"New" Donors: A New Resource for Family Planning and Reproductive Health Financing?

Malea Hoepf Young

Country study: China

China’s aid program is somewhat similar to India’s in terms of its long history of donorship and technical assistance, as well as ties between its foreign policy and its economic expansion and the subsequent need for new markets, energy, and natural resources. However, China’s investment and aid to other developing countries is much larger and more difficult to track than India’s, as China does not formally release its aid figures, let alone report them to the DAC. In 2005, Premier Wen Jiabao said that China had expended $3 billion over the preceding 5 years. The U.S. treasury estimated that China gives $500 million annually to North Korea while analysis of press reports suggests that it provides $888.9 million to Asian countries, and $800 million annually in grants and loans to Africa.⁴⁵ Its enormous foreign reserves and highly publicized relationship to the Sudanese government ­– problematic for public relations in the run up to the Beijing Olympics­ – have drawn international attention and criticism. A recent cover story of The Economist described China as “The New Colonialists,” a label China increasingly battles. However, while many aspects of China’s aid are deeply problematic, recipient countries perceive many benefits from partnership with a country with a track record of rapid economic expansion and monumental poverty reduction, and with a seat on the UN Security Council.⁴⁶

Like India, China has a longstanding policy of aid to other developing countries. China provided active support to independence movements in Africa in the mid-20th century, and provided various kinds of support for post-colonial reconstruction, including both technical training and capital intensive projects to build infrastructure.⁴⁷ China's articulation of an aid philosophy began in the 1950s, with support to India and the building of the Zambia-Tanzania railway. In 1964, then-Prime Minister Zhou Enlai articulated the principles of noninterference in the internal affairs of other countries, and equal relations based on mutual benefit, solidarity and cooperation among developing countries, which continue to inform Chinese donorship, while Mao Zedong urged that as China developed, it should increase aid levels to help other countries do the same.^{48 49}  Historically, Chinese aid projects focused on building self-reliance, such as training of foreign students in Chinese Universities, and agricultural and technical assistance, which were characterized by interest free loans and investment in projects that could be built quickly, including large stadiums in developing country cities. These programs were generally tied to use of Chinese construction companies and workers, and also had the stipulation of gaining support for the One-China Policy by requiring recipient countries to end their diplomatic relations with Taiwan.⁵⁰ Chinese foreign aid was shaped further by geopolitical struggles with the US in the 1950s and 60s, and with the USSR from the late 1960s to early 1980s. Aid rose as high as 6 percent of public expenditure, but was scaled back in the early 1980s, when China began receiving large amounts of ODA from other countries and focused on its own economic growth.⁵¹

China’s foreign aid program became more active again in the 1990s, contributing to an International Monetary Fund (IMF)-led relief effort for Indonesia in 1998 after the Asian Financial Crisis, contributing to major humanitarian aid for Afghan reconstruction in 2003, and contributing $63 million in bilateral tsunami relief in 2006.^{52 53} Most Chinese aid has been bilateral in nature (although it has included contributions to UN agencies, including the World Food Program).⁵⁴ The country’s aid structure is split between multiple ministries, including the Ministries of Foreign Affairs, Finance, and Commerce, and a regulatory framework for its aid has yet to be developed.⁵⁵ In contrast to policies earlier in the 20th century, Chinese aid now commonly takes the form of preferential loans, rather than the interest-free loans provided in the past, and there has been an increase in venture capital and business-to-business cooperation.⁵⁶ China has increased funding for large infrastructure projects. While loans are generally tied to the purchase of Chinese goods and services, there are usually no other conditions, such as environmental or social, attached.⁵⁷ China operates largely outside the DAC international donor community, but has increased its participation, including contributing to a DAC peer review of the U.K.’s Department for International Development (DFID).⁵⁸

