 30 are in Asia, 51 in Africa, 18 in Latin America and the Caribbean, 12 in Oceania and 12 in Eastern Europe. Asia and Africa, home to the largest poor population, have got about 80% of China’s foreign aid.

Figure 2 Geographical Distribution of China’s Foreign Aid Funds in 2009

Figure 3 Distribution of China’s Foreign Aid According to the Income Level of Recipient Countries in 2009

Major Fields

China’s foreign aid projects are oriented to agriculture, industry, economic infrastructure, public facilities, education, and medical and health care, with the focus on improving recipient countries’ indus-trial and agricultural productivity, laying a solid foundation for their economic and social development, and improving basic education and health care. In recent years, coping with climate change has become a new area in China’s foreign aid.

Agriculture

China makes agriculture, rural development and poverty reduc-tion in developing countries priorities of its foreign aid. The agricultural aid mainly covers building farms, agro-technology demonstration centers, and experiment and promotion stations of agro-technology; constructing farmland irrigation and water-conservancy projects; supplying agricultural machinery and implements, farm produce processing equipment and related agricultural materials; dispatching agro-technicians and senior agricultural experts to pass on agricultural production technologies and provide consultations on rural development, and training agricultural personnel for recipient countries. Agricultural projects aided by China have promoted agricultural development in recipient countries, increased their output of grain and cash crops, and provided raw materials for the development of their light industry. In Guinea-Bissau, Chinese agricultural experts helped build 11 demonstration areas for paddy rice, with a total growing area of 2,000 ha. They bred 530 tons of fine strains of rice, which were planted in areas totaling 3,530 ha. Several of the rice strains produced an output three times or more than the original output. In 2008, the Chinese agricultural experts were awarded first prize for scientific and tech-nological progress by the Agricultural Department of Guinea-Bissau. Chinese experts assisted in the operation of a hybrid rice development and demonstration center in Madagascar, where 34 strains of Chinese hybrid paddy rice were grown, with average per-ha. output of eight tons, about two to three times the average output of local paddy rice. In the 1960s and 1970s, after succeeding in helping Mali grow sugarcane, China went on to help the country establish sugarcane farm and sugar mills, enabling Mali to grow and process sugar by itself for the first time ever. This sugar-making corporation is playing an important role in Mali’s economy. In the 1980s, China helped Tunisia construct the Medzerdah-Cap Bon Canal, which enabled the transfer of water from west to east for farmland irrigation, laying a solid foundation for agricultural development in Tunisia.

China has been increasing its aid for agriculture and grain production in particular. In recent years, food security has become a global issue, and China has adopted a series of measures to address this problem in its foreign aid. For instance, at the UN High-Level Meeting on the Millennium Development Goals in 2010, China pledged to establish 30 demonstration centers for agricultural technologies in other developing countries, dispatch 3,000 agricultural experts and technicians to these countries, and invite 5,000 agricultural personnel from these countries to China for training.

By the end of 2009, China had aided 221 agricultural projects in other developing countries — 35 farms, 47 agro-technology experi-ment and promotion stations, 11 animal husbandry projects, 15 fisheries projects, 47 farmland irrigation and water-conservancy projects, and 66 other types of agricultural projects. On top of that, China had provided a large amount of agricultural equipment and materials to them.

Industry

Industrial aid was an important part of China’s foreign aid in its early stage. From the 1950s to the 1970s, China helped many new-ly-independent Asian and African countries undertake a number of industrial projects. These projects, many of them first ever of their kind in these countries, laid the foundation for their industrial development. Industrial aid increased rapidly in the 1970s, con-stituting an important part of China’s complete projects aid to other countries at that time. Since the mid-1980s, China gradually reduced its aid in this regard, as many developing countries stepped up privatization in the industrial sector. The industrial projects established with China’s help have played an active role in promoting production and economic development, creating jobs, increasing tax revenues and invigorating markets in the recipient countries. By the end of 2009, China had helped developing countries construct 688 industrial production projects, covering light, textile, machinery, chemical, metallurgical, electronic, construction materials, and energy industries. Of these, the Hama Textile Mill in Syria, the Cement Factory in Rwanda, the Rioja Cement Factory in Peru, the Agriculture Machinery Factory in Myanmar and the Loutété Cement Factory in the Republic of Congo are always profitable. They employ a large number of local people and yield sound economic and social benefits.

