Roosevelt Institute | Cornell University

China's Foreign Aid to Africa

By Deborah EgboPublished October 11, 2013

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Unlike most traditional donors, China is still relatively new to large-scale foreign aid. Despite this, China has thus far done an impressive job in providing foreign aid, as the country's aid policy has made profound changes in the countries it supports.
The creation of the Forum on China-Africa Cooperation in 2000 brought about a massive increase in 
China's foreign aid to Africa. Since its creation, there has been a yearly increase in China's foreign 
aid budget to African countries. The Forum on China-Africa Cooperation is an official forum between 
the People's Republic of China and African countries to improve the relationship between China and 
Africa. Scholars have estimated China's foreign aid to African countries to have been about 75 billion 
from 2000-2011, but the exact numbers are unknown as China does not publish information about its 
foreign aid budget. In assessing China's foreign aid program, it is important to identify its major pros 
and cons. Its provision of assistance in form of infrastructural development fosters the expansion of local 
businesses and encouragement of foreign investors. In addition, China is the only known large scale
donor to developing countries that provides assistance regardless of the recipient country's governance. 
This prevents unequal growth, unequal development and unequal poverty distribution in African countries 
if properly implemented. Conversely, providing aid to countries irrespective of the method of governance 
can lead to abuse of power by the recipient country's government. Some critics have also argued that 
China's exchange of natural resources for manufactured goods with African countries is a new form of 
colonialism. 

China's foreign aid is primarily managed by the China Export-Import (Exim) Bank and the Chinese 
Ministry of Commerce. The China Exim Bank manages concessional loans, while the Ministry 
of Commerce's Department of Aid to Foreign Countries manages grants and zero-interest loans. 
Additionally, the Ministry's Bureau for International Economic Cooperation manages the direct 
implementation of aid, organizes short-term training for Chinese entrepreneurs interested in starting 
business in Africa, and reviews the qualifications of Chinese firms that bid on tenders for the 
implementation of turnkey projects, "in-kind" aid, and prefeasibility studies. The China Development 
Bank also provides a small number of loans and sponsorships, and the Chinese government offers small 
multilateral aid through the World Food Program and the Food and Agricultural Organization. 



As proposed by the Prime Minister of China, Zhou Enlai (1949-1976), the principles for foreign aid 
towards developing countries include: equity and mutual benefit; respect of sovereignty of recipients 
and non-imposition of conditions; provision of grants or highly concessional loans, as well as ï¬"šexibility 
in their repayment; focus on self-reliance and independent economic development; small investments 
yielding quick returns; provision of high-quality equipment and material at international market prices
ensuring that technical assistance is transmitted to recipients; and similar treatment for Chinese and 
recipient experts. On the one hand, the principle of respect of sovereignty of recipients ensures that 
foreign aid is available to every country regardless of the method of governance. This is advantageous 
because it prevents unequal economic growth, unequal development and unequal poverty distribution in 
African countries if properly implemented. On the other hand, autocratic leaders might use this to their 
advantage and ignore the rights of the indigenous people, environment and labor standards. 


Unlike many traditional donors, China provides foreign aid in form of investments in infrastructure. The 
Chinese government provides the expertise for most of the infrastructural projects and awards most of the 
contracts to state-owned or other types of Chinese companies who bring their own workforce. While this 
has a limited impact because very few citizens of the aid recipient country are employed, it addresses the 
issue of misuse of money by the government officials. In addition, investments in infrastructure increase 
productivity and foster economic development. This is particularly important because many African 
countries lack tarred roads and electricity, elements of infrastructure necessary for encouraging foreign 
private investments and expanding local businesses. 

On the flip side, civic societies in recipient countries have expressed concerns that the exchange of natural 
resources for manufactured goods is starting a new "colonial" relationship that will prevent African 
countries from developing their own manufacturing capacity. Western countries also claim that China's 
interest in African countries is driven by its needs for resources. While there is a level of accuracy to 
these claims, it is important to note that China's foreign aid program is beneficial to African countries 
especially in infrastructure development. Furthermore, some Western countries claim that the low-interest 
loans provided to African countries encourages excessive borrowing beyond their capacity. However, 
reports have shown that most of the loans taken from China by African countries have been used for debt 
relief. Lastly, while the media and some western countries focus on China's foreign aid to autocratic 
countries like Eritrea, China also provides foreign aid to democratic and well governed countries like 
Botswana. 

Unlike most traditional donors, China is still relatively new to large-scale foreign aid, and the Chinese 
government is presently working on creating a foreign aid agency using US foreign aid policies and 
agencies as a model. Despite this, China has thus far done an impressive job in providing foreign aid, as 
the country's aid policy has made profound changes in the countries it supports.