You are here

The Rights and Wrongs of China’s Aid Policy

Gunjan Singh is Research Assistant at the Institute for Defence Studies and Analyses, New Delhi. Click here for detailed profile
  • Share
  • Tweet
  • Email
  • Whatsapp
  • Linkedin
  • Print
  • May 04, 2011

    Foreign aid forms an important part of international diplomacy. Almost all countries use foreign aid to extend their international influence. China, too, has been using foreign aid for diplomatic and other purposes for a long time. Today, aid is an essential part of the Chinese diplomatic engagement with small developing countries. The Chinese Government recently released a white paper on its foreign aid policy, which indicates that China is bound to extend its aid to more countries and in new areas with the increase in its economic might.1 Even as China tries to extend its soft power through aid, it has other objectives as well. China’s aid challenges the aid policy of Western states.

    The primary argument of the white paper is that the People’s Republic of China (PRC) provides aid to various countries on the basis of ‘friendship’ alone. China has been criticised by the international community for using money to expand its influence in the oil-rich countries. The white paper denies this accusation.

    In addition, in its dealings with Sudan, Myanmar and Zimbabwe, China has been criticised for strengthening non-democratic, violent regimes. However, in its white paper the Chinese Government terms its relations with these countries as instances of ‘south-south cooperation’. The white paper states that “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.”.

    The white paper states that China’s aid diplomacy began when it first provided economic and financial assistance to Vietnam and North Korea in 1950. By 2009, China has provided aid to a total of 161 countries apart from 30 international organisations. The total amount which China has provided as aid to various countries is $39 billion.2 In addition to financial assistance, China has also been sending medical teams to various countries. Other instances of Chinese aid have been during the Asian Tsunami, during the earthquakes in Pakistan and after a number of other natural disasters.

    The other prominent guiding principle for China’s aid policy is the ‘One-China Policy’ and the diplomatic stifling of Taiwan. China has used aid to sway countries that recognise Taiwan in its favour. Countries in Africa and Latin America have been receiving generous aid from both China and Taiwan in the last decade.

    Aid diplomacy has become an important tool of Chinese soft power projection as well. Even though United States and Japan are still the largest aid providers, China’s aid diplomacy is also its new strength. What sets the Chinese aid apart from those of Japan and United States is its willingness to interact with non-democratic states and states with major human rights violations. According to the white paper, the aid provided by China, based on the principle of ‘non-interference in internal affairs’, helps countries in their economic development. Therefore, it is more than clear that China uses the Five Principles of peaceful existence to justify its dealings with rogue regimes.

    In fact, a study on the flow of aid has highlighted that most of the money has gone to benefit rulers and has not been used for providing benefits to the people. The major portion of Chinese aid has been utilised for infrastructural development and not for improving governance that benefits the common people. The money which China has been providing for education and other aspects is a very small fraction of the total amount. The majority of the aid is still diverted towards securing resources and energy. Given these examples, more was expected from the white paper. However, the paper only justifies China’s interest based approach.

    It is clear from the white paper that the PRC provides aid according to its ‘national interest’. The white paper appears to be an attempt to justify the ‘Chinese characteristics’ of its aid policy, rather than suggesting any changes from the past. Energy interests and the promotion of One-China Policy are the main drivers of Chinese aid. The white paper can also be read as an acceptance of China’s projection of its position in the international order. Till date, China had attempted to ‘hide its strength’ but the shift in the international economic order, where China today is the second largest economy, calls for some change. China is happy in the unabashed justification of its hitherto criticised aid policy and will ignore the criticisms as long as the means justify its national ends.