The Role of China's Foreign Aid in the Economic Rise of This Country in the Years 2000-2021

Document Type : Research

Authors

1 Associate Professor of International Relation, Dept. of International Relation, Faculty of Law and Political Sciences, Kharazmi University, Tehran, Iran.

2 Professor of International Relation, Dept. of International Relation, Faculty of Law and Political Sciences, Kharazmi University, Tehran, Iran.

3 PhD Student of International Relation, Dept. of International Relation, Faculty of Law and Political Sciences, Kharazmi University, Tehran, Iran.

Abstract

Extended abstract
1-Preface
Over the past four decades, particularly between 1978 and 2015, China has experienced impressive and consistent economic growth, with an average annual growth rate of 9.8%. This remarkable economic expansion has catapulted China to the position of the second-largest economy in the world. Notably, China's poverty reduction program has been one of the swiftest and most successful in human history.
China has utilized various strategies to realize its goal of becoming a major economic power, with foreign aid playing a significant role in this endeavor. Today, China stands as the world's second-largest donor nation after the United States. In this context, China's foreign aid program has undergone substantial changes, both in terms of quantity and quality, especially since the start of the new millennium in 2000. These changes have garnered attention from the international community.
As part of its broader strategy to bolster and maximize its economic influence on a global scale, China has introduced and implemented a diverse array of foreign aid strategies and initiatives. This article aims to explore the relationship between the expansion of China's foreign aid programs and its ascent to economic power. Specifically, the research question revolves around how China's foreign aid program, spanning from 2000 to 2021, has influenced the country's rise as a major player in the international economy. The hypothesis suggests that during these years, China strategically employed foreign aid as a tool to align with its economic ascent, both in bilateral and multilateral contexts and in shaping the international order. This was achieved through the quantitative expansion of foreign aid and the application of innovative methods.
2- Research Methodology
This study employs precise indicators and the descriptive-explanatory method to illustrate how China leverages its foreign aid program to enhance its economic influence in the domains of bilateral and multilateral relations, as well as in shaping the international order.
3-Theaorical framework and discussion
This essay has aimed to provide a comprehensive account of the qualitative and quantitative aspects of China's foreign aid programs. It has also sought to elucidate the link between the expansion of China's foreign aid initiatives and its increasing global influence by utilizing indicators derived from the research's theoretical model.
To test the hypothesis, the realist approach to foreign aid was adopted as the theoretical framework. This perspective aligns foreign aid with the objectives of aid donors, who seek to enhance their influence through aid provision. In this context, China's aid programs are viewed as a means to expand its economic sway. Different definitions of aid were presented, highlighting China's distinctive definition as an emerging donor, which deviates from the traditional donor definitions. This definition, combined with the realist approach, served as the foundation for analysis, alongside the indicators outlined in Figure 1.
The indicators demonstrate that China is actively pursuing power expansion in both bilateral and multilateral relations and international order-related spheres. China provides bilateral and multilateral aid with the goals of fostering increased trade, mitigating unemployment, promoting international use of the Chinese currency, securing access to energy resources, and accessing the consumer markets of recipient countries.
In the realm of international order, China's aid efforts are geared toward establishing economic supply chains, creating institutions in the financial and commercial sectors, and advocating for its development model. These objectives are elucidated in Figure 2. This distinction represents an innovative aspect of the present research.
4-Conclusion
To substantiate the assertion and support the research hypothesis, the author furnished instances of both bilateral and multilateral objectives, as well as international order objectives. In contrast to China's self-proclaimed intentions, the empirical evidence presented in this thesis corroborates the conclusion that China's foreign aid is primarily directed towards bolstering its influence in the specified domains, rather than solely focusing on addressing the recipient's needs.

