As China’s economy has expanded in recent years, so, too, has its capacity to engage in substantial programs of development assistance. Its foreign aid and government-initiated investment activities have burgeoned in recent years. Yet little has been known about the extent of China’s aid activities. Thomas Lum of the Congressional Research Service (CRS) offered an initial estimate of China’s aid and government-sponsored investment activities in Africa, Latin America, and Southeast Asia.¹ We seek to build on Lum’s work by providing a more complete description of China’s foreign aid and government-sponsored investment activities in the first decade of the 21st century,...

The literature on foreign aid is extensive; as a result, any brief review of it will cover only some of the highlights. In this chapter, we focus on concepts and definitions of foreign aid as presented by international organizations and by China, as well as other research on the linkage between foreign aid and economic growth, and previous literature on the scope and scale of China’s aid.

The OECD defines two forms of development aid programs:

1. Official development assistance (ODA) consists of technical aid, official grants, or loans promoting economic development and welfare, and having concessional terms, with a grant...

Prior to 2000, China’s FAGIA was distinctly limited in scale and content, as indeed was China’s role in the global economy. Thereafter, several factors contributed to the major changes that ensued in the scale, content, and destinations of China’s programs. As a result of its remarkably high and sustained rate of GDP growth (9–10 percent annual real rate of growth in the two preceding decades), China’s shares of global trade and of global product waxed, as did its available financial resources for aid expansion. China’s policymakers, and the successive leadership of Jiang Zemin and Zhu Rongji, and of Hu...

Although MOFCOM publishes considerable information about some of the operational details of individual assistance projects, none of this information covers their costs. Published information describes micro-details about projects relating, for example, to numbers of earth-moving equipment, forklifts, electric generators, computers, technicians, and other project personnel. But this information does not provide the market value of these project inputs—whether expressed in renminbi, dollars, or in the recipients’ own currencies.

Part of the explanation for these anomalies may lie in an historical legacy. China’s earliest ventures in foreign development assistance occurred in the 1970s and 1980s when these programs were used...

Indicative of the differing purposes and priorities that underlie China’s FAGIA programs is their respective size and project composition in six regions and the countries within them. In this chapter, we disaggregate the worldwide data among six regions: Latin America, Africa, Middle East, South Asia, Central Asia, and East Asia. For each region, we first assess the scale and trends of pledged and delivered assistance, then discuss the categories and purposes of China’s programs.

The 14 countries in Latin America received the largest amount of aid of any region covered in this study. Latin America also received the largest share...

China’s FAGIA grew rapidly during the first decade of the 21st century, reaching a substantial level by 2011. In 2001, the pledges were slightly below $2 billion, thereafter increasing by an average amount of about $20 billion annually, and reaching a level of $189 billion in 2011. While the scale of aid deliveries also has been rising (albeit not as substantially), financial resources available to and used by China to meet these obligations have been ample. According to IMF data covering China’s capital accounts, current official transfers (including credits but excluding “exceptional financing”) have remained well above deliveries throughout the...