Chinese Foreign Aid and Financing: An Example of New Development Assistance?

Abstract

China’s rise has been prominent in contemporary history. It overtook Japan as the world’s second largest economy in 2010, and its growth has continued though at a slower pace. China’s impact is increasingly felt by the international community in sectors including development assistance. As a recent example, during the inaugural Belt and Road Forum for International Cooperation in Beijing in May 2017, the Chinese government pledged substantial financing to the developing world. Some of the measures include: China will provide US$8.81 billion (RMB 60 billion) of aid over the next three years to developing countries (and international organizations) participating in the Belt and Road; The China Development Bank will set up a special lending scheme of US$36.7 billion (RMB 250 billion) to support the Belt and Road; The China Export-Import Bank (China Exim Bank) will set up a similar scheme of US$14.6 billion (RMB 100 billion) and an additional US$4.4 billion (RMB 30 billion) Infrastructure Development Fund (Xinhua, 2017). By 2016, Chinese enterprises had invested US$18.55 billion in countries along the Belt and Road and created 177,000 employments for them (MOFCOM, 2017).