While research found scant consideration of family planning and reproductive health in China’s assistance, its aid program has long been involved in health sector work. China has been sending medical teams to other countries and building health centers since the mid-20th century. Twenty thousand Chinese doctors and nurses have been sent to Africa since 1963, and currently 1,100 are active on the continent.⁵⁹ Then-premier Hu Jintao’s 2005 pledge to increase aid also included plans to build and improve health centers, and China has pledged to provide anti-malarial drugs, as well as training for local health staff.^{60 61}  More recently, China donated $500,000 to Somalia through the World Health Organization (WHO) to expand access to health services and supplies to internally displaced persons.⁶²

Africa, Oil, and Chinese Aid

While China has traditionally offered large amounts of aid to Asian countries, ­ both the Chinese government and Chinese businesses have become increasingly involved in Africa over the last decade. Between 1994 and 2006, the China ExIm bank gave 259 loans to African countries, concentrating on Angola, Nigeria, Mozambique, Sudan and Zimbabwe, mostly for large infrastructure projects, including energy and mineral extraction as well as multi-sector transport, telecom, and water projects.⁶³ In 2003, Wen Jiabao announced debt relief of $1.3 billion for 31 African countries and outlined plans for increased China-Africa cooperation, aid, and investment.⁶⁴ In January 2006, the Chinese Ministry of Foreign Affairs stated that its contributions to Africa would be based on principles of peaceful coexistence, "sincerity, equality and mutual benefit, solidarity and common development."⁶⁵ China announced that it would double aid to Africa, with a package including $5 billion in loans and grants, $5 billion for a China-Africa development fund, significant debt forgiveness, training of 15,000 Africans and increased scholarships for African students to study in China.⁶⁶ China purports to view African countries as partners for investment and not solely as recipients of aid, and does not criticize countries for internal human rights issues, nor refuse to partner with countries on that basis.⁶⁷

China’s intensified engagement in Africa has been driven by the rapid growth of the Chinese economy and its need for energy. The world's second largest energy consumer, China imports 25 percent of its oil from Africa, and is actively prospecting for oil in several African countries.⁶⁸ Two-way trade with Africa totaled more than $50 billion in 2006, with oil imports by China accounting for 60 percent of this trade; more than 800 Chinese companies are doing business in about 50 African countries.^{69 70} In return, however, China is accused of flooding African markets with inexpensive Chinese-made goods that are damaging to fragile African industries, such as the textile sector. China has taken some measures to rectify this, exempting some commodities from tariffs when importing from the 25 poorest African countries. This is a greater problem in countries that are not major oil exporters, and who are seeing huge trade imbalances with China. Further, the Chinese are criticized for using Chinese workers, both in their aid and in the companies working in Africa, when many positions could be filled by African workers, thus helping stimulate local economies.⁷¹ For example, while investing heavily in oil development in Sudan, China has been criticized for importing Chinese labor rather than hiring Sudanese workers.⁷² This imbalance is not unique to China, and is a problem frequently linked with international trade. It is important that all countries, not just China or other emerging donors, implement beneficial trade policies, and not attempt to make up for harmful trade policies with foreign aid.

While increased aid flows are welcomed, many developed and developing country leaders alike are concerned about China’s approach. The country will have to battle perceptions that its trade relationships are neocolonialist, and also defend its relationships with countries with records of corruption or human rights abuses, such as Sudan and Zimbabwe. Lack of restrictions on its aid funding lead some to question whether aid funding is being used correctly, and if its benefits are trickling down past country elites.⁷³ Further, China’s tied aid, such as using Chinese workers to implement construction projects, limits capacity-building in recipient countries. There is also little evidence of the use of benchmarks and evaluation in China’s aid programs.⁷⁴ There are also legitimate concerns that Chinese aid and trade to Africa, mainly exploitation of natural resources, will prop up bad governments and provide funding for ongoing conflicts.⁷⁵ However, China's aid, with its limited conditions, is often quicker, less expensive, and more flexible to local conditions than Western aid. As such, China should be engaged and encouraged to be more open about its work and not be viewed solely as a threat.⁷⁶

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