Foreign aid with Chinese characteristics, as told in Govt whitepaper
South-South Cooperation, the BRI, sharing governance experience, and potential domestic backlash
Why does the obscure terminology of South-South Cooperation keep being mentioned? It’s there for three reasons.
The relationship between foreign aid and the BRI ultimately depends on what BRI entails.
Text on sharing governance experience, better described as sharing technical experience.
The biggest push back may be at home, Beijing is expected to remain cautious.
As your host mulls over the part two of China-Africa relationship deep dive (Part one here), China’s State Council on Sunday released a heavyweight white paper on the country’s international development cooperation.
Full text in Chinese and English.
The paper, titled "China's International Development Cooperation in the New Era", will certainly be consequential as it outlined China’s blue print for extending foreign aid for the foreseeable future.
Recognizing the importance of the white paper, China-Africa relationship is being put on the back burner for now and this newsletter will focus on the 26000-characters long paper instead.
First, let’s take a look at the title. The paper defined “International Development Cooperation“ as “China’s bilateral and multilateral efforts, within the framework of South-South cooperation, to promote economic and social development through foreign aid, humanitarian assistance, and other means.“
The keyword here is South-South Cooperation, which according to wikipedia “is a term historically used by policymakers and academics to describe the exchange of resources, technology, and knowledge between developing countries.”
By defining China’s foreign aid as under the structure of South-South Cooperation, China is stressing that China is still a developing country, and that any foreign aid it gives out should be seen as a developing country helping out another, instead of a developed country giving handouts to poor countries.
There are plenty of language throughout the paper that comes back to this point. For instance, the first sentence of the paper reads:
China is the largest developing country in the world.
In Chapter one a paragraph is dedicated to South-South cooperation.
In spite of China's tremendous achievements, two realities have not changed: China is in the primary stage of socialism and will remain so for a long time to come, and China is still the world's largest developing economy. China's development cooperation is a form of mutual assistance between developing countries.
Your host would like to just note that these languages may be designed to serve three purposes:
To lower the expectation of recipient countries. As China’s image as an economic powerhouse grew, so has the number of aid requests it receives. Your host have heard of mumblings from rank and file foreign service officers that complain about the pressure to give out relief.
To sooth domestic audience. This point will be expanded in the last part of this news letter.
To reduce the wariness of Western observers. Let’s face it, as the new kid on the block, whatever China does is likely to be viewed with suspicion from Western capitals, and the message to them is that China get it is a developing country and is not trying to bump anyone out of their seats.
The above said, the paper gave a brief summary of the aid China gave out between 2013 and 2018, they include:
*A total of 270.2 bln yuan (41.7 bln USD in today’s exchange rate) for foreign assistance in three categories－grants, interest-free loans, and concessional loans.
*The construction of 423 complete projects, with the focus on infrastructure and agriculture.
*890 deliveries of goods and materials to 124 countries and regions, most of which comprised mechanical equipment, inspection equipment, transport vehicles, medicine and medical devices.
*414 technical cooperations in 95 countries mainly covering industrial production and management, agricultural planting and breeding, culture and education, sports and training, medical and health care, clean energy development, and planning and consulting.
*More than 7,000 training sessions for foreign officials and tech personnels, with an outreach of 200,000 people.
*More than 20,000 young volunteers and volunteer Chinese-language teachers were dispatched to work in over 80 countries around the world.
*Extended emergency humanitarian assistance to 60 countries.
*4.18 billion yuan of debts involving 98 mature interest-free loans to least developed countries, heavily indebted poor countries, and landlocked and small island developing countries were canceled.
*By the end of 2019, 27,484 medical workers were dispatched to 72 countries and regions in 1069 groups.
The paper also mentioned a number of pledges Chinese President Xi Jinping made on various occasions promising more resources for foreign aid.
The paper also included 43 mentions of the BRI (一带一路)，and devoted an entire chapter to discussing how China’s foreign aid program “promote high-quality Belt and Road cooperation“.
It then listed five areas where Chinese foreign aid have helped promote the BRI, namely
1. Enhancing Policy Coordination
2. Strengthening Infrastructure Connectivity
3. Promoting Unimpeded Trade
4. Deepening Financial Integration
5. Fostering Closer People-to-People Ties
With so much attention and suspicion swirling around the BRI, it’s worthwhile to examine the relationship between China’s foreign aid and the BRI.