Economic Infrastructure

Economic infrastructure construction is always an important part of China’s foreign aid. Despite its limited foreign aid funds, China has made full use of the mature technologies and relative low cost of manpower to help other developing countries construct a host of infrastructure projects in transportation, communication, power supply, etc. By the end of 2009, China had helped other developing countries build 442 economic infrastructure projects, such as the Sana’a-Hodeida Highway in Yemen, the Karakoram Highway and Gwadar Port in Pakistan, the Tanzania-Zambia Railway, the Belet Uen-Burao Highway in Somalia, the Dry Dock in Malta, the Lagdo Hydropower Station in Cameroon, Nouakchott’s Friendship Port in Mauritania, railway improvement in Botswana, six bridges in Bangladesh, one section of the Kunming-Bangkok Highway in Laos, the Greater Mekong Sub-region Information Highway in Myanmar, the Shar-Shar Tunnel in Tajikistan, the No.7 Highway in Cambodia, and the Gotera Interchange in Addis Ababa of Ethiopia. These projects have helped improve the environment of life and production for the local people, and create better conditions for the development of the local economy and society.

Public Facilities

Public facilities built with aid from China in other developing countries mainly include municipal utilities, civilian buildings, wells for water supply, conference centers, sports venues, culture venues, and facilities for scientific, educational and medical care purposes. By the end of 2009, China had helped other developing countries build 687 public facilities of various kinds. The major ones include the Bandaranaike Memorial International Conference Hall in Sri Lanka, the Friendship Hall in Sudan, the National Theater of Ghana, the Cairo International Convention and Exhibition Center in Egypt, the Radio and Television Broadcast Center in Comoros, the International Convention Center in Myanmar, the Moi International Sports Center in Kenya, the Multi-Functional Sports Stadium in Fiji and the Tanzania National Stadium. They have all become centers for social, political and cultural activities as well as landmark buildings. Some public welfare facilities, including the Capital Water Supply Project in Nouakchott, Mauritania, the Well-Drilling Project in Cambodia, the Water Supply Project in Chalinze, Tanzania and the Water Supply Project in Zinder, Niger, low-cost housing projects in Angola and Surinam, have played an active role in improving the living condi-tions of local poor people.

Education

The Chinese government always attaches great importance to aid in education for other developing countries. Most China’s foreign aid for education is spent in building schools, providing teaching equipment and materials, dispatching teachers, training teachers and interns from other developing countries and offering government scholarships to students from other developing countries to study in China.

In the 1950s, China began to provide financial support to stu-dents from other developing countries coming to China to study, and aid Asian and African countries to build their own colleges and tech-nical schools, providing them with teaching instruments and laboratory equipment. Since the 1960s, China has dispatched Chinese teachers to other developing countries. In the 1970s and 1980s, at the request of some countries, China began to train middle- and high-level technicians and managerial personnel from these countries, who would work for complete projects undertaken with Chinese aid, including the Tanzania-Zambia Railway, the Friendship Port in Mauritania, a coal mine in Tanzania and a textile factory in Guyana. In recent years, China has strengthened its aid for education in other developing countries, helping them build nearly 100 rural primary schools, increasing government scholarships and the number of teachers who come to receive training in China, dispatching more Chinese teachers abroad to help build up the weak academic disciplines, and enhancing cooperation with other developing countries in vocational, technical education and distance education. Educational aid from China has helped recipient countries train a large number of qualified personnel in the fields of education, management, and science and technology, and rendered intellectual support for their social and economic development.

