China in Its Role as a Donor - Essay Example

China in Its Role as a Donor Introduction Developmental governance in the global scenario has been a topic of intense debate because of the widely varied and mufti dimensional attitudes of the different existing and emerging donors in this domain. In a scenario where the Millennium Development Goals (MDG) for 2014 formulated by the United Nations had remained unachieved in the third world countries of the world, several questions have been raised on the effectiveness of the traditional ways of providing international development aids by different DAC countries. The traditional donors in the foray of international and global governance aid have always been the member countries of the OECD Development Assistance Committee (DAC). However, in the recent two-three years, emerging economies like China, India, Brazil, Kuwait, Venezuela, Saudi Arabia and Korea have started paying significant roles as international donors. These emerging countries have started changing the scenario of world development assistance by encouraging a shift in the sources of global aid and donations from the DAC countries to the non DAC countries. In the last decade, the roe of China as a global donor has been highly visible, especially because of the increasing magnitude of its contributions and the differentiated manner in which the country donates for the foreign aid purposes. This report is prepared with the aim of discussing the role of China as a donor in the global development assistance domain and also to appraise the ways in which China has brought in new dimensions in the global aid and development programs in this century. Discussion In the present era, the donations for global development governance are characterized by equal impacts and contributions from both the DAC and non DAC donors (Zimