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New Actors in International Development: the Case of China. Dr. He Wenping Professor, Director of African Studies Section of Institute of West Asian & African Studies, Chinese Academy of Social Sciences. Outline. From “old” to “new” Actor Major Characteristics of China’s Aid Approaches
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New Actors in International Development: the Case of China Dr.He Wenping Professor, Director of African Studies Section ofInstitute of West Asian & African Studies, Chinese Academy of Social Sciences
Outline • From “old” to “new” Actor • Major Characteristics of China’s Aid Approaches • The Role and Challenges • Post-Busan:China’s Contribution
From “old” to “new” ActorChina: not a new donor• period: from 1956 to the late 1970s• Motive and driving forces:----rich ideology and political benefits----strengthen the diplomatic and political ties ----break through the strategic besiege ----against imperialism and colonialism and for national liberation and independence
Manifestation: —support the struggle for national independence and against imperialism and colonialism — Premier Zhou Enlai’s visits to Africaandput forward theeight principles —TaZara Railway Building
The biggest Chinese aid project to Africa, the Tan-Zam Railway, began to be built in mid 1960’s and completed in 1975
The eight principles • equality and mutual benefit 2. strictly respects the sovereignty of recipient countries, no strings attached and no privilege required 3. provides economic aids in the way of interest-free or low-interest loan, the time limit of repayment could be delayed when it is needed
4.The purpose of aid is to help recipient countries gradually develop on the track of self-reliance and economic development independently 5.To make quick effects through small investmentfor the projects with aid 6. provides the best quality equipment and material of its own manufacture at international market prices.
7. While providing technical assistance, Chinese government assures to teach recipients to fully master this kind of technology 8. Chinese aid experts should be paid as same as their own experts of recipient countries. They are required to not have any special requirement or enjoy any special amenities.
• Second period: from the late 1970s to now ----the aim is to seek mutual economic cooperation and common development.----the four principles raised in early 1983 • equality and mutual benefit, • stress on practical results, • diversity in forms, • pursuitof common progress
Results: • Diversity in forms of aid Apart from providing grant (the main form of previous period), investment, cooperative and joint ventures, engineering contract business, etc, are all appeared • Economic and trade relations has been improved
The reforming foreign aid in October 1995 • preferential loan has been introduced ---mostly used for joint ventures by Chinese and local enterprises, ---for providing complete sets of equipments or mechanical and electrical products made in China ---for some infrastructure and social welfare projects which have guaranteed repayment of the loan (so far there are hundreds projects under the framework of the preferential loans, the first preferential loan project was the oil exploitation program in Sudan in 1996)
with the founding of FOCAC in 2000, the contents of China’s aid to Africa have been further widened and enriched. Apart from providing complete set of projects which was the main form in 1990s (above 60%), technical cooperation, debt write-off, cooperation on human resources development, medical teams and youth volunteers dispatching, emergency humanitarian aid are all contributed to the all aid package program.
The Third Forum: Beijing 2006 Summit Eight measures have been announced: ——Double assistance by 2009 ——Provide loans and credits totaling US$ 5 billion ——Set-up a Development Fund which will reach US$ 5 billion to encourage Chinese Companies’ investment ——Build a conference centre for the AU ——Debt Cancel ——Further Open up China’s Market to African commodities (from previous 190 to 440 items) ——Establish 3-5 Trade & Economic Cooperation Zones ——Train 15,ooo African Professionals, build 100 rural schools, dispatch 100 agriculture experts and 300 youth volunteers, build 30 hospitals and 30 malaria treatment centres, increase scholarships for African students from 2000 to 4000 per year,etc
The Fourth Forum: 2009 SHARM EL-SHEIKH, EgyptMinisterial Conference New Eight measures have been announced: ——addressing climate change, to build 100 clean energy projects for Africa covering solar power, bio-gas and small hydro-power . ——cooperation in science and technology, will carry out 100 joint demonstration projects with Africa on scientific and technological research and receive 100 African postdoctoral fellows to conduct scientific research in China ——Help Africa build up financing capacity，provide $10 billion concessional loans, set up a special loan of $1 billion for small- and medium-sized African businesses, cancel African countries’ debts due to mature by the end of 2009
——Further open up China’s market to African products. China would phase in zero-tariff treatment to 95 percent of the products from the least developed African countries having diplomatic relations with China, starting with 60 percent of the products within 2010. ——Enhance cooperation with Africa in agriculture. increase the number of agricultural technology demonstration centers in Africa to 20, send 50 agricultural technology teams to Africa and train 2,000 agricultural technology personnel for Africa. ——Deepen cooperation in medical care and health. China would provide medical equipment and anti-malaria materials worth 500 million yuan ($73.2 million) to the 30 hospitals and 30 malaria prevention and treatment centers built by China and train 3,000 doctors and nurses for Africa.