By the end of 2009, China had helped other developing countries build more than 130 schools, and funded 70,627 students from 119 developing countries to study in China. In 2009 alone, it extended scholarships to 11,185 foreign students who study in China. Furthermore, China has dispatched nearly 10,000 Chinese teachers to other developing countries, and trained more than 10,000 principals and teachers for them.

Medicine and Public Health

Medical aid plays an important role in China’s foreign aid. It mainly covers building hospitals and medical care centers, and establishing malaria prevention and treatment centers; dispatching medical teams; training medical workers; and providing medicines and other medical materials. By the end of 2009, China had aided other developing countries to build more than 100 hospitals and medical care centers, and provided them with a large amount of medical equipment and medicines. At present, over 30 hospitals are under construction with the help of China.

Many hospitals built with aid from China, such as the Ta’izz Revolution Comprehensive Hospital in Yemen, and hospitals in the Central African Republic, Guinea-Bissau, Zimbabwe, Chad and Laos, have contributed much to solving local people’s difficulties in getting medical service. In recent years, China has strengthened exchanges and cooperation with developing countries, especially African coun-tries, in the prevention and treatment of infectious diseases like AIDS and malaria, and in the research and application of traditional medicines. China has also trained a large number of medical workers for other developing countries. In the last three years, China has built 30 malaria prevention and treatment centers in African countries, and provided artemisinin anti-malaria medicines worth 190 million yuan. China’s aid has made a positive contribution to the development of medical undertakings, improvement of the medical care infrastructure and advance of medical treatment technologies in the recipient countries.

Clean Energy and Coping with Climate Change

China was one of the first countries which have developed clean energy sources such as bio-gas and small hydropower stations. Thus, it has advantages in this regard when it comes to foreign aid. At the beginning of its foreign aid efforts, China helped developing countries in Asia and Africa in utilizing local water resources to build small- and medium-sized hydropower stations and projects of power transmission to meet the needs for electricity by local people as well as by agricultural and industrial production. In the 1980s, by working with relevant agencies of the United Nations, China imparted bio-gas technologies to many developing countries. Meanwhile, China passed on bio-gas technologies to Guyana and Uganda by way of bilateral aid. China’s efforts achieved the expected results and helped the recipient countries reduce their dependence on imported fuels.

China has steadily increased aid in coping with climate change. In recent years, as the problem of global warming has been getting worse, China has expanded the scope of relevant aid to other countries. China has carried out cooperation with Tunisia, Guinea, Vanuatu and Cuba in utilizing bio-gas, assisted in the building of hydropower stations in Cameroon, Burundi and Guinea, and cooperated with Mongolia, Lebanon, Morocco and Papua New Guinea in exploring solar energy and building wind-power stations. In addition, China has held training courses on clean energy sources and climate change for other developing countries. From 2000 to 2009, China held 50 training workshops attended by more than 1,400 people from other developing countries on the development and use of renewable resources such as bio-gas, solar energy, and small hydropower stations, as well as forestry management, and de-sertification treatment and prevention.

V. Management of Foreign Aid

The decision-making power in China regarding foreign aid lies with the central government. Ever since the 1950s, with the development of foreign relations and foreign aid, agencies at various levels of the Chinese government responsible for the management of foreign aid have been gradually established and improved, and management of projects has been gradually strengthened.

The Ministry of Commerce of the People’s Republic of China is the administrative department authorized by the State Council to oversee foreign aid. It is responsible for the formulation of foreign aid policies, regulations, overall and annual plans, examination and approval of foreign aid projects and management of the project execution. The Executive Bureau of International Economic Cooperation, China International Center for Economic and Technical Exchanges, and Academy of International Business Officials affiliated to the Ministry of Commerce are entrusted with tasks of managing the implementation of complete projects and technical cooperation projects, material aid projects and training programs connected with China’s foreign aid. The Export-Import Bank of China is responsible for the assessment of projects with concessional loans, and the allocation and recovery of loans. Chinese embassies or consulates abroad are in charge of the direct coordination and management of foreign aid projects in the relevant countries. The local commercial administration departments are required to cooperate with the Ministry of Commerce to deal with affairs related to foreign aid within its jurisdiction.

