Can China fill the void in foreign aid?

The United States considerably reduces its provision of international aid, a key question that has emerged from the world of southern and traditional world donors is whether China will exploit the opportunity and will fill the void. A meticulous examination of nature, size, type and motivation of Chinas aid reveals the improbability of China replacing the American Agency for International Development (USAID) in the foreign assistance space.

There is a significant gap in the size of the help

First, Chinas’s foreign aid has always been a fraction of the Americas. It is a common erroneous perception that the initiative of the belt of Chinas and the road (BRI) is an aid. In reality, the overwhelming majority of BRI funding is loans, including $ 327 billion paid by the Chinese export-important bank at the end of 2022, and investments, including $ 300 billion invested by Chinese commercial entities At the end of 2023. Fudan University put Chinas Cumulative BRI Commitment between 2013 and 2023 to 1.053 Billion of dollars: approximately $ 634 billion in construction contracts and $ 419 billion in non -financial investment. The BRI is essentially made up of commercial activities with a shade of development financing. This is why they are often called BRI engagementAnd never as a foreign help.

In our opinion government dataDuring the year 2023, the USAIDS budget was around $ 42 billion, including around $ 17 billion for governance, $ 9.4 billion for humanitarian aid, $ 7 billion for health and population, $ 3.5 billion for education, $ 740 million for infrastructure, $ 720 million for economic development. USAID was not the only government's implementation agency for foreign assistance. The State Department also had a budget of nearly $ 19 billion for foreign assistance, as well as the Ministry of the Treasury (approximately 2 billion dollars), the Ministry of Agriculture (approximately $ 450 million), etc.

In comparison, Chinese foreign aid is much smaller. According to the 2021 version of Chinas Foreign Aid White White Paper International development cooperation of Chinas in the new eraBetween 2013 and 2018, the total foreign aid of Chinas reached 270.2 billion RMB (approximately $ 42 billion on the basis of The average exchange rate during the same period). This means that China spent an average of $ 7 billion on foreign aid each year during this period. But during the same period, the United States spent $ 286 billion on foreign aid,¹ or $ 47.7 billion a year. From 2013 to 2018, Chinese aid represented only 14.6% of what America spent.

China has not published its help data since 2018. But A report by the Ministry of Commerce in 2024 (MOFCOM) Put the average annual amount of Chinese aid at 20.5 billion RMB from 2013 to 2022 (approximately 3.13 billion dollars at the average exchange rate during this period). The difference between this data and the above data is most likely due to the multilateral aid that China provides to international organizations, which goes through the Ministry of Finance rather than MOFCOM. But COVVI-19 and Chinas travel restrictions and the economic slowdown have also contributed to the drop in Chinese aid since 2020. The MOFCOMS Foreign Aid budget has dropped by 20% compared to 19.7 billion RMB (about $ 3 billion) in 2018 has 16.8 billion RMB (approximately 2.6 billion dollars) in 2021.

The current size of the Chinese bilateral foreign aid can be deduced from the Budgets of the Chinese two primary aid agencies: the Ministry of Commerce and the Chinese Agency for Cooperation for International Development (CIDCA). By sound mandateMOFCOM is responsible for foreign aid, design and implementation of foreign aid policy and plans, promote foreign aid reforms, compile foreign aid plans, decide foreign aid projects and organize their implementation, and manage the use of government funding in the foreign aid category. In comparison, CIDCAS Liability is more on the management side: foreign aid strategy, global size of foreign aid, Chinese aid priorities, feasibility studies, coordination of policies with beneficiary countries, as well as monitoring and evaluation of foreign aid projects.

MOFCOMS Foreign aid budget for 2024 is 20.48 billion RMBAbout 2.82 billion dollars. Foreign assistance of the Cidcas is much lower: 54 million RMB for foreign aid and 131.2 million RMB for cooperation in international development, bringing us a total of 186.2 million RMBAbout $ 25.62 million. The total foreign aid budget of the two institutions is $ 2.85 billion for 2024. This number is aligned with the overall trend of the economic slowdown in Chinas and the reduced commitment since COVID-19. But that also means that the volume of Chinese aid is only a fraction of American foreign aid.

