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Opinion: Chinese Foreign Aid Reform And Implications For Africa

Opinion: Chinese Foreign Aid Reform And Implications For Africa

From Brookings. Story by Yun Sun, a fellow in the Africa Growth Initiative, focusing on China’s relations with Africa and U.S.-China cooperation in Africa.

Over the past several years, an increasingly strong voice has risen in China calling for the reform of its foreign aid policies and systems.

In response to this voice, the Ministry of Commerce, MOFCOM, initiated a campaign in 2014 to “comprehensively deepen the reform of China’s foreign aid system.”

MOFCOM is scheduled to introduce mid- to long-term policy guidelines on Chinese foreign aid in 2015.

While the changes to China’s foreign aid may not be as drastic as some have hoped, they will nonetheless affect the direction and practice of China’s foreign aid as an important policy instrument.

Few expect the top leadership to make any drastic moves in the near future. Nevertheless, technical reforms, internal adjustments, and enhanced multilateral cooperation are indeed on the horizon for China’s foreign aid.

Africa, as a primary recipient of Chinese foreign aid, is inevitably going to be affected by these reforms. On a strategic level, the rising voice on the need to emphasize the “aid” rather than the commercial aspects in China is gradually influencing the thinking and making of China’s foreign aid policy.

China is already enhancing its input in capacity building in less-developed African countries through vocational schools and technical training.

The momentum is expected to strengthen by this aid reform. This facilitates cooperation with more experienced traditional donor countries and multilateral development institutions while improving the technical capacity of China’s own foreign aid system and staff.

However, China may not shift the bulk of its foreign aid away from concessional loans for infrastructure in the near future. Nevertheless, combined with China’s development financing, these financial resources will be highly valuable for Africa’s vast infrastructure development demand.

It should be noted that, although China’s foreign aid reform is primarily a domestic campaign, recipients, especially African countries could play an important role in shaping the discourse.

To fully utilize China’s foreign aid resources and potential, African countries should not stay passively as mere recipients, but actively voice their needs and concerns.

Only through interactive and collaborative efforts could China’s aid to Africa be shepherded for the maximum benefits for the recipient countries.

If there is one voice that China’s aid community cannot afford ignore, it is that of Africa itself.

Read more at Brookings.