Promoting Self-interests mainstay of China's foreign aid policy

Rising global status of China has become topic of growing interest. To catapult its exalted status as an emerging super power, China is now greatly recalibrating its ties with countries across the globe. Over the past few decades, it made rapid strides in refurbishing its position as global financial giant by evolving as a biggest donor to many nations. Recent AidData reports indicate, that China is now closely inching the gap with US, which is reckoned as the largest global donor. Data indicate that official funding of China as $354.4 billion between 2004-14 against US $394.6 billion. An in-depth analysis of the pattern and type of assistance offered suggests that China’s financial assistance was rather opaque and largely guided by its foreign policy.

Globally, financial assistance has been defined by the agreed definition of Official Development Assistance or ODA. ODA which is basically aimed at spurring economic growth comprises of 25% of grants. Initially, China’s assistance patterns largely adhered to this officially agreed patterns and was bereft of the motivation of accessing natural resources. But the data on the past decadal assistance offered by Beijing indicates that it has embarked on a new trajectory drawing interest of various policy makers, journalists, and strategists. China’s aid is now commercially orientated, devoid of grants but majorly includes loans offered at market prices. The projects of interest largely belong to infrastructure, energy, mining, and transport sectors.  The list of the top 10 recipient countries of the Chinese largesse mirrors this new change. Countries which are on the top of the list are- Cuba, Ivory Coast, Ethiopia, Zimbabwe, Cameroon, Nigeria, Tanzania, Cambodia, Sri Lanka, and Ghana in order. Strategic experts maintain that over 86% of Chinese funds are diverted to African countries that voted with Beijing at the UN.  Resource-rich countries with illiberal regimes received ample amounts of funds. Economic, commercial, and political interests principally motivate Chinese aid. Also, Other Official Flows (OOF) or loans accounted for major portion of the Chinese aid. Spuriously, the aid is thus diverted to projects that can generate more money for China, expand its overseas market and enhance its accessibility to natural resources of recipient countries.

International focus has suddenly shifted to Chinese aid patterns since most of the Dragon’s supposed economic assistance failed to boost economic growth to a tune of 0.4% observed in case of developmental aid provided by Western and OECD (Organization for Economic Cooperation and Development) Countries. Instead, majority of Beijing’s assistance led to ensnarement of recipient countries into a debt trap with majority of Chinese assisted projects becoming the momentous White Elephant Projects. For all its dubitable infrastructure investments and relentless buttressing of authoritarian regimes, the West began to refer China as a “Rogue Donor”.

With China vying to occupy a larger role in the international arena, Chinese contributions are now under scanner. Moreover, the shrouded aura of opacity incipient of Chinese dealing is raising more doubts about the real intentions of China’ global outreach. Fresh reports indicate that China is now funding over 4300 projects in 150 countries matching the contribution of US. Hence parallels are drawn between the substantial funding patterns of these countries. Interestingly, like the West, China is inclined to aid countries aligned to it politically. Cuba is thus one of the largest recipients of Chinese aid in the past 15 years. Clearly, unlike the West, China largely undermines developing countries record on human rights violations and other criteria set by the Western countries for offering aid. It has thus rewarded rogue regimes with loans and grants denied by the West. Strategists now critically acclaim that China’s disregard for governance credentials is fostering corruption. Its indifference to concerns of environmental degradation might have potential global consequences. Interestingly, China’s global connectivity project OBOR (One Belt One Road) critically emulates similar precincts raising severe concerns about the impact of enhanced China’s global development foot print. It is also now official that, China’s aid is less concessionary and guided by self-interest. Adding heft to this argument, AidData now indicates that in the past 16 years, Russia has emerged as the largest beneficiary of China’s foreign aid. Russian Oil Giant, Rosenaft received $25 billion loan package from China. Clearly, with China aggressively flexing its muscles to fill the vacuum created by America’s retrenchment from the global scenario, understanding its spending patterns and methods of rendering assistance to developing countries become more relevant.

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