China’s ‘Innovative and Pragmatic’ Foreign Aid: Shaped by and now Shaping Globalisation

Abstract

In his address to the 2017 annual meeting of the World Economic Forum in Davos, Switzerland, Chinese President Xi Jinping said: [W]hen the global economy is under downward pressure, it is hard to make the cake of the global economy bigger. It may even shrink, which will strain the relations between growth and distribution, between capital and labour, and between efficiency and equity. Both developed and developing countries have felt the punch. (Xi 2017) But this, he added, does not mean the world should write off economic globalisation completely. He said it was a natural outcome of human progress and therefore ‘we should adapt to and guide economic globalization, cushion its negative impact, and deliver its benefits to all countries and all nations’ (Xi 2017). As the plenary speech on the first visit to Davos by a Chinese president, the speech itself is significant, but it offers little in the way of predictions of any material results on economic policy—a result both of the dynamic complexities of globalisation and of policymaking in China. Nonetheless, Xi’s call for greater adaptation to and better guidance of globalisation implies that any change will itself be dynamic. A stated goal of China’s increasing leadership in globalisation is delivery of mutually positive benefits to developing countries. In his Davos address, Xi therefore drew particular attention to China’s foreign aid and its contribution to global growth.