Building the whole picture of China's growing ODA

The Chinese government released this month its much-awaited second white paper on its foreign aid in an attempt — according to several observers — to temper transparency issues and reflect all of the country’s official development assistance flows. After the first edition released over three years ago, the latest document details the country’s ODA from 2010 to 2012, which amounts to over $14 billion in the form of grants at (36.2 percent), concessional loans (55.7 percent) and interest-free loans (8.1 percent). By sectors, economic infrastructure got the bulk of Chinese foreign aid allocations with 44.8 percent, followed by social and public infrastructure and goods and materials at 27.6 percent and 15 percent, respectively. China’s ODA went to a total 121 countries: 51 in Africa, 39 in Asia-Pacific, 19 in Latin America and the Caribbean, and 12 in Europe. Two themes highlighted in the document hint at how Beijing views its foreign aid policy in the future: improving people’s livelihood and promoting economic and social development. While this is a welcome development as China becomes a significant donor not only in the region but also in the world, a few issues still need to be sorted out, including an internationally-compliant aid measurement as well as institutions and capabilities to sustain ODA flows, according to the Japanese author of a recent report on Chinese foreign aid. “As the speed of increase in the level of foreign aid is enormous, some measures to strengthen the implementation structure to deal with this expansion have been introduced by the Chinese government. However, this transition process needs more time,” Naohiro Kitano, deputy director at the Japan International Cooperation Agency’s Research Institute, told Devex. “To facilitate this process, China is attempting to absorb [know-how] on development assistance from multilateral institutions and OECD-DAC countries.” Kitano added that “further enhancing human resources of relevant institutions” may also help fast-track this process. One of the biggest issues clouding Chinese aid is how ODA is defined and perceived — something that, for Chinese development experts, should be thoroughly understood (and respected) by the rest of the international development community, as Devex reported in April. This is also acknowledged by the JICA research paper, saying that China’s aid statistics does not entirely cover “contributions to multilateral development institutions” as well as other assistance that — in conventional terms — can be considered as ODA, like scholarships to foreign students from developing countries. “[Modernizing the definition of ODA] is ... valuable not only for China but also other donors and recipient countries to share comparable aid data so that all stakeholders can improve their understanding, and compete and coordinate with each other,” Kitano said. We will continue to monitor how Chinese foreign aid data and progress continue, given China’s growing significance in a cash-strapped international development community and its intention to establish its own foreign aid statistical system that would gather, compile and formulate ODA statistics. Read more development aid news online, and subscribe to The Development Newswire to receive top international development headlines from the world’s leading donors, news sources and opinion leaders — emailed to you FREE every business day.