China's foreign aid: New facts and figures

8 July 2014 

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China's foreign aid program is now the sixth largest in the world. Only the UK, US, Germany, France and Japan provided more last year.

This is according to a new paper from the JICA Research Institute estimating China's foreign aid program from 2001 to 2013. Their calculations put China's total official development assistance (ODA) at US$7.1 billion in 2013. (China's aid budget is growing rapidly, so this fits with the US$6.4 billion figure reported in China Daily in April 2013.)

For the first time, we have a well-informed estimate that includes bilateral aid, multilateral aid, concessional loans, and aid that sits outside the main budget (like scholarships administered by the Ministry of Education). As China-Africa expert Deborah Brautigam has said, 'lead author Naohiro Kitano and his colleague Yukinori Harada have done a superb job. The methodology is carefully worked out and fully explicated.'

The paper highlights some interesting facts: 

Most Chinese aid is provided bilaterally. Only 15% is given as multilateral aid. 

Concessional loans, provided by China Eximbank, now make up nearly half of the total aid. 

There are more than 40 departments involved in some way. 

Given the lack of transparency in China's aid program, much is still (educated) guesswork. This new paper won't be perfect. But it is the best we've seen to date.

In fact, Japanese researchers and practitioners are at the forefront of work on understanding Chinese aid. This makes sense, as many Japanese officials have experience delivering aid to China (Japan was the largest donor to China in the 1980s), and there are many similarities between the Chinese and Japanese aid systems. A Study of China's Foreign Aid: An Asian Perspective, a 2013 study edited by Yasutami Shimomura and Hideo Ohashi, covers the history, principles, and implications of Chinese aid. But the real value of this collection is the information it provides about the mechanisms, tools, and institutions involved in the aid program. Since much of China's aid system is still a 'black box', and misperceptions are still rife, research like this is important. I'd encourage anyone interested in China's 'go global' policy, the links between Chinese aid and investment, or the role of China Eximbank and Chinese companies, to dip into it.