Stella Hong Zhang, who observes China on twitter, tweeted an insightful thread on the white paper which your host think is very helpful in gaining perspective on the white paper.
One point she made regarding the BRI was that the white paper suggested “foreign aid and other development cooperation will be coordinated with the overall BRI agenda, and there will be more top-down control rather than allowing companies to drive the aid and loan allocation based on their commercial interests.”
On this point your host would like to share a slightly different opinion, based on personal observation and understanding of the BRI.
Since the term was coined in 2013, the BRI was quickly promoted to the status of national strategy, and has since become a face of China’s outreaching efforts.
The scope of BRI has been viewed, at least in some quarters, as vague, broad and constantly expanding. In practice, many government departments, private enterprises and individuals claim their respective outreaching or cooperations with foreign parties as part of the BRI, to few public objections from Beijing. In the process, many successful bilateral or multilateral cooperation projects were gradually incorporated into the umbrella of BRI in more formal occasions, for example by way of being included in official stock-taking of BRI achievements. The practice, in effect, continues to expand or rather define BRI in an evolving fashion.
As a result, despite being originally an economic initiative, the BRI now encompasses a host of themes, as the white paper puts it, it is now “a path towards peace, prosperity, opening up, innovation, green development, cultural exchanges, and clean government.”
For anyone familiar with the Chinese government’s way of doing business, this approach to the BRI is but another example of a pattern of placing practice before theory.
What’s the name of this approach? You’ve guessed it, Crossing the River by Feeling the Stones.
Returning to the subject of foreign aid, your host believe that the same dynamic would apply to China’s foreign aid. Instead of foreign aid being subject to top-down control, it will further expand the BRI just like cooperative programs in other fields had.
Another part of the paper drawing attention is chapter six, in which it outlined how China helped other countries “improve governance”, raising the question of whether China is trying to export its governance model to less developed countries.
Your host fetched a few news reports of cases mentioned in this chapter, such as Grenada’s national development plan, Cuba’s medium－to long-term industrial development plan, Cambodia’s Agriculture modernization planning.
In the seven paragraphs expanding on how China helped other countries improve their governance, six is purely dedicated to technical cooperations.
Whether is be seeing a future for Grenada as a offshore tax haven for foreign companies or individuals, or helping Cuba improve its industries, or sharing some know how on banana growing with the Cambodians, the assistance mentioned in this chapter looks to be designed to address a specific bottleneck of a particular country, rather than a wholesale exportation of the Chinese governance model.
The sharing of technical experience should also be viewed in the context of reform and opening. Ever since China implemented reform and opening, Chinese government officials went overseas in droves to study “modern governance“ from developed countries, many even obtained diplomas from Western institutions. These learning experiences bolstered the abilities of Chinese technocrats, a group that helped spur China’s rapid development.
Your host believes that the biggest pushback for China’s foreign aid may not be from foreign capitals, but from at home.
Foreign aid has always been a touchy issue for the Chinese public, which still see many imperfections within China.
Your host vividly remember an incident in 2011, when China announced that it would donate 23 school buses to Macedonia (renamed North Macedonia in 2019), triggering a firestorm on Chinese social media. Many web users were perplexed why China had the luxury of donating 23 school buses to a foreign country when most of China’s school children didn’t have access to school buses.
Even a decade after the school bus incident, any news of foreign aid is still almost surely met with ridicule and anger from Chinese web users, though over time the government has learned to stay low key on the subject in front of domestic audience.
These voices reveal that deep down in the psyche of the Chinese public, China is still very much a developing country, and through the anger, the message is channeled to Beijing, where it is received loud and clear.
Expect to see the Chinese government trying to walk a tightrope between amplifying its contribution to foreign audience and not triggering too big of a backlash from home.
Incidentally, now maybe a time when foreign aid may receive the least amount of scrutiny from the Chinese public, due to the perceived success in handling the Covid pandemic at home.
Your host noticed that when China sent out teams of medical experts or medical resources throughout last year, the move was generally met with public approval.
This newsletter is penned by Yang Liu, founder of Beijing Channel
With special thanks to Zichen Wang, who runs Pekingnologist