China s Aid Approaches in the Changing International Aid Architecture

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1 China s Aid Approaches in the Changing International Aid Architecture Mao Xiaojing Deputy Director, Associate Research Fellow Chinese Academy of International Trade and Economic Cooperation (CAITEC) MOFCOM, China November 28, 2012

2 Contents A Changing International Aid Architecture China s Foreign Aid Policies Features of China s Aid Practices Looking Forward of China s Foreign Aid One Question

3 A Changing International Aid Architecture Table 1. Net Aid Disbursements by Different Actors USD million ODA by DAC members Proportion in total 88.03% 85.70% 84.40% 82.12% 79.33% 80.69% 2. ODA from non-dac donors Proportion in total 1.70% 2.52% 3.72% 3.41% 5.25% 4.49% 3. Net grants by NGOs Proportion in total 10.27% 11.78% 11.88% 14.46% 15.42% 14.82% Total Note: None-DAC donors only include those countries or territories reported to OECD, around 20 countries. The other non-dac donors, such as China, India, Brazil, Russia and etc, are not included. These countries are categorized as emerging donors.

4 USD billion % A Changing International Aid Architecture Aid volumes from DAC members are increasing, but their proportion in the total international aid flows is decreasing volume proportion

5 A Changing International Aid Architecture Yet, the DAC members are still the dominant players and rule makers in the international aid arena % 20% 40% 60% 80% 100% France Germany Japan United Kingdom United States

6 A Changing International Aid Architecture Non-DAC donors are expanding in number and scaling up their aid, but their impacts are more limited within regions Memo : 2009 ODA/GNI (%) OECD Non-DAC Czech Republic Hungary Iceland Israel a b Poland Slovak Republic Slovenia Turkey Arab countries Kuwait Saudi Arabia United Arab Emirates Other donors Chinese Taipei Thailand Other donors c TOTAL Source: OECD, Development Cooperation Report 2011.

7 USD million A Changing International Aid Architecture Emerging donors are becoming more active and attract more attention from the international world Aid Volumes of BRICS in Brazil China India Russia South Africa Source: OECD, Development Cooperation Report 2011.

8 USD million A Changing International Aid Architecture Donors Gross ODA in United States France Germany United Kingdom Japan Spain Netherlands Sweden Norway Canada Italy Saudi Arabia Denmark Australia Belgium Switzerland China Finland Austria Ireland United Arab Emirates Korea Russia Turkey Greece Portugal Source: OECD, Development Cooperation Report India Luxembourg Chinese Taipei Poland New Zealand Kuwait Czech Republic Israel a b Hungary South Africa Slovak Republic Slovenia Thailand Iceland 20000

9 A Changing International Aid Architecture NGOs are playing a more important role in international development cooperation Volume proportion

10 China s Foreign Aid Policies From Eight Principles to the First White Paper In 1964, Premier Zhou Enlai declared the Eight Principles of China s Foreign Aid. In April 2011, China released the first White Paper on China s Foreign Aid.

11 China s Foreign Aid Policies Unremittingly helping recipient countries build up their self-development capacity. Imposing no political conditions Adhering to equality, mutual benefit and common development Remaining realistic while striving for the best Keeping pace with the times and paying attention to reform and innovation

12 Features of China s Aid Practices Covering a wide range of countries, with Asia and Africa as the priority regions East Europe, 12 Asia, 30 Africa, 51 Latin America and the Caribbean, 18 Oceania, 12

13 Features of China s Aid Practices Focusing more on project aid Complete projects account for 40% of China s foreign aid expenditure. The majority of concessional loans are used to support project aid. In 2011, China assisted with 146 complete projects and 35 concessional loan projects.

14 Features of China s Aid Practices Focusing more on economic dimensions of cooperation Economic infrastructure, agriculture and industry projects account for over 60% of complete projects and over 80% of concessional loans projects. Focusing more on bilateral aid Around 90% of China s foreign aid is provided through bilateral channel.

15 Features of China s Aid Practices Combination of aid with trade and investment zero-tariff treatment to imported products from LDCs China-Africa Development Fund special loan for the development of SMEs in Africa establishment of trade and economic cooperation zones

16 Looking Forward of China s Foreign Aid Continue to increase aid budget Optimize aid structure Increase the proportion of grants in the total aid volume Provide more aid to least developed countries Build more livelihood-improving projects Continue to focus on agriculture and infrastructure Provide more human resource development cooperation

17 One Question To what extent will China/ emerging economies change the international development cooperation landscape?

18 Thank You!

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