Different reasons and objectives

The United States and China also use a very different help. According to official Chinas documents, Chinese foreign aid is divided into three categories: subsidies, loans of zero interest and concessional loans. Subsidies are traditional foreign aid projects in Western definition, including social protection projects, capacity building, technical assistance, humanitarian assistance, material support and South-South cooperation aid. Loans of zero interest are used to develop public facilities and social projects. Historically, zero interest loans are generally forgiven possibly. And concessional loans are used to develop major infrastructure projects and production projects in developing countries, including equipment, machines and technical support, among others.

Concessional loans are the most misunderstood category. The director of Chinese concessional loans is increased on the market by the Export Bank of importance of China, but the lower interest rates are subsidized by the budget for foreign aid in Chinas, which means that Chinese foreign aid is used to compensate for the differences between concessional loan interest rates and the interest rates of commercial loans.

If we examine the historical distribution of the budget for the foreign aid of Chinas, we obtain the data below:

A striking point of view of data is the significant increase in foreign assistance expenses in concessional loans since 2009, which aligns the Chinaas thrust for hard infrastructure since 2010 and Sous Bri. It is well known that China's concessional loans are aimed at promoting the export of Chinese contract and contractual services, often using natural resources from beneficiary countries as guaranteed. Since Xi Jinping took over in 2013, the weight attributed to subsidies has increased, which coincides with the Chinalian push for a soft power influence, but it is even smaller than concessional loans.

Data also shows that Chinese spending on what USAID traditionally concentrates, such as capacity building and humanitarian assistance, less than 50% of its total foreign aid budget, at 3.29 billion dollars in 2013-2018, and potentially around 1.5 billion dollars per year in the 2024 budget if the same distribution remains.

Does China intend to intervene?

Given the slow economy and the uncertainty associated with the Trump administration, China does not consider foreign aid as a priority in the immediate future. The withdrawal of American foreign aid will leave China with a larger weight in a smaller space, but that does not mean that China can intervene to fill the void. Given the selfish reasons that guide the Chinese aid program, the USAIDS portfolio of traditional humanitarian work does not overlap Chinese aid work.

China has its own capacity building programs, such as the training of political elites, government representatives and experts in the matter of Southeast Africa and Asia. These programs have a strong component of the promotion of the Chinas governance model and the export of the political ideology of China. China is unlikely to increase these programs simply because the United States is no longer also engaged in aid to governance or democratic institutions. However, left undisputed after the withdrawal of the USAID programming, the influence of Chinese capacity building projects could develop in long -term beneficiary countries.

The Chinese tradition of bilateral aid negotiations also means that the demand for Chinese foreign help from less developed countries will be decided on a case -by -case basis. Chinas Ambassador to Syria recently encounter With the new president of the country, Ahmad al-Sharaa. But any discussion on the Chinese aid for the post-conflict reconstruction of the Syries will begin with the Chinese question of Uighur activists serving in the Syrian army, just as China has conditioned more aid as well as the diplomatic recognition of the Afghan Taliban diet during the deportation of Uighur activists living in Afghanistan. Similarly, in the post-conflict reconstruction of Ukraine and Gaza, it is unlikely that China is freely removing free aid, but will rather seek political, diplomatic and economic yields for its aid. For example, the contribution of Chinese to the reconstruction of Gazas will probably be associated with service contracts funded by the Gulf States for Chinese entrepreneurs; Its contribution to the reconstruction of Ukraine will be potentially linked to future economic projects in the country. In both cases, China will try to use its contribution to the consolidation of links with the Muslim world and Europe, respectively.

For global non -traditional security threats such as food security, climate change, health and disease control, China is more likely to use multilateral organizations. This complies with the historical behavior of Chinas. The world has really not seen China take the initiative unilaterally on global challenges. This does not mean that China will not increase its contribution to multilateral organizations to solve these problems, but such increases can neither be supposed to be guaranteed. Most likely, China will operate under the aegis of an effort led by a little than to assume the responsibility to meet one of these challenges by itself or as a chief of a country consortium.

Even with its limited assistance levels, China will nevertheless seek to exploit the opportunity of an American withdrawal to portray the United States as the great irresponsible power, even if the levels of US foreign assistance after the reduction continue to go beyond Chinese foreign aid. With the dramatic nature of the way the American reform of foreign aid takes place, the Chinese message will be noisy and resonates particularly in the world.