Engaging China in International Development Cooperation

August 21, 2013

By Zhou Taidong

As the world’s fastest rising power, China has sharply expanded its foreign aid spending in both scale and scope over the last decade. As China emerges as a major player in the field of foreign aid, longstanding “established” Western donors have begun to seize the opportunity to engage China in development cooperation in an effort to form new joint-venture programs and facilitate mutual understanding. Such cooperation and linking of resources could play a significant role in improving aid quality and effectiveness throughout the developing world. It could also help both China and established Western donors learn from each other in the rapidly evolving aid landscape.

As the world’s fastest rising power, China has sharply expanded its foreign aid spending in both scale and scope over the last decade. Photo/flickr user Sjekster

In July 2013, China Agricultural University and the UK Department for International Development (DFID), with the endorsement of the Chinese Ministry of Commerce (MOFCOM), launched a project aimed at strengthening research capacity in China on international development cooperation. On April 9, 2013, a Memorandum of Understanding (MoU) on Development Cooperation Partnership was signed between Australia and China to strengthen cooperation and collaboration between the two countries in the delivery of aid in the Asia Pacific. These two initiatives represent recent and positive developments in aid collaboration between established Western donors and China.

In this effort to better understand China’s aid policies, much still remains unclear. There is generally a lack of information about the composition of the country’s aid – how it is delivered and why it is provided. Despite some recent moves toward greater aid transparency, China still has not released specific operational and financial information regarding its overseas activities at both the country and project level. Possible reasons for keeping this information private include concerns about upsetting relations with some recipient countries, as publishing country-level data will draw attention to which countries are the largest recipients, and the risk of facing public opinion backlash at home from a Chinese population that is still struggling with its own development needs. To circumvent this information gap, Western research institutions and development agencies have invested significant effort in unpacking China’s aid policy. In particular, research is focusing on aid size, recipient country and sectoral distribution, as well as the impact of aid and its effectiveness. Most of this research has been done with the hope of gaining a better understanding of how China might affect and change the current aid landscape.

The progress being made to facilitate mutual understanding through cooperation suggests that there is political will and openness on the part of China to learn from and share experiences with other donors on the issue of aid delivery. However, translating political will into actual practice and realizing planned cooperation between China and established Western donors could be faced with at least two major challenges.

The primary challenge has to do with a Chinese and Western political divide on the principles of aid delivery. China is not a new donor, as it has been distributing aid for over six decades, and during this time has developed its own principles for carrying out foreign aid. Some of these principles are easy to harmonize with those of established Western donors; others are less so. One difference can be found in China’s commitment to a “no strings attached” principle, whereas established Western donors often link aid with the promotion of good governance or other goals. Another difference can be seen from the different understanding and approaches toward the commonly-espoused “national ownership” principle, i.e., how aid is allocated within a country and who leads and coordinates the aid-supported activities. For the Chinese, ownership often starts at the top and coincides with “non-interference” in internal affairs. For Western donors, it generally means “more say over development processes, stronger leadership on aid coordination, and more use of country systems for aid delivery,” as stated in the Paris Declaration and the Accra Agenda for Action.

In addition, some in China may view the acceptance of Western-centric aid principles as “capitulation.” Therefore, it is unlikely that China will simply imitate or accept practices of established donors in conducting joint aid programs in the short to medium-term.

Meanwhile, there are also serious capacity and operational challenges related to running joint-venture aid projects and initiatives. In-depth studies and candid discussions on the feasibility, benefits, and potential administrative architecture associated with engaging China in development cooperation are almost non-existent. One prominent challenge at the operational level is that China’s aid is mostly delivered without any direct cash transfer to a third country (as China generally uses its own companies to implement aid projects), which could present difficulties in joint financing when collaborating with established donors. In addition, China’s aid administration department, MOFCOM, is currently very understaffed. Therefore, to establish and operate an effective joint management structure will not only mean increased management costs and more complexity in decision-making for China, but will also require stronger capacity and innovative mechanisms when administering these joint projects.

Nevertheless, the presence of these challenges should not prevent the parties from trying out different forms of cooperation. These challenges are not insurmountable and can largely be overcome in practice through a learning-by-doing approach. For example, established Western donors and China can start by cooperating on less politicized issues of global concern, such as disaster management and health care provision, to build trust and experience, reach agreement and compromise on implementation strategies, and test out methods of cooperation to find approaches that work for both parties. At the same time, both sides can help to ensure ownership of the recipient countries by putting them in the driver’s seat at the start of any joint project, and by genuinely listening to their voices and concerns and respecting their development needs.

Western and Chinese research institutions and development agencies should also continue to conduct joint research and exchange programs to find common cooperative approaches that could increase aid impact and effectiveness, promote mutual understanding, and, ultimately, build a strong knowledge base for the international development field as a whole.

Lastly, it is important to remember that development cooperation in joint initiatives can only work on the basis of equality and mutual respect. After all, when it comes to international development, no party has a monopoly on wisdom.

Zhou Taidong is a program officer for The Asia Foundation in China. He can be reached at [email protected]. The views and opinions expressed here are those of the individual author and not those of The Asia Foundation.

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