November 19th, 2010 | Global Times Careful use of foreign aid benefits everyone involved
AP’s recent story “China rises and rises, yet still gets foreign aid” was widely circulated in the foreign media. Questions were asked as to whether China, the world’s second largest economy, still needs foreign aid.
The logic the story laid out seems to be convincing at first sight. China spent billions of yuan in one of the most impressive ever Olympics in 2008, sent another three astronauts into space in the same year as well, and held an equally successful World Expo this year.
As China announced that it was increasing aid to developing countries, some asked why the country still need to receive money from developed countries, describing it as no less than “robbing the poor” by competing for limited grants. But this analysis missed the whole picture.
In the first response to the AP story, Zhang Kening, commercial counsellor of the Department of International Trade & Economic Affairs, Ministry of Commerce, which handles the country’s receiving of foreign aid, told the Global Times in an exclusive interview that the charge is “a speculation and slander.”
According to UN standards, the number of Chinese living in poverty is 150 million, representing 15 percent of the world’s poor. Using 2 percent of the world’s $120 billion in official aid to help 15 percent of people living in poverty does not deprive other countries’ right to receive assistance.
Saying China no longer needs foreign aid because it is providing assistance to other countries shows a lack of understanding of the history involved. China began to provide assistance to other developing countries 60 years ago to promote South-South cooperation and began to accept foreign assistance only 30 years ago.
As Zhang points out, providing assistance is not contradictory with receiving assistance, because China makes use of its advantages to aid other countries while accepting assistance to make up for deficiencies.
In the past, foreign aid mainly focused on helping the poor. A food assistance project in Shandong Province funded by the German government, for example, helped lift 1 million people in the Yimeng Mountain area out of poverty.
The foreign aid programs now cover more than 30 fields, including agriculture, irrigation, transportation, culture, education, health, energy, and environmental protection. More and more resources have been utilized to help China’s institutional reform, such as improving governance and building a more complete legal system. The Chinese anti-monopoly law, passed in 2007, greatly benefited from an anti-monopoly project funded by the Japanese government.
China does not have full control over the money it receives in aid. The aid is often not paid in cash, but used to pay for joint activities by the donor and recipient country. For instance, if a donor country provides China with $5 million of aid for a rural development project, one third of it may be used for purchasing devices and equipment from the donor partner, one third for paying the foreign experts involved, and the rest for delivering technology in China or training Chinese abroad. Today most of the aid is no longer used for purchasing equipment, but for expertise and personnel.
Foreign aid programs in China do not only serve the interests of China itself. Thanks to the effect and efficiency of China’s implementation of assistance projects, many countries and organizations are willing to cooperate with China, because the experiences can be valuable examples to be disseminated to other developing countries.
Issues like HIV/AIDS control, climate change and environmental protection, which are now global challenges, need to be tackled through joint efforts by the international community.
Donor countries also benefit from the cooperation. Through cultural and economic exchange, foreign products gain publicity in the Chinese market and help these countries establish economic and political relationships with China.
A training program to send government officials to Japan, for instance, drastically changed many Chinese officials’ stereotypical view of the Japanese people. Such efforts can change the image of a country and contribute to mutual understanding, particularly at the grass-roots level.
China may be growing fast, but substantial portions of the country languish in poverty. Many donor countries agree that the provision of aid will still be necessary for a long time to come.
By Wu Gang