Partnership Opportunities in Chinese Development Cooperation

As an emerging donor country, China faces questions not only about its approach to foreign aid but also the impact of its work abroad. One growing debate centers on whether its development assistance has really created opportunities, particularly in Africa. There are many skeptics who argue that Chinese assistance has failed to produce long-term jobs for Africans. Niels Erik Krogh-Poulsen is one of them. The Danish-born international development and telecommunications veteran said he has found an absence of African doctors in hospitals and African workers in infrastructure projects funded by China. “At present times, the knowledge transfer from Chinese experts to Africans is minimum because the Chinese are not interested in educating Africans,” he told Devex. “They are interested in trade and in getting the maximum benefits out of their concessions.” But according to Al Kags, head of marketing and partnership at the Kenya Community Development Foundation, China’s recent projects in Kenya suggest a turnaround. “In what we are currently seeing — in the national initiatives – [the Chinese] are working in conjunction with local people and the majority of the workers are locals,” he said. “They are employing Africans quite a bit.” Kags deems collaborations valuable as these afford knowledge sharing from Chinese to African companies, though he insists that initiatives be African-led because “it is only the person who is wearing the shoes that knows it hurts.” The extent of this knowledge transfer, says a European Commission official who is working on the implementation of the EU-China-Africa trilateral dialogue, is not clear because not much is known about how Chinese projects are being implemented abroad. Business opportunities Deborah Brautigam, author of “The Dragon’s Gift: The Real Story of China in Africa,” shares Kags’ optimism about the impact of China’s aid in Africa, especially in generating business opportunities for local companies. Countries like Angola and Congo have, according to Brautigam, negotiated that a portion of their lines of credit directly benefit African firms. In most cases, however, funding is tied to Chinese companies doing the work. These firms do subcontract to African enterprises, she said, as “sometimes there is maybe a business reason why they would use local companies to do or to supply something because they are cheaper locally.” In addition, the Chinese government has set up financial instruments that may allow African companies to go from being subcontractors to joint venture partners with Chinese companies. She specifically mentioned the China-Africa Development Fund and USD1 billion in special loans for small and medium-sized African companies, announced by Chinese Premier Wen Jiabao in a speech at the 4th FOCAC ministerial conference in November 2009. “[The fund] is buying shares in a number of joint ventures,” said Brautigam, a professor at the American University’s School of International Service. “So, there are opportunities for joint ventures and even for African companies to access finance from China.” Cooperation opportunities with civil society The funding prospect for African non-governmental organizations, meanwhile, is less clear. In July, China hosted a seminar on the role of Chinese and African NGOs in implementing the United Nations Millennium Development Goals. To some, this may signal that Beijing is contemplating greater cooperation with African nonprofits. But Kags and Brautigam dismissed such a notion. “We occasionally attend some of [China’s forums], but in terms of funding or having any formal dealing with China, no, not yet,” Kags said. Brautigam told Devex that to China, aid is a bilateral issue, and how it gives aid “is much more the way the World Bank is used to be: They lent to governments, not to civil society.” Beijing’s willingness to fund an international development initiative tends to depend on who is asking – and how. According to a Chinese professional with more than 15 years of experience in the Chinese NGO sector, who spoke to Devex on condition of anonymity, the only way international organizations and even United Nations agencies can secure funding from Beijing is for them to have local representatives and be registered in China. “The government controls, sponsors the NGOs,” he said. “There are more than 300 foundations entitled to raise funds from the public, from individuals, citizens. But there are millions that are not.” Deng Guosheng, professor at the NGOs Research Center of Tsinghua University, ascribes this lack of collaboration with independent NGOs to the sector’s “very weak” capacity. He explained that the scale of most grass-roots NGOs in China remains small and they may not be able to handle projects in foreign countries. However, the case of government-sponsored NGOs is different. These groups establish schools and hospitals and carry out projects in Africa and Latin America. “For them, it is a sure thing to win the [Chinese funds]. Also, those who gets the funds, those Chinese NGOs who get the Chinese government funding really have very good political relationships, or to be very [good] in that kind of ‘successful relationship’ with the government,” the Chinese NGO expert said, adding that the renewable energy and environment sectors offer the most opportunities for these NGOs’ participation. Deng cited the case of the China Foundation for Poverty Alleviation. The organization, he said, gets nearly 1 billion Chinese yuan renminbi (USD150 million) per year, and it has worked in African countries and partnered with African governments and civil society. Within five years, more Chinese NGOs will go out to foreign countries and engage in international development, the professor predicted. “I think in the future maybe they can compete with other NGOs and get overseas resources to engage international development. But not now,” he said. That vision will depend on China’s policy environment, Deng added. At this time, it “is not very good,” he said. “Some government officials don’t think NGOs can play [an] important role,” Deng concluded. “Maybe they think NGOs are anti-government organizations.” There are recent signs of China warming up to partnerships with civil society. At the China-Africa NGO Seminar held in Jinhua, Zhejiang in July, for instance, approximately 60 NGOs from China and Africa mingled with government officials. Only time will tell whether they will become a prominent part of the country’s international cooperation strategy. Read more: - CHINA’S FOREIGN AID STRATEGY PART 1: Western Donors Embrace China for African Development - CHINA’S FOREIGN AID STRATEGY PART 2: China’s ‘Noninterference’ Approach to International Cooperation - CHINA’S FOREIGN AID STRATEGY PART 3: China Moves to Enhance Aid Transparency - CHINA’S FOREIGN AID STRATEGY PART 4: In Africa, China Expands Aid Priorities