How to work with China's new aid agency

CANBERRA — The announcement of Wang Xiaotao as the head of the State International Development Cooperation Agency, China’s new foreign aid agency, has shed light on its potential direction. It also hints at the business and collaboration opportunities that may exist for traditional donors, nongovernmental organizations and the private sector. Devex spoke with Dr. Denghua Zhang, research fellow at the Coral Bell School of Asia Pacific Affairs, for his insight into what these opportunities might look like and how to take advantage of them. Opportunities for traditional donors The focus on aid within China has traditionally been on bilateral cooperation — working directly with governments of developing countries to identify needs and deliver solutions. But trilateral aid cooperation — between China, a traditional donor country, and a developing country — is an aid delivery mechanism that China is showing increasing interest in. Australia and New Zealand are among countries that have established trilateral programs, including programs tackling malaria in Papua New Guinea and supporting safe drinking water in Rarotonga. “In the past, Australia and New Zealand have provided aid to China,” Zhang said. “Now under the trilateral model, both sides have an opportunity to establish a new partnership.” Under SIDCA, Zhang expects trilateral aid cooperation to increase: “[There is a] strong interest in this new type of partnership under the trilateral model,” he said. “And it is good for traditional donors such as Australia and New Zealand to increase their understanding of Chinese aid practices and policies.” Through increased trilateral programs, traditional donors could influence the structure and programs of SIDCA as well as find a new funding partner to improve the scale and impact of their programs. Opportunities for NGOs According to Zhan, partnering and financial support is likely to be limited for NGOs. “For NGOs, it will be very, very difficult,” he said. “China’s aid program is still dominated by government agencies and they prefer to have a government to government approach to foreign aid. They don’t care too much about NGOs operating within China either, to be frank.” This is currently a weak link in China’s aid program, Zhang noted, that needs to be improved. But there may be opportunities to collaborate with SIDCA through sharing knowledge — particularly in the area of monitoring and evaluation. “The good news is that the current lead agencies such as the Ministry of Commerce are aware that aid monitoring needs to improve,” Zhang explained. This is an area, Zhang said, where China will need support and will be looking to others for best practice — including NGOs. Sharing knowledge may be the first step for NGOs to improve relations and create partnerships to deliver sustainable development. Opportunities for the private sector Wang has shown himself to be willing to work with the private sector, including international investors, to improve development outcomes. But where the private sector should be focused on for initial opportunities with SIDCA is through the Belt and Road initiative — which Zhang expects to be a focal point for SIDCA. “One Belt, One Road would be a good way of approaching Chinese counterparts to see what the business options are,” Zhang advised. And this means infrastructure projects will be key, but opportunities may also be available in support policy development to ensure Belt and Road projects deliver sustainable development as well as analyzing and communicating impact. As SIDCA evolves, so will the opportunities — and Zhang advises to maintain contact with networks in China to be on the front foot.