——Enhance cooperation in human resources development and education. China would build 50 schools and train 1,500 school principals and teachers for African countries. By 2012, China would increase the number of Chinese government scholarships to Africa to 5,500, and would also train 20,000 professionals for Africa over the next three years. ——Expand people-to-people and cultural exchanges. China proposes to launch a China-Africa joint research and exchange program to increase exchanges and cooperation, share development experience, and provide intellectual support for formulating better cooperation policies by the two sides
Characteristics • “No political strings attached” Aid policy • Emphasizing on bilateral aid projects rather than multilateral system The reasons: • historical habit and enriched experience in doing so; • “poor help poor model” doesn’t belong to the DAC club; • bilateral way is more efficient than the multilateral way; • AU and NEPAD are relatively new initiatives and African integration is still in the process of building.
3. Strong focus on “hardware projects” such as physical infrastructure construction rather than “software projects” like research and capacity building•The China Export-Import Bank, founded in 1994, has played an important role in providing financial support for such infrastructure projects. •Chinese financial commitments is rising dramatically: $1 billion (2001-03 )-- $1.5 billion(2004-05)-- $7 billion in 2006 -- $4.5 billion in 2007(the year that China provided finance for as much infrastructure in Africa as all the G8 countries added together)
The Role of China’s Aid on African Development：generated effective results and contributed greatly to Africa’s economic recovery ---- more than 900 projects ---- debts write-off ----medical teamsdispatching and human resources training ——annual growth rate between 5% and 6%， rapid price rise of raw materials, demanding from Asia ——promoted the bilateral trade dramatically ——huge investment in infrastructure ——high efficiency
The Role of China’s Aid on International concern on Africa ——the appearance of “Africa fever” ——Korea-Africa Summit , EU-Africa Summit , India-Africa Summit, etc. ——heated debate about forming African strategy goes on in Africa
Challenges and Developing Trend ----conflict between China’s “no strings attach” model and the Western donors’ aid conditionality (a two-way street mindset and practice are needed ) ----China’s aid managing system needs to be upgraded: an independent agency needed ----an urgent need to train the expertise on foreign aid ----The need to establish a monitoring system and mechanism to evaluate China’s aid
Post-Busan: China’s Contribution ——Discourse shift: from “aid effectiveness” to “development effectiveness” • Paris Declaration in 2005 • Accra Agenda for Action in 2008 • Busan in 2011 5 principles: ownership，alignment , harmonisation, management for results , mutual accountability
Why the Shift Happens Now: the Background of International Situation: —The convergence of the MDGs poverty reduction agenda and the G20 agenda could be seen as the most important driving force for the shift. — The appearance of the “new donors” and their focus on development issue —The failure of Western countries' development assistance
What China’s Experiences can Contribute to the discourse Evolution? • China has a dual role and a great potential for becoming a driver of the aid discourseevolution, namely from “aid effectiveness” to “development effectiveness” ---- long being a largest recipient country (know how to engage with donors and build ownership by its own) ---- being a new “donor”/or call “aid-provider” (accumulating experience through “learning by doing” and focusing on aid results
—China’s experiences being a recipient country: from “self-reliance” to welcome foreign aid. by the end of 2007, over US$ 6.6 billion aid landed in China. The positive role given by the influx of aid • Experiences: combined efforts between donors and China, the predominant role played by Chinese government. • Particularly do good job about the principle of ownershipandalignment: integrate foreign aid with Five Year Plan; set three criteria for aid project application
China’s experiences for its own economic, political and social development —— thirty years ago, Malawi, Burundi and Burkina Faso were economically ahead of China on a per capita basis. ——poverty-alleviation and economic development could be achieved in the developing countries ——China’s experience has become the focus of the world and an example for others —— China’s economic success has been achieved together with political and social reform —— rightly handled the relations between “reform”, “development” and “stability” ——a powerful, visionable leadership and the right development strategy are very much needed
China’s experiences being a provider of development assistance country • not a new donor, • TaZara Railway. • the core value of “equality”, “mutual respect” and “mutual benefit”
