No strings attached? Chinese foreign aid and its implications for the international aid regime

Abstract

The emergence of China as a significant provider of development assistance operating outside the dominant aid system has prompted heightened interest within academic, public, and policymaking circles. This increased presence in many developing countries is changing the dynamics of ‘development’ and foreign aid provision, in ways that are only beginning to be seen and understood. There is a tension between the call for China to become a ‘responsible stakeholder’, and thus play by and reinforce the existing norms, rules and expectations, and the increasing pressure for the international system, including the international aid regime, to be reformed. China’s foreign aid approach and policies, and how it engages with the aid regime, if at all, will therefore be significant in this regard. At the same time, China’s foreign aid provision has been subject to much critique – in the Western discourse and also from within recipient communities.

This thesis examines the role of China as a provider of foreign aid and the implications this has for traditional donors and for the dominant international aid regime. It critically analyses of the international aid regime that currently shapes the provision of aid, arguing that the impact of Chinese aid should be viewed against the backdrop of imperatives to reform current aid institutions and practices. Drawing upon field research in the South Pacific and China this thesis provides detailed analysis of Chinese aid norms, practices, and mechanisms, enabling comparison with traditional donor aid and providing a significant contribution to the currently limited data on Chinese aid.

Through examination of how China is perceived and received within ‘recipient’ countries, including critical analysis of the notion of a ‘China model’, this thesis demonstrates that China is generally viewed as a complement rather than an alternative to traditional donor aid. It also analyses the processes of engagement and interaction between China and traditional donors, particularly the role of South-South Cooperation (SSC), and provides empirical evidence of the impact of the regime on China’s aid policies and practices and the ways in which China is having an effect on traditional donors. It argues that China is using the SSC framework in seeking to maintain its identity as a ‘developing’ country and as a way to distinguish itself from traditional donors, but at the same time the aid regime is expanding to (try to) incorporate South-South Cooperation to assist in maintaining its relevance.

This thesis finds that whilst there is evidence of China’s increased engagement with the aid regime and the beginnings of internalisation of some of its components, China currently remains resistant to deeper involvement. Traditional donors and aid regime institutions are, however, continuing efforts to ‘engage’ with China in an attempt to both socialise Chinese actors and become more inclusive, representative, and thus legitimate. This thesis argues that China’s decision to continue to operate outside the regime is affecting the relevance and legitimacy of the aid regime, but the perception that China is ‘undermining’ aid regime norms and standards does not, at this stage, match reality.