Friday, 30 March 2018

Chinese aid: not a bad thing

There's a lot to criticise about the One Belt One Road (AKA BRI) initiative. Particularly concerning is the way in which countries like Laos are apparently being saddled with large sums of debt for the construction of projects, largely by Chinese companies using Chinese resources, which will not benefit the country in a way proportionate to the cost of them.

It is however worth emphasising that Chinese aid is generally a good thing, that it has aided countries in need and helped boost growth. Here's a recent Washington Post piece pointing out the benefits that Chinese official aid (ODA, as opposed to more commerically motivated aid) has brought:

AidData's research has shown when Chinese funding is similar to ODA, it boosts economic growth in recipient countries just like Western aid. If a country is on the receiving end of such a Chinese aid project, it will see 0.4 percent average growth two years after the project is committed — a similar rate of growth to aid from the United States and the Organization for Economic Cooperation and Development's (OECD) Development Assistance Committee (and notably higher than aid from the World Bank).
Indeed, as the WaPo story points out, if anything the PRC government is guilty of hindering the spread of the good news about this by surrounding aid in secrecy.


justrecently said...

Sounds good, but it seems to me that the charts that really count appear to be the second: China dishes out lots of money, but only some "aid".

Every industry in China seems to have its fiefdoms, competing with other fiefdoms - that might explain why some [officials] have professed an interest in getting better “fine-grained data” to inform their own work.

I doubt that to distinguish between "ODA" and "OOF" makes much sense when the latter is many times higher than the former.

To the recipient countries however, competing investors can make a lot of sense, and expand their opportunities to advance their interests.

Gilman Grundy said...

Agree that the data is not entirely transparent (well, they are having to get around the whole "state secret" thing).

justrecently said...

It is irrelevant.

That's why you keep commenting here, right?

Gilman Grundy said...

Minor failure in the spam blocker, sorry JR.

justrecently said...

No problem. Feel free to delete my reactions to him (and this comment), too. I'm thinking of them as chatter, not as comments.