In providing foreign aid, the related departments of the Chinese government keep in close contact and cooperate with each other. In drafting foreign aid programs and foreign aid funds plans for each country, the Ministry of Commerce communicates regularly with the Ministry of Foreign Affairs, Ministry of Finance and the Export-Import Bank of China to seek their suggestions. Some other departments of the State Council are responsible for or participate in the management of foreign aid programs that require better professional expertise. In order to strengthen the coordination of the departments concerned, the ministries of commerce, foreign affairs and finance officially established the country’s foreign aid inter-agency liaison mechanism in 2008. In February 2011, this liaison mechanism was upgraded into an inter-agency coordination mechanism.

VI. International Cooperation in Foreign Aid

China’s foreign aid is provided mainly through bilateral channels. At the same time, China also has done its best to support and participate in aid programs initiated by organizations like the United Nations, and has actively conducted exchanges and explored practical cooperation with multilateral organizations and other countries in the field of development assistance with an open-minded attitude.

Since 2005, China has carried out exchanges in development as-sistance with many international multilateral organizations and countries. It has sent delegations to participate in conferences and dialogues on international development and cooperation such as the UN High-Level Meeting on Financing for Development, UN High-Level Meeting on the Millennium Development Goals, UN Development Cooperation Forum, High-Level Forum on Aid Effectiveness, Heiligendamm Process Dialogue between G8 and the five most important emerging economies, and WTO Global Review on Aid for Trade, to strengthen its communication and exchanges with other aid providers and promote South-South cooperation.

In addition to developing bilateral aid, China gets involved in trilateral and regional cooperation with some multilateral organizations and countries in capacity building, training and infrastructure construction that give full play to the advantages of all participants. Positive results have been achieved. In 1981, China worked with the UNDP (United Nations Development Program) to implement the Technical Cooperation among Developing Countries (TCDC) program in China, it has trained more than 6,000 technicians for other developing countries in more than 20 years. Since 1996, China has cooperated with UNFAO (United Nations Food and Agriculture Organization) for sending Chinese agricultural experts to developing countries. By the end of 2009, China had sent more than 700 agricultural experts and technicians to Africa, the Caribbean and the Asia-Pacific area. In the field of training, China has conducted effective cooperation with multilateral organizations such as the World Bank, the UN Conference on Trade and

Development, the UN Industrial Development Organization and Singapore. Within the framework of the Greater Mekong Sub-regional cooperation, China, together with Thailand and the Asian Development Bank, raised funds to build the Laos section of the Kunming-Bangkok Highway, which was opened to traffic in March 2008. At present, China, Thailand, Laos and the Asian Development Bank are working together to build a bridge over the Mekong River for the Kun-ming-Bangkok Highway.

At present, the scope of international aid for development is being gradually expanded. South-South cooperation is developing rapidly, becoming an effective and beneficial supplement to South-North cooperation. Under the framework of South-South cooperation, China will work with all parties concerned to conduct complementary and fruitful trilateral and regional cooperation on the basis of respecting the needs of recipient countries and jointly promote the process of global poverty alleviation.

Conclusion

Currently, the environment for global development is not favor-able. With the repercussions of the international financial crisis con-tinuing to linger, global concerns such as climate change, food crisis, energy and resource security, and epidemic of diseases have brought new challenges to developing countries, aggravating the imbalance in the development of the global economy, and widening the gap between North and South, rich and poor. The international community should strengthen cooperation and jointly rise to the challenges facing development.

Against this background, China has a long way to go in providing foreign aid. The Chinese government will make efforts to optimize the country’s foreign aid structure, improve the quality of foreign aid, further increase recipient countries’ capacity in independent development, and improve the pertinence and effectiveness of foreign aid. As an important member of the international community, China will continue to promote South-South cooperation, as it always has done, gradually increase its foreign aid input on the basis of the con-tinuous development of its economy, promote the realization of the UN Millennium Development Goals, and make unremitting efforts to build, together with other countries, a prosperous and harmonious world with lasting peace.