Contributions to the Asian Infrastructure Bank boost China’s foreign aid

19 June 2018

China’s foreign aid has tripled in the past decade and has been boosted in recent years by contributions to the Asian Infrastructure Investment Bank (AIIB), according to a new study recently conducted by the Japanese International Cooperation Agency (JICA).

The study by Naohiro Kitano concluded that Chinese foreign aid in 2016 amounted to US$5.8 billion, a year in which it increased by nearly US$900 million, approximately the amount of contributions for the initial capital formation of the AIIB, which are expected to reach a total of US$29.8 billion.

The same study showed that donations and loans on preferential and other interest-free terms in Chinese foreign aid decreased between 2012 and 2015, remaining at the same level since then. However, multilateral foreign aid is on the rise, from US$300 million in 2014 to US$1.4 billion in 2016.

Chinese net external aid rose from just over US$2 billion in 2007 to close to US$6 billion in 2016, according to data presented by Kitano.

China’s foreign aid is defined in the study as the sum of donations and interest-free loans granted by the Ministry of Commerce and managed by other departments responsible for foreign aid, as well as grants awarded by the Ministry of Education to students from developing countries, interest subsidies on loans, preferential loans managed by the Exports and Import Bank of China as bilateral external aid, and subscriptions and contributions to eligible international organisations as multilateral external assistance.

The AidData research centre at William & Mary University recently reported that Angola was the third-largest destination of Chinese funding abroad and the largest in Africa, amounting to US$16.556 billion in the period between 2000 and 2014.

Angola ranks fourth in terms of the number of projects funded by China, with 110 projects, overtaken by Cambodia with 168 projects, Pakistan with 121 and Zimbabwe with 120 projects.

AidData researchers also wrote that China donated or loaned US$354.4 billion to other countries over the 15-year period analysed, approaching the total amount granted by the United States of America, which stood at US$394.6 billion.

“It can be said that the US and China are now rivals for their financial transfers to other countries,” said AidData chief executive Bradley C. Parks. (macauhub)