The Development Channel is pleased to launch a new feature, Question of the Week. These posts will review important questions and controversies in global development by providing background information and links to a full spectrum of analysis and opinion. Today’s post is the first in a series on Chinese aid and investment in Africa. This week, we cover the South-South philosophy underlying Chinese involvement on the continent, as well as the measurement issues that make China’s activities difficult to gauge. Next week’s post will tackle the question of who benefits—China or Africa itself. Enjoy the posts and please give us your thoughts on this topic—and other potential Questions of the Week—in the Comments section below.
While foreign aid is often pictured as flowing from countries in the global North to countries in the global South, this model has been changing as emerging countries themselves give growing amounts of aid. China is at the forefront of this “South-South” aid movement, particularly in Africa, where it gave around 46 percent of its aid in 2009. In an April 2011 white paper issued by China’s Information Office of the State Council, the Chinese government explains that China in fact has a history of giving assistance to other countries as early as the 1950s, and that its first project in Africa was the Tanzania-Zambia Railway in the 1970s. While Chinese aid has significant potential for poverty alleviation and development in Africa, it has also faced allegations of being extractive and meant to benefit China more than Africa and its people. This question provokes regular and vigorous debate. Two weeks ago, for example, noted economist and author Dambisa Moyo wrote an op-ed rejecting common criticisms of Chinese involvement in Africa, prompting a response from Jolyon Ford of Oxford Analytica.
Officially, China characterizes itself as a developing country aiding other developing countries, stating in its 2011 white paper that “China’s foreign aid falls into the category of South-South cooperation and is mutual help between developing countries.” In The Dragon’s Gift: The Real Story of China in Africa, American University professor Deborah Bräutigam explains that “Chinese aid and economic cooperation programs emphasized infrastructure, production, and university scholarships at a time when the traditional donors downplayed all of these.” Bräutigam also argues that Chinese aid was crafted to create an (ostensibly) win-win economic situation for China and the continent, noting that “subsidies for productive joint ventures were supposed to create employment, local capacity, and demand for Chinese machinery and equipment.” Bräutigam asserts that China has particular credibility with African nations in the development field because it, too, is a developing country.
In Africa: Altered States, Ordinary Miracles, longtime journalist Richard Dowden, now president of the Royal African Society, highlights another aspect of China’s appeal for Africa, remarking that “in their formal, stylized way the Chinese emphasize the best of Africa, never referring to its failures and explicitly denouncing ‘Afropessimism.’ They ignore the aid agency images of poverty and war that African rulers so resent.” Dowden contrasts the difference between official Chinese websites, which emphasize cooperation between China and Africa, and “Britain’s Department for International Development websites on Kenya and Ethiopia, which begin by describing them as the poorest countries in Africa.”
Chinese officials enthusiastically describe their philosophy and defend their aid to Africa against Western criticisms. Recently, Chinese Ambassador to Malawi Pan Hejun rebuked Western censure, saying, “some Western media say China is in Africa only for minerals and oil. It’s not true. We want to have broader co-operation in other fields like health and education. Malawi has no minerals and no oil, but it is one of the African countries we want to establish a relationship with.” Apparently addressing criticisms over unconditional aid, he also said, “it’s not China’s policy to make regime change… You have no right to interfere with the internal affairs of a peaceful country and its set of laws.” Upon the release of China’s foreign aid white paper last year, Chinese Vice Minister of Commerce Fu Ziying declared, “it is nonsense to say we are there only for the resources.” He also noted that foreign aid programs have required sacrifice on China’s part, too, as over 700 Chinese workers have died working on Chinese development projects in Africa since 1950.
It is important to note that foreign aid from China is difficult to define and quantify. A recent working paper from the Center for Global Development underscores the uncertainty, saying that “China’s [annual] aid estimates range anywhere from $1.5 to $25 billion; if the upper estimate is accurate, it ranks as the second largest donor after the United States.” In its own white paper, China says that it has given $38.83 billion in various forms of aid through 2009, aid that increased at an average annual rate of 29.4 percent from 2004 to 2009. A Guardian article, though, notes that the white paper “falls short on offering any detailed information on aid flows.”
The AidData blog explains how Chinese aid often falls outside the traditional OECD definition of Official Development Assistance (ODA), making it difficult to quantify. In a March 2012 working paper, the International Monetary Fund (IMF) highlights the specific difficulties of measuring foreign aid from BRIC countries, noting that “most BRICs include all development support (including loans that have below-market interest rates) that is designed to help countries grow, while the OECD definition excludes nonconcessional assistance.” The AidData blog also mentions that unlike many donor countries’ aid projects, Chinese aid is “carried out by embassies and consulates rather than development agencies.” Indeed, those evaluating Chinese aid run into an overlap between projects that generate revenue for China and projects meant as development assistance, raising questions about what should count as aid. American University professor Deborah Bräutigam clarifies the nature of this ambiguity in a 2011 paper, noting that “…the lion’s share of China’s officially supported finance is not actually official development assistance (ODA)… Export credits, non-concessional state loans, or aid used to foster Chinese investment do not fall into the category of ODA. China’s cooperation may be developmental, but it is not primarily based on official development aid.”
What Do You Think?
This is the first Question of the Week post about Chinese involvement in Africa. Next week, the Development Channel will tackle the question of whether African countries or China itself benefits more from Chinese aid and investment. In the meantime, please let us know what you think. Does China’s involvement lead to positive outcomes or do its drawbacks unnecessarily impede development? Are the costs to Africa too high? Are its critics unjustified? Please use the Comments section below, and check back for the new post next week.