A New Phase in China’s Foreign Aid?

Filed in Economic Development, Geopolitics by on March 4, 2014 0 Comments

China’s foreign aid has a history of over 60 years, beginning soon after the establishment of the People’s Republic of China in 1949. Liu Xiaoyun of the China Agricultural University in Beijing has divided this history into three phases that may be summarized as follows:

  • Between 1950 and 1974, China foreign aid’s priority was the export of China’s communist ideology. It initially sought to promote influence within Asia during the early 1950s, then extended into Africa after 1955.
  • After 1974, especially following the death of Mao Zedong in 1976, China’s priorities shifted to economic reform and opening. Aid to Africa declined while China pursued direct foreign investment and trade with the West.
  • Beginning in 1991, and in response to a prolonged Western backlash to the violent suppression of protestors in the Tiananmen Square Incident, China’s foreign aid refocused on Africa and adjusted to “financial aid and technical assistance with integrated objectives.” By 2009 China became the African continent’s number one trading partner.

A New Phase

A fourth phase in China’s foreign aid may have already emerged, however, concurrently with China’s rapid economic development since 2000. During the first decade of this century, China’s buildup to successfully host the 2008 Olympics was a significant psychological boost for country, which was reinforced by the international economic crisis that occurred later in 2008. As a result of the economic crisis, China benefitted both in relative economic and psychological terms. As China’s confidence rose, some Westerners even speculated that a trend to replace the Washington Consensus with a Beijing Consensus had begun.

Since his rise to power, President Xi Jinping has strengthened their beliefs and diversified China’s foreign aid approach within its broad perspective of foreign aid, including the following areas:

  • trade
  • investment and financing
  • agriculture and food security
  • infrastructure construction
  • livelihood and capacity building, including emergency humanitarian aid
  • promotion of cooperation under multilateral frameworks, such as the African Union, East African Community, and Community of West African States, the World Bank and the United Nation, as well as the Forum on China-Africa Cooperation (FOCAC)

What this means for the future of international development is the subject of debate and worry as some see China acting like a new colonial power in the developing world, while others seek to develop a better understanding of China’s ground truth aid statistics. Kanava Global ConnectionTM will continue to explore China’s foreign aid structure, policies, and contradictions in a series of forthcoming posts.

About the Author ()

Susan Puska is a retired U.S. Army Colonel turned entrepreneur with over 25 years experience in logistics operations, who also served as China Foreign Area Officer. She led Joint Logistics Support operations to over 30,000 Cuban and Haitian refugees and supported humanitarian medical assistance in Mongolia. She is a noted China expert who has written on political-military, logistics modernization, crisis management, and research and development topics. Her forthcoming publication is 'Commissars of Weapons Production: The Chinese Military Representative System,' with Debra Geary and Joe McReynolds, in "Forging China's Military Might: A New Framework for Assessing Innovation," edited by Tai Ming Cheung.

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