USAID adopts a hard line on China's development approach

The United States and China signed a memorandum of understanding to create a framework to facilitate expanded U.S.-China collaboration on Sept. 25, 2015. Photo by: Robb Hohmann / CC BY-NC

WASHINGTON — Trump administration development leaders are not mincing words when it comes to positioning the United States Agency for International Development as a key player in the battle with China for influence in developing countries and emerging markets.

“We can all hate on China, and that’s fun. But from our perspective, from a development perspective, what we are seeing in the field is a real negative impact and a rolling back of the work that you and [we] have made over so many years,” said Jim Richardson, coordinator of USAID's Transformation Task Team, at a meeting with development professionals on Friday.

“To roll back transparency, to roll back governance reforms, to leverage unsustainable debt onto our partners, that’s not success, and for us to sit back and simply say, ‘eh, we’ll just continue to do what we want to do,’ rather than speak out in truth, that’s something that we can’t do anymore,” Richardson said.

The Trump administration’s antipathy toward China is a defining component of its foreign policy, so it is little surprise that the executive agencies tasked with implementing that policy would adopt similarly aggressive rhetoric. Faced with a White House that openly questions the value of foreign assistance and development spending, aid leaders have argued that their programs offer an important counterweight to China’s extensive investments across Africa, Asia, and Latin America.

“We have seen where the U.S. recedes — and this is ... my message, and our message to the White House — we have seen tangibly where the U.S. government or USAID has withdrawn, China has filled the gap. We have seen that consistently,” Richardson said.

180-degree turn

Three years ago, global development seemed to offer an opportunity for cooperation between the U.S. and Chinese governments. In fact, they put it in writing.

During the 2015 United Nations General Assembly, USAID’s then-Acting Administrator Alfonso Lenhardt and Chinese Minister of Commerce Gao Hucheng signed a memorandum of understanding that identified sectors for greater collaboration between the two countries on development issues: Food security, public health and global health security, humanitarian assistance and disaster response, and multilateral institutions.

“If you’re an anti-poverty activist it’s pretty good to hear that these two powerful actors have decided to find common ground over poverty reduction,” said Paul O’Brien, vice president for policy and campaigns at Oxfam America, at the time of signing the memorandum.

China and the U.S. worked together to support the establishment of a Centres for Disease Control at the African Union, and on disaster response and preparedness. At the time, the Obama administration’s goal was to try to bring China into the fold as a more engaged actor within the international development architecture.

Now, the geopolitical winds have shifted and opportunities for enhanced development collaboration between the two countries look like a thing of the past. On one side, the Trump administration has waged a trade war with China, which President Trump accuses of currency manipulation. On the other side, China plays a much more assertive role in developing countries than it did three years ago — and not in the way Washington might have hoped.

Even former Obama administration officials involved in forging the agreement three years ago agree that China’s approach to development demands scrutiny.

“I think that the Trump administration is looking at this in a rather pragmatic way,” said Mary Beth Goodman, formerly a special assistant to President Obama and senior director for development and democracy on the National Security Council — a position that the Trump administration has since abolished.

Goodman said that procurement transparency and good governance within One Belt One Road investments is “essential,” and she added, “It’s important that we lead by example and implement those standards here in the United States.”

At the time of the MOU signing, the China-led Asian Infrastructure Investment Bank had still not begun operations, and China’s One Belt One Road infrastructure initiative was only just taking shape.

Not all free money

Critics of China’s approach to development finance say it is flooding developing countries with cash while loading them up with unsustainable levels of debt. Chinese officials have pushed back on that message, calling it, “senseless and baseless to shift the blame onto China for debt problems.”

Earlier this month, Chinese President Xi Jinping pledged $60 billion to African nations at the first China-Africa forum on cooperation since 2015 — when China also pledged $60 billion to Africa.

In July, Secretary of State Mike Pompeo suggested that the U.S. would oppose the use of an International Monetary Fund bailout for Pakistan if its purpose was to relieve debt accumulated through borrowing from China. Earlier this month, during a visit to Pakistan, Pompeo walked back those comments.

“When the Chinese are engaged in even direct and foreign investment, do you think that they are respecting the transparency and the governance reforms that we have been putting in place for 20 years?”

— Jim Richardson, coordinator, USAID Transformation Task Team

USAID’s political leaders have reached their own conclusions about how developing countries should view Chinese investments.

“We are going to absolutely call this stuff out and to be more clear about the choice that our partner countries have, and be clear that if you decide to work with China, it is bad,” said Richardson, who previously served as Pompeo’s chief of staff in the U.S. House of Representatives.

“It’s not all the free money that you may hear or that you may think. When the Chinese are engaged in even direct and foreign investment, do you think that they are respecting the transparency and the governance reforms that we have been putting in place for 20 years? They are not. We need to be very, very smart and thoughtful about all this,” he said.

Multiple U.S. foreign affairs officials have pointed to countering China’s influence as a key objective of their agency’s programs, but Richardson’s comments represent the most direct statement to date from USAID’s political leadership.

The heightened rhetoric makes it all the more difficult for the two countries to pursue opportunities for collaboration, even on areas that could benefit their relationship and the development objectives they seek, Goodman said.

“As we have seen an escalation in the rhetoric between the two countries under the current administration, it is hard to find a way for the development agencies to have the space where they can find some of those common projects to work on,” she said.

“I hope that there can be some ongoing work that can continue,” she added.

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  • Igoe michael 1

    Michael Igoe

    Michael Igoe is a Senior Reporter with Devex, based in Washington, D.C. He covers U.S. foreign aid, global health, climate change, and development finance. Prior to joining Devex, Michael researched water management and climate change adaptation in post-Soviet Central Asia, where he also wrote for EurasiaNet. Michael earned his bachelor's degree from Bowdoin College, where he majored in Russian, and his master’s degree from the University of Montana, where he studied international conservation and development.