International aid or foreign aid refers to the international transfer of funds, goods or services from a country’s institution, its people or an international organization to another country or another international organization. The aim is to solve the difficulties facing the recipient or to achieve some specific objective held by the donor.

Main types

According to its purpose, international aid is usually divided into three categories. The first is economic aid, the most common type of assistance, mainly providing economic resources such as capital, civil technology and civil industrial equipment to help the recipient country achieve economic development. The assistance process is mainly managed by economic and social welfare departments.

As the main form of current international economic aid, international development assistance is a form of transfer payment from developed countries to developing countries, with the aim of helping developing countries or regions develop their economies and improve social welfare. Official development assistance is the main form of international development assistance, and it is mainly issued by state and intergovernmental organizations. The Development Assistance Committee (DAC) requires that loans provided by its members must be of a preferential nature, and the grant must be not less than 25% of the total.

The second is military aid, which mainly provides military resources such as armaments, military technology, military information and funds for military use so as to enhance the defense capabilities of the recipient country. The process is managed by military departments.

The third is humanitarian aid, mainly providing funds, supplies, personnel and technology to the recipient when it is facing survival crises such as natural disaster, famine, epidemic and war. General economic aid projects often contain aid of humanitarian nature, such as epidemic prevention and treatment projects and rural drinking water projects.

History

As the world’s largest developing country, the PRC has been both a recipient and a donor country of international aid since its founding in 1949. In the early days, China mainly received assistance from the Soviet Union and some other Eastern European countries. After the reform and opening up, Japan, European countries, the World Bank and many others provided a lot of official development assistance to China, contributing to China’s economic development. The aid from Japan once accounted for 80% of the total aid China received. As the aid provided by Japan was mainly in the form of Japanese yen loans, most was used to purchase Japanese technology and equipment.

The PRC began to provide foreign aid to other countries at the beginning of its establishment. In the 1950s, China began to provide economic and military aid to socialist countries and developing countries in Asia, Africa and Latin America. The Eight Principles for Economic Aid and Technical Assistance to Other Countries, announced by Premier Zhou Enlai in 1964, helped form an aid concept of equality, mutual benefit and non-interference in other’s internal affairs. After the reform and opening up, China has been proposing the “four principles” of “equality and mutual benefit, pursuing practical results, adopting various methods and seeking common development,” aiming to implement foreign aid projects based on laws of market economy. After entering the 21st century, due to the continuous growth of China’s economy, the amount and scope of its foreign aid has become larger and wider.

Because China’s international aid began in the context of national liberation and national independence in Asia, Africa and Latin America, and also due to its status as a third world country, China’s international aid has been an equal resource transfer. China rarely uses the concepts of donor country and recipient country, but generally uses the concept of economic cooperation, emphasizing equality and mutual benefit between the two. China’s international aid is mainly a form of international economic cooperation, and as such was managed by the Ministry of Commerce (up until 2018). The main form of funding is low-interest and interest-free loans and unpaid grants. When providing international aid, China abides by the political principle of non-interference in other countries’ internal affairs, insisting that aid should have no political terms attached.

Way forward

With the remarkable growth of comprehensive national strength and the continuous advancement of the Belt and Road initiative, both the domestic and international circumstances have put forward new requirements for China’s foreign aid. In addition, for the protection of overseas interests and for a wider and deeper participation in global governance, the strategic planning and policy operation of China’s foreign aid should also advance with the times.

First of all, China should boldly innovate with its concept of international aid. For a long time, the concept of China’s international aid has been based on the “eight principles” proposed in the 1960s and the “four principles” proposed in the 1980s. Some of these principles still have practical significance. However, it is undeniable that these principles were of their own time and mainly serve economic aid. At present, considering how China as the world’s second largest economy has extensive political and security interests worldwide, the concept of its international aid naturally needs to advance with the times.

China’s international aid should establish the concept of upholding justice while pursuing shared interests. Meanwhile, we should also pay attention to the strategic coordination between international aid with diplomacy, trade and investment.

Second, China’s internal system of international aid needs continuous reform. Since 2018, China has made significant progress in the establishment of its international aid agencies, the improvement of management coordination mechanisms, and the construction of supervision and evaluation mechanisms. The newly established China International Development Cooperation Agency has taken over personnel and foreign aid coordination functions from the Department of Foreign Assistance of the Ministry of Commerce, and it has assumed the duty of coordinating international aid with the foreign policy objectives of the Ministry of Foreign Affairs. However, the integration of international aid functions that were originally scattered across various departments has not yet been completed, and a lot of work remains to be done to strengthen coordination between foreign aid and international economic cooperation.

Finally, China should actively participate in the international aid system. In recent years, China has become one of the largest aid provider among DAC’s non-member countries, and the DAC has also attached increasing importance to cooperation with China. Effective participation in the international aid system will make China’s foreign aid receive more international supervision and clearer evaluation, preventing the invalid duplication of aid and improving effectiveness. In doing so, China can learn from mature aid management experience and improve its aid capabilities; furthermore, developed countries will better see and recognize China’s contributions to international aid.

Currently, China’s international aid standards still cannot meet those of the DAC, and there are still differences in aid concepts and methods between the two. Therefore, the reasonable way for China to participate in the Western-led international aid system should be a selective participation, gradually realizing the transition from joint research and experience sharing to information exchange, action coordination and even cooperation. In addition, China should continue to leverage its advantages in South-South cooperation and work with other developing countries, especially other emerging economies, and to promote the diversification of international aid models.

Wang Xiaoke is an associate professor from the Northeast Asian Studies College at Jilin University.

(Edited and translated by YANG LANLAN)