On January 10th, the State Council Information Office (the administrative office under the State Council) published the White Paper on “China’s International Development Cooperation in the New Era” (中文版本). In 8 chapters, the paper summarizes China’s recent engagement in (generously) providing development assistance (intermixed with its overseas economic engagement) and lays out China’s strategy and areas of future development assistance.
Highlights of the White Paper
Some highlights that the document emphasized include:
- China role as a developing country
- China’s contribution to developing other countries and how it can serve as a role model
- the importance of green development – but not necessarily as an integrated, but as a separate aspect from development
- the BRI as (the) core part of China’s overseas development strategy
- China’s interest in tripartite cooperation – but only under the pretext of China being a developing country
- China’s future in development strategy in health cooperation to deal with the COVID-19 crisis
Some highlights that the document could have strengthened:
- International cooperation and coordination of development assistance with international donors
- A definition of what China understands as “development assistance” and what are its “economic interests”
- the relevance of accelerating development through strengthening local economies with more local participation and local ownership, not only through the construction and Chinese ownership of local infrastructure.
Short Overview of the White Paper
In Chinese tradition, the White Papers starts out by emphasizing how China “has always demonstrated a spirit of internationalism and humanitarianism” and how China’s domestic and international engagement is shaped by President Xi Jinping in a new era after the 18th National Congress of the Communist Party of China in 2021.
The White Paper – unsurprisingly – promises development based on shared interests, mutual benefits and inclusiveness. It highlights the “cultural and philosophical origins” of Chinese contribution “in a new era and a global community of shared future”:
- China’s ideal of universal harmony based on principles of good neighborliness and harmony in relations with all other countries
- China’s idea of repaying kindness with kindness
- Chinese tradition of internationalism since 1950
- Chinese sense of responsibility as a major country
Early in the White Paper, China emphasizes its role as the world’s largest developing country and that China’s development cooperation must be seen as a form of mutual assistance between developing countries. The White Paper also emphasized early that the Belt and Road Initiative (BRI) is (the) “major platform for international development cooperation” for China.
China’s aid through investment, construction and operation
The White Paper builds on China’s domestic experience about development by emphasizing that “development is the top priority of all countries”. However, contrary to China’s domestic approach that focuses on financial support, technology transfer and local participation when receiving foreign aid, China’s overseas development engagement is different, according to the White Paper:
In order to “maintain the reputation and credibility of China-aid projects”, China supports overseas development by providing “operation of completed projects (…) and the integration of investment, construction and operation”. This can be interpreted as China’s focus on exporting domestic industries and experiences and taking full ownership in overseas (assistance) projects. While the White Paper later also states that “it is better to teach how to fish, than to provide the fish”, the concept of development by provision of infrastructure through a closed Chinese eco-system has been re-iterated in the White Paper at several points.
Accordingly, the White lays out a plethora of projects in infrastructure, energy, health, capacity building (“people-to-people exchanges”) to substantiate China’s role in overseas development (the White Paper also emphasized China’s role in women empowerment).
Export, economic cooperation or aid?
The White Paper emphasizes a number of cooperation mechanisms, such as the Forum on China-Africa Cooperation (FOCAC) or the Shanghai Cooperation Organization, which are pre-dominantly focused on economic cooperation rather than development assistance in a more traditional sense. This mixture of aid versus economic cooperation is also highlighted in the chapter on the “steady growth” of “foreign aid”. The White Paper showcases how China allocated RMB270 billion for foreign assistance in three categories between 2013 and 2018: grants (RMB 127.8 billion), interest-free loans (RMB11.3 billion) and RMB131.1 billion in concessional loans. This “foreign aid” went to public facilities (e.g. hospitals), infrastructure (e.g. electricity and small hydropower) and agriculture – some of which might be gifts by China, some of which should be labelled “economic investments”.
|Sector||Number of projects||Sector||Number of projects|
|hospitals||58||agricultural pilot centers||5|
|schools||86||farmland water conservancy||2|
|civil construction||19||agricultural processing||6|
|well-drilling and water supply||20||others||6|
|others||63||Climate change programs:||13|
|Economic infrastructure:||80||wind and solar energy||10|
|broadcast and telecommunications||13||small hydropower||2|
The role of the Belt and Road Initiative in China’s overseas development assistance
A big portion of the White Paper is dedicated to China’s overseas engagement strategy “Belt and Road Initiative” (BRI). It elaborates China’s overseas assistance along the BRI’s five dimensions:
- policy coordination
- infrastructure connectivity (including road, air transport and logistics hubs construction),
- promotion of unimpeded trade,
- deepening financial integration including the setup of the contentious Multilateral Center for Development Finance (MCDF) that “aims to attract more investment in the Belt and Road”, and
Green development cooperation
The White Paper also highlights China’s ambitions of green development cooperation. In fact, this is one of the longest chapters in the paper.
Within green development cooperation, the paper stresses how China invested in clean energy (the White Paper luckily did not include “clean coal” as clean energy), biodiversity protection, climate change mitigation and adaptation, curbing desertification, as well as conserving marine and forest resources.
Tripartite cooperation for development
To support China’s overseas development ambitions, the White Paper also highlights the possibility for tripartite cooperation, under the condition that China is regarded as a developing country rather than as a developed country – which allows it to take on different standards and responsibilities. Under this tripartite cooperation, the White Paper also stresses the possibility to promote co-financing.
Outlook and future strategy
For China’s future ambitions for development assistance, the White Paper emphasizes a focus on health in the aftermath of COVID-19. The White Paper also stresses that China hopes to “integrate its responsibilities in building the Belt and Road” and promoting the implementation of the UN2030 agenda (the direction of integration was left somewhat ambiguous).
Finally, the paper also stressed China’s desire to improve lives and share happiness in the future! Maybe China’s support to “increase sports competitiveness” by sending table tennis and badminton coaches to Uruguay, Samoa, Myanmar and Cambodia is part of that happiness. Without a doubt – the World needs more of that!
Dr. Christoph NEDOPIL WANG is the Founding Director of the Green Finance & Development Center and an Associate Professor at the Fanhai International School of Finance (FISF) at Fudan University in Shanghai, China.
Christoph is a member of the Belt and Road Initiative Green Coalition (BRIGC) of the Chinese Ministry of Ecology and Environment. He has contributed to policies and provided research/consulting amongst others for the China Council for International Cooperation on Environment and Development (CCICED), the Ministry of Commerce, various private and multilateral finance institutions (e.g. ADB, IFC, as well as multilateral institutions (e.g. UNDP, UNESCAP) and international governments.
Christoph holds a master of engineering from the Technical University Berlin, a master of public administration from Harvard Kennedy School, as well as a PhD in Economics. He has extensive experience in finance, sustainability, innovation, and infrastructure, having worked for the International Finance Corporation (IFC) for almost 10 years and being a Director for the Sino-German Sustainable Transport Project with the German Cooperation Agency GIZ in Beijing.
He has authored books, articles and reports, including UNDP's SDG Finance Taxonomy, IFC's “Navigating through Crises” and “Corporate Governance - Handbook for Board Directors”, and multiple academic papers on capital flows, sustainability and international development.