The Truth Behind China’s Aid Ambitions in Africa

Why you need to know

Contrary to popular belief, the country’s investments do not prop up pariah regimes.

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In August 2013, after a farewell party in the provincial capital of Xi’an, a team of 42 doctors and other medical workers from northwestern China’s Shaanxi province departed for the northern African country of Sudan. They were to spend two years there, tasked by the Chinese government with delivering medical care to the local population.

To critics like Moisés Naím, former editor of the influential U.S. magazine Foreign Policy, this is another example of Chinese “rogue aid,” a new wave of irresponsible initiatives in Africa supposedly designed to prop up unsavory dictators and steal African resources in order to support China’s rapid economic development and crowd out Western influence. Chinese involvement in Africa has been variously described by the media, academics, and politicians as an “oil rush,” a “land grab,” and even “new colonialism.”

But does the so-called rogue aid thesis have any basis in reality? For the past year, I have been researching Chinese aid in Africa. Behind the casual sloganeering, there is little hard evidence suggesting that rogue aid is real.

Many observers tend to portray Chinese aid in Africa as a new phenomenon, but it isn’t. The Shaanxi medical team that set off in 2013 had its precedent in a brigade of medical workers — a small group of 10 doctors, translators, and support staff from central China’s Hubei province — that left Beijing for Algeria over five decades ago, in April 1963, just as China was emerging from its own domestic health crisis: the devastating famine caused by the Great Leap Forward.

Yet even that group was hardly the first. In 1956, China donated agricultural and manufacturing machinery, financial donations, and relief supplies to the Egyptians under an agreement to assist the victims of the Suez Crisis. Later, in the 1970s — long before China became a major global economic player and importer of natural resources — it was already pursuing an aid relationship with Sudan involving road-building, agricultural and fishery assistance, and construction of a conference hall, textile mill, and clothing factory.

Chinese aid in Africa continued relatively unimpeded throughout the Cultural Revolution in the 1960s and ’70s, the reform and opening-up of the late 1980s, and the country’s rapid growth and integration with the world economy in the 2000s.

Now that we have established Chinese aid isn’t new, let us address another question: Is China focused on supporting pariah regimes that don’t question the Communist Party’s human rights record?

The numbers suggest not. Analyses using empirical evidence from research projects like China Aid Data show that Chinese aid favors neither dictatorships nor democracies. Instead, Chinese aid is neutral when it comes to regime type. This is largely in line with the government’s claim that it respects the sovereignty of African governments and doesn’t impose a political agenda.

China’s policy of nonintervention goes all the way back to the 1950s, when it developed the “Five Principles of Peaceful Coexistence,” including mutual respect for sovereignty and noninterference, as part of an agreement with India in 1954. The principles have gone on to shape bilateral relations with many other countries since.

But the official line neglects one very important condition: China does not give aid to countries that have diplomatic relations with Taiwan. Those seeking political explanations for Chinese aid would therefore be much better off looking at the competition between China and Taiwan, which the People’s Republic regards as a renegade province. Tanzania, for example, was one of the biggest recipients of Chinese aid in the ’60s and ’70s, and its sponsorship was key to the PRC’s accession to the United Nations in 1971 at Taiwan’s expense. Both Beijing and Taipei continue to use aid as a tool to win diplomatic recognition from small, relatively poorer nations.

What about the economics? Is Chinese aid all about resource-grabbing? In 2004, China offered Angola US$2 billion of cheap credit, backed by Angolan oil. The gesture attracted wide international attention and led to the coining of the term “the Angola model” to describe China’s linking of cash with natural resources. The money was to be used for infrastructure projects, similar to the oil-for-infrastructure loan model that Japanese assistance to China employed during the early decades of China’s reform and opening-up period.

Studies citing empirical data about Chinese aid to Africa find that recipient countries with more natural resources do not get higher levels of Chinese aid overall — although investment, unsurprisingly, tends to correlate with resources. This suggests that oil-backed loans are a convenient financing tool in specific circumstances, as natural resources can effectively function as collateral for Chinese loans. They are not, however, indicative of a Chinese grand plan to use aid to seize African resources.

That doesn’t mean that aid is unconnected to economic benefits for China. After China launched its economic reforms in 1978, the large state-owned enterprises (SOEs) responsible for implementing aid projects were reorganized and tasked with making money.

Contracts to implement aid projects funded by the Chinese government (and other donors like the World Bank) are still lucrative sources of revenue for SOEs with lots of experience implementing aid projects during the Mao era. For example, in 1998 the China Road and Bridge Corporation, a major SOE that had been operating Chinese aid projects for four decades, was awarded a contract of over US$86 million to build the city ring road in Addis Ababa, Ethiopia’s capital. The project was jointly funded by local and Chinese sources.

In fact, some Chinese aid projects are actually suggested to the recipient government by Chinese companies looking for contracts. To get a concessional loan from China’s Export-Import Bank — one of the most important banks for funding aid projects — the contract financed by the loan must go to a Chinese company.

The Chinese government argues that this “win-win” model makes for more sustainable projects that deliver benefits for both sides, although Western donors have long argued that contract-linked aid leads to low quality and poor value-for-money for recipient countries.

The advantages and disadvantages of tying aid to contracts — and to Chinese aid more broadly — are nuanced and complex. “Rogue aid” arguments that misguidedly focus on oil and dictatorships obscure sensible discussion about this and other aspects of Chinese aid. Evidence, not politicized catchphrases, is the key to understanding and evaluating Chinese involvement in Africa.

The News Lens has been authorized to repost this article. The piece was first published on Sixth Tone here. Sixth Tone covers trending topics, in-depth features, and illuminating commentary from the perspectives of those most intimately involved in the issues affecting China today. It belongs to the state-funded Shanghai United Media Group.

Editor: Olivia Yang

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