China’s role in Development Aid

China’s announcement of the establishment of the International Development Cooperation Agency indicates that development is an important State issue that deserves high-level specialized attention and institutional support.

State Councillor Wang Yong said that the aim of setting up an international development cooperation agency is to better coordinate foreign aid and promote its ‘Belt and Road’ initiative, which seeks to connect China with the rest of Asia, Europe and Africa.

The responsibilities of the new agency will include the formulation of policies on foreign aid, as well as granting aid and overseeing its implementation. The new agency will work directly under the State Council, China’s cabinet, and will combine the overseas aid related responsibilities of the ministry of commerce and foreign affairs.

“This will allow aid to fully play its important role in great power diplomacy… and will better serve the building of the ‘belt and road’,” Wang told parliament.

However, the official data that China has provided of its foreign aid program has been scarce in recent years. The most recent documentation was released in 2014, and reveals that, between 2010 and 2012, more than half of China’s foreign aid of more than $14 billion went to Africa, underscoring Beijing’s interest in the continent, which is rich in essential resources to fuel China’s economy. The report in question did not provide any breakdown of aid recipients or any yearly figures. In 2011, China put its total foreign aid over the past six decades at 256.29 billion yuan ($40.51 billion).

Much of China’s overseas finance is made in the form of loans or export credits, which allow infrastructure-for-resource deals. According to the China Daily, this approach gives China an advantage over the United States in the continent.

“China has been working for years to try to meet Africa’s needs, helping African countries build railways, bridges and ports. That is why most African countries have sought to forge a partnership with China,” the newspaper said.

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