Blog/Opinion

How China's new white paper defines a decade of development cooperation

Authors:
Yunnan Chen
Linda Calabrese
Barnaby Willitts-King
Source:
ODI
Contributor:
Publication Year:
2021
January 29, 2021
  • SDG 3 - Good Health and Well-Being

China has released a new white paper on international development cooperation at a time when the Covid-19 pandemic has challenged global cooperation. It also comes just before the political transition in the United States that may yet redefine the global balance.

This marks a rare release of official information on China’s often opaque development cooperation activities. It is also a statement of its role as a global development actor: in supporting multilateral cooperation, providing humanitarian assistance and in generating economic growth in low-income countries.

Here three ODI experts comment on these notable areas that the white paper highlights.

Yunnan Chen: a commitment to multilateralism – except on low-income country debt

China’s new white paper comes at a time when the influence and credibility of the US in the global system has been in disastrous decline. The paper reinforces China’s commitment to multilateralism and to pouring new money into multilateral institutions, emphasising its credibility as a cooperative global power. But its approach to low-income country (LIC) debt remains bilateral.

Beyond the increased bilateral flows of grants, zero-interest loans and concessional loans that constitute China’s foreign assistance, we have also seen growing flows to multilateral institutions. In the last seven years, China has created new co-financing special funds in nearly every major multilateral development bank (MDB), as well as contributions to the International Development Association and the Asian Development Fund, among others.

China has created a new partnership facility (PDF) with the World Bank Group, a new $2 billion African Growing Together Fund at the African Development Bank, and a $2 billion Co-financing Fund for Latin America and the Caribbean with the Inter-American Development Bank. Additionally, China has poured funds into smaller regional banks, including the Caribbean Development Bank (PDF) and Africa’s AfriEximbank.

Though small relative to China’s substantial (though diminishing) bilateral loans, these multilateral funds have been an alternative avenue to channel capital overseas into LICs. They’re also another way to bolster its presence and influence in these MDBs and in the wider international system. Elsewhere, we have also seen a desire for multilateral cooperation in China’s Belt and Road Initiative through the creation of the Multilateral Cooperation Center for Development Finance. This suggests that Chinese development cooperation is something that works within the system, rather than undermining it.

However, on the question of debt – a crucial challenge for LICs in the past year – the appetite for multilateralism does not extend far. Though China joined the G20 Debt Service Suspension Initiative, this covers only a paltry proportion of total debt service. Its debt relief extends only to interest-free loans, which make up less than 5% of the country’s total loan commitments. The new white paper makes clear that debt repayment is resolved through “bilateral consultation” – and we are unlikely to see any Paris Club-type solution soon.

Barnaby Willitts-King: China's growing interest in humanitarian challenges

China’s new white paper points towards a more strategic approach to its longstanding interest in disaster response. A short subsection in previous white papers, the part on ‘responding to global humanitarian challenges together’ may signal an elevation of humanitarian issues as a priority. It details China’s role in the Covid-19 response but also disaster relief and recovery, support to refugees and food security. But it is unclear how significant this shift will be in practice.

This reflects China’s growing interest in engaging in humanitarian action. It partly complements other foreign policy and economic priorities, but is also part of the country being a ‘responsible great power’ and a long-standing tradition of the state as a humanitarian actor. The Covid-19 pandemic and China’s mask and vaccine diplomacy have only intensified this engagement.

But China’s discomfort with what are seen as ‘western’ humanitarian principles – and its own human rights record – could undermine its credibility with western donors in providing assistance based on need rather than to bolster political and economic relationships. Nonetheless, the stated aims and philosophical underpinning of Chinese aid in the white paper in terms of solidarity are no less altruistic than other countries’, and some recipient countries may also welcome the absence of conditions on assistance.

Still though, while China is doing more in the humanitarian aid space than is reflected in simple comparisons of reported contributions (suggesting around $30 million per year), its influence on the system as a whole is still in its infancy. Chinese humanitarian aid tends to be more projectised, bilateral and coordinated with affected countries rather than international donors – supporting hospitals and physical infrastructure or sending personnel. But the white paper now importantly frames it in terms of contributing to tackling global challenges and improving the global governance system.

How far this shift is about refashioning the multilateral system towards China’s own priorities, including Covid-19 response, or about building genuine partnerships with diverse partners, will be important to monitor. A forthcoming Humanitarian Policy Group paper will suggest ways in which western governments can meet China halfway to cooperate on global health and disaster response through the multilateral system.

Linda Calabrese: economic growth and the Belt and Road Initiative

Situating China’s role in the global development context, the white paper is striking for several reasons. The Chinese government’s priorities towards other countries outlined in the paper very much reflect China’s own development experience. These include:

  • the crucial role of economic growth driving the development process
  • the improvement of food security by increasing agricultural productivity and rural livelihoods
  • and the importance of knowledge and technology transfer and of health and education systems.

Other areas, such as attention to climate issues and gender equality, seem more reflective of the issues that the Chinese government has recently shifted its focus on , rather than those that were the centre of attention during China’s own development process.

The role of economic growth is woven throughout the documents, but it does not take centre stage. The importance of improving infrastructure and access to energy, as well as of sustaining economic growth through industrialisation and the digital economy, are present among many other priorities. Here, again, industrialisation and infrastructure are very much drawn from China’s domestic experience, but the emphasis on green infrastructure and digital technology are new, emerging areas, of which we may see more in the future. Echoes of the Digital Silk Road and of ‘greening the Belt and Road’ are very strong here.

What really catches my eye is the role of the Belt and Road Initiative (BRI) in the document. The BRI is defined as a ‘major platform’ for China’s international development cooperation, and it is presented as a framework to expand aid to low- and middle-income countries. Initially, the BRI didn’t necessarily have this ‘developmental’ spin, but as we said elsewhere, it is a fluid concept and can be adapted to fit different needs.

All pillars of the BRI (infrastructure, trade, financial connectivity, policy and people-to-people exchanges) are seen as contributing to China’s international development objectives. The white paper provides lots of examples of ongoing programmes, from infrastructure building to training and donations, that work within both a development and a connectivity framework. The very idea of the BRI – the increased connectivity among countries for mutual benefits – can be found throughout the document, and it is difficult to disentangle it from the vision of development presented in the paper. To me, this indicates that the BRI will remain a framework for China’s foreign engagement in the future.

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