10 Essential Facts About Chinese Aid in Africa
The global development landscape is currently in a period of tumult. A number of developing countries that were once aid recipients are now aid donors, and they represent a growing proportion of the total money spent on international development. China is by far the largest emerging competitor in the global aid market, and its unique way of designing and delivering assistance is challenging the traditional policies and practices of Western powers. More and more money is sloshing around, as well as more players. China now has a robust bilateral aid program, but it's also helped create alternative sources of multilateral funding for developing countries: namely, the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank.
Chinese “aid” is a lightning rod for criticism. Policy-makers, journalists, and public intellectuals claim that Beijing uses its largesse to cement alliances with political leaders, secure access to natural resources, and create exclusive commercial opportunities for Chinese firms—all at the expense of citizens living in developing countries. We argue that much of the controversy about Chinese “aid” stems from a failure to distinguish between China's Official Development Assistance (ODA) and more commercially oriented sources and types of state financing. Using a new database on China's official financing commitments to Africa from 2000 to 2013, we find that the allocation of Chinese ODA is driven primarily by foreign policy considerations, while economic interests better explain the distribution of less concessional flows. These results highlight the need for better measures of an increasingly diverse set of non-Western financial activities.