China cites positive impact in first report on aid

AP News
Posted: Apr 21, 2011 5:13 AM
China cites positive impact in first report on aid

China defended its often-criticized role as a foreign aid donor Thursday, saying its assistance boosts developing countries and provides an alternative to Western donors who impose more conditions on recipients.

China said its rise as an aid donor is a good development at a time when the global financial crisis is straining most other countries' spending. Its budgeted foreign aid has swelled nearly 30 percent a year since 2004, and from the first year of the Communist government in 1950 through 2009 has totaled 256.2 billion yuan ($39.2 billion), the State Council Information Office said in the report, its first on the subject.

"Over the years, while focusing on its own development, China has been providing aid to the best of its ability to other developing countries with economic difficulties, and fulfilling its due international obligations," the report said.

The gathering pace of Chinese aid is evident in many corners of the developing world. It is building roads and railways around Africa, textile mills in Syria, cement plants in Peru and bridges in Bangladesh. While welcomed by recipient governments, it has drawn fire from the U.S. and other Western donors, who say Beijing's lack of transparency is contributing to corruption and mismanagement.

While the report addresses some criticisms, saying Chinese projects employ local workers, it largely glosses over contentious issues. It lacks specifics on aid to particular countries and does not address complaints that many aid-backed projects require the use of Chinese contractors or are used to secure rights to oil, minerals or other natural resources.

Still, the report marks a step toward transparency for a government that has largely refused to subject its aid program to international scrutiny.

"It's a big step for them," said Deborah Brautigam, an expert on China-Africa relations at American University in Washington. "They're trying to figure out what it means to be a responsible, great power, and one of the things they've been getting beaten up about a lot is foreign aid."

She said information about China's foreign aid has previously trickled out in a piecemeal fashion and has not been compiled into an official report.

In defending the aid program, the report portrays China as a willing and reliable partner for the developing world, ready to grant assistance without "political strings attached" unlike Western donors who impose stringent conditions and whose own budgets are increasingly strained.

"Currently, the global development environment is very grim," the report said, pointing to the impact of the global financial crisis, climate change, energy security and other challenges. "China, as an important member of the international society, will ... gradually increase the input for external assistance," based on continued development of its economy, it said.

China's total aid is still small compared with established donors. U.S. official development assistance totaled $28.8 billion in 2009. While Beijing has not published a comparable figure, Brautigam says China disbursed an estimated $3.1 billion that year.

But it is Beijing's willingness to deal with repressive and corrupt governments and to zero in on countries rich in resources that gives the Chinese program added impact.

Of the 256.2 billion yuan ($39.2 billion) in overall aid, the report said 40 percent went to grants typically used for projects such as building hospitals, schools and low-cost housing. The rest is divided evenly between interest-free loans and concessionary, or low-interest, loans.

Those concessionary loans went to 76 countries and nearly two-thirds funded economic infrastructure projects while nearly 9 percent supported oil and mining projects, the report said.

In a measure of China's large and growing stake in Africa, the report said nearly half of all foreign assistance in 2009 went to African countries and a third to Asia. The report did not provide figures for the amount of aid.

Politicians and labor leaders in some developing countries have also questioned China's motives, singling out its zeal for natural resources and its insistence on using Chinese labor in many projects. The generalities in Thursday's report are unlikely to quiet criticisms of its aid program.

"This is still pretty much shrouded in mystery," said Yanzhong Huang, a senior fellow at the Council on Foreign Relations, a New York-based think tank. "In developing countries, all this aid could potentially be abused and become a source of corruption. That is why Western countries accuse China of basically making it difficult for them to pursue policies of good governance and human rights."

Beijing is unlikely to provide a fuller accounting of aid in the near term, in part because significant assistance goes to governments like North Korea and Myanmar, which are at odds with the U.S. and other powers. Publicizing specific aid figures would also likely have repercussions in China, where hundreds of millions of Chinese live on less than $2 a day.

"In the past, they gave huge amounts which were really out of proportion to what they could afford, and they're still giving a lot to places like North Korea," said Brautigam of American University, whose book "The Dragon's Gift" examines Chinese aid in Africa. "So it would be politically contentious for the Chinese people to see how much a place like North Korea gets."