Keywords

Main Subjects

References

References
Bavier, J. & Strohecker, K. (2021), An election, a mine deal and China loom over Zambia’s IMF talks. Reuters. https://www.reuters.com/article/us-zambia-debt imf/an-election-a-minedeal-and-china-loom-over-zambias-imf-talks idUSKBN2AB0E3.
Brautigam, D. & Xiaoyang, T. (2012), Economic Statecraft in China’s New Overseas Special Economic Zones: Soft Power, Business or Resource Security?. International Affairs, 88(4), 799–816. doi: 10.1111/j.1468-2346.2012.01102.x
Copper, John F. (2016), China’s Foreign Aid and Investment Diplomacy, Nature, Scope, and Origins. New York: Palgrave Macmillan.
Cohn, T. H. (2017), Global Political Economy. Translate by Adel Peyghami, Taraneh Rismanchian & Mohammad Rismanchian. Tehran: Imam Sadegh University. (in Persian).
Davies, M., Edinger, H., Tay, N. & Naidu S. (2008), How China Delivers Development Assistance to Africa. Stellenbosch, South Africa. Center for Chinese Studies: University of Stellenbosch.
Du, H, Mitkova, L. & Wang N. (2020), The Paths of Internationalization of Chinese Innovative Firms. Sustainability, 12(6), 2575. doi:10.3390/su12062575
Donaldson, D. (2018), Railroads of the Raj: Estimating the Impact of Transportation Infrastructure. American Economic Review, 108(4-5), 899-934. American Economic Review 2018, 108(4-5): 899–934.doi: 10.1257/aer.20101199
Gao, H. & Yu, Y. (2011), Internationalization of the Renminbi. Chinese Academy of Social Sciences (CASS), (61):105-124. http://www.bis.org/publ/bppdf/bispap61i.pdf
Guillon, M., & Mathonnat, J. (2020), What Can We learn on Chinese Aid Allocation Motivations from Available Data? A Sectorial Analysis of Chinese Aid to African Countries. China Economic Review, 60, 101265. https://hal.archives-ouvertes.fr/hal-01777484.
Glosny, M. A. (2006), Meeting the Development Challenge in the 21st Century: American and Chinese Perspectives on Foreign Aid. The Committee.
Ghosh, S. (2012), Foreign Banks in India: liabilities or Assets?. Economic Papers: A Journal of Applied Economics and Policy, 31 (2), 225-243. doi: 10.1111/j.1759-3441.2011.00143.x
Hirono, M. (2018), Exploring the links between Chinese Foreign Policy and Humanitarian Action Multiple Interests, Processes and Actors. HPG Working Paper. London: Humanitarian Policy Group.
Kim, S. (2021), Chinas Allocation of Foreign Aid to Southeast Asia an Empirical, Comparative Analysis of Donors. Diss. Johns Hopkins University.
Kilby, P. (2018), China and United State as aid donors. East-West Center, Policy Studies, (77).
Lang, B. (2019), China and Global Integrity-building: Challenges and Prospects for Engagement. U4 Anti-Corruption Resource Centre, (7).‏
Li, H. (2015), The Chinese Model of Development and Its Implications. World Journal of Social Science Research, 2(2), 128-138. doi:10.22158/wjssr.v2n2p128
Lin, J. & Wang, Y. (2014), China–Africa co-operation in structural transformation. WIDER Working Paper. (2014/046)
Lengauer, S. (2011), China’s Foreign Aid Policy: Motive and Method. Culture Mandala: Bulletin of the Centre for East-West Cultural and Economic Studies, 9 (2), 35-81. http://epublications.bond.edu.au/cm/vol9/iss2/3
Lancaster, C. (2007), The Chinese aid system. Washington, DC: Center for Global Development.
Liyun, L. (2005), Guoji Zhengzhixue Lilun shijiao xia de Duiwai Yuanzhu, Foreign Aid from the Perspective of Theories. International Politics, 10(2), 83-88.doi 91500000450418420H
Lee, S-O, Wainwright, J. & Glassman J. (2017), Geopolitical Economy and the Production of Territory: The Case of US–China Geopolitical-economic Competition in Asia. Environment and Planning A: Economy and Space, 50 (2), 416-436. doi: 10.1177/0308518X17701727
Ministry of Commerce of People’s Republic of China. (2015), Statistical Bulletin of China's Outward Foreign Direct Investment.
Mirtorabi, S. & Sari Aslani, M. (2020), China's Political Economy and the Rapid Increase of its Foreign Aid to Africa. Political Strategic Studies, 9(35), 251-281. doi: 10.22054/qpss.2019.41942.2310 (in Persian).
Mirtorabi, S. (2020), China's Challenge to US; Competition over the Status and Pattern of Foreign Aid. Foreign Relations, 12 (2), 187-216.doi: 20.1001.1.20085419.1399.12.2.1.5 (in Persian).
Mulakala, A. & Ji, H. (2021), Insights on China’s 2021 White Paper on International Development Cooperation. https://devpolicy.org/insights-on-chinas-2021-white-paper-on international-development-cooperatio n-20210125-2/.
Nowak, W. (2015), China’s Development Aid Strategies. Chinese Business Review, 14(4), 201-209. doi: 10.17265/1537-1506/2015.04.004.
Niquet, V. (2006), China and Central Asia. China perspectives 2006, 67. doi: 10.4000/chinaperspectives.1045
OECD. (2018), China's Belt and Road Initiative in the Global Trade, Investment and Finance Landscape. OECD BUSINESS AND FINANCE OUTLOOK. https://www.oecd.org
NDRC. (2022), China-Africa Trade Reaches all-Time High in 2021, Showing Resilience Amid Pandemic. https://en.ndrc.gov.cn
OECD-DAC (2022), Distribution of net ODA. https://data.oecd.org/oda/distribution-of-net-oda.htm#indicator-chart.
Öğütçü, M. & Ma, X. (2007), Geopolitics of Energy: China and the Central Asia. Insight Turkey, 9(4), 44-62. https://www.jstor.org/stable/26328517
Pettersson, J. & Johansson, L. (2013), Aid, aid for Trade and Bilateral Trade: An Empirical Study. The Journal of International Trade and Economic Development, 22 (6), 866-894. doi.org/10.1080/09638199.2011.613998
Pankaj, A. K. (2005), Revisiting Foreign Aid Theories. International Studies, 42 (2), 104-121. doi: 10.1177/002088170404200201
Radelet, S. (2005), Think Again: U.S. Foreign Aid. Foreign policy, March 1. https://foreignpolicy.com/2005/03/01/think-again-u-s-foreign-aid/
Shariatinia, M. & Tohidi, Z. (2013), Iran and the Structural Power of the West. Foreign Relations, 5 (3), 125-149.doi.org 20.1001.1.20085419.1392.5.3.7.4 (in Persian).
State Council. (2021), Information Office of the People’s Republic of China. "China’s International Development Cooperation in the New Era. White Paper2021.https://english.www.gov.cn
State Council. (2011), China’s Foreign Aid. White Paper 2011. http://english.www.gov.cn/archive.
Tylec, T. (2019), The Beijing Consensus− Chinese Development Model. Prace Naukowe Uniwersytetu Ekonomicznego we Wrocławiu, 63(8), 154-163.‏ doi:10.15611/pn.2019.8.12
United Nations-ESCAP. (2019), China’s Economic Transformation:Impacts on Asia and the Pacific. https://www.unescap.org
UNDP-China. (2021), China’s Overseas Development Finance Review of Flows and Definitions, and Potential Support for SDG Attainment in Partner Countries. UNDP-China. https://www.undp.org
Vadell, J., Ramos, L. & Neves P. (2014), The international implications of the Chinese model of development in the Global South: Asian Consensus as a network power. Revista Brasileira de Política Internacional. (57), 91-107. doi: 10.1590/0034-7329201400206
World Integrated Trade Solution database. (2016), https://wits.worldbank.org
Yagci, M. (2016), A Beijing Consensus in the Making: The Rise of Chinese Initiatives in the International Political Economy and Implications for Developing countries. Perceptions: Journal of International Affairs, 21 (2), 29-56. https://www.researchgate.net.
International Political Economy Studies
Volume 6, Issue 1
September 2023
Pages 289-319

Files

History

  • Receive Date: 04 February 2023
  • Revise Date: 18 April 2023
  • Accept Date: 19 April 2023

Share

How to cite

Statistics