How China Delivers Development Assistance to Africa
Dr Martyn DaviesExecutive DirectorCentre for Chinese StudiesStellenbosch UniversitySouth Africa
Beijing, China, 27th March 2008
Contents of Discussion
Objectives of the research
Drivers of China’s aid policy
Components of China’s aid policy
The role of policy banks
An evaluation
Recommendations
Summary
Objectives of the Research
To evaluate the dynamics of foreign aid policy
making in the PRC Government & to gain a better
understanding of the institutions involved
To gain an empirical understanding into China’s
ODA in 3 African country case studies - Ethiopia,
Ghana & Zambia
To provide informed commentary on the
implications for the continent, traditional donors &
China’s development assistance itself in Africa
Drivers of China’s Aid Policy
What is aid? China’s perspective
Drivers of China’s foreign aid policy towards Africa
China’s priorities in Africa
How much is China giving?
Who gives? National & provincial disbursements
FOCAC – Dialogue & direction
Components of China’s Aid Policy
Types of Chinese Aid
• Grant aid & technical assistance
• Concessional finance & interest-free loans
• Debt Relief
Aid policy formulation – Who decides?
Project Monitoring
The Role of Policy Banks
China Export-Import Bank (EXIM)
Infrastructure financing / export credits
Sole provider of Chinese concessional loans
More than 300 projects in Africa by June 2007
MoU with World Bank
China Development Bank (CDB)
Not an aid disbursement bank
Loans of US$ 1 billion outstanding to Africa by March 2007
Launch of the CADF – commercial fund
An Evaluation
South-South Cooperation
The Aid & Trade intersection
Roll out of the Angola Model
Political Drivers & Asian competition
The notion of conditionality
Recommendations for African Stakeholders
Gain understanding of the Chinese approach to aid
Regional Economic Community Coordination
Poor Coordination may lead to Chinese aid fatigue
Avoid dividing traditional & emerging donors
Strengthening the African voice
Improving reporting mechanism/ aid monitoring
Improving debt reporting
Recommendations for the PRC
Effective aid management
Cooperation with traditional donors
Greater transparency on aid & loan agreements
Broadening the FOCAC constituency
Engaging African multilateral institutions
Recommendations for Traditional Donors
Building constructive partnerships with relevant
Chinese organizations
Improved donor harmonization
Strengthening Goal 8 (Global Compact) of the MDGs
Avoiding politicization
Summary
This is undoubtedly a politically charged topic
Is it a case of Morality vs. Mutual Benefit?
A coalition finance-investment model is emerging
Risk in Africa is being re-calculated
Defining & deciding on the applicability of the “China developmental model”
Harmonization / consolidation is all important
Africa needs to be more proactive
China could pursue greater transparency to diffuse suspicion
China’s engagement offers a massive opportunity to the continent
Dr Martyn Davies
Executive Director
Centre for Chinese Studies
Stellenbosch University
South Africa
T +27 21 808 2840 F +27 21 808 2841
PO Box 3538, Matieland, Stellenbosch, 7602, South Africa
www.ccs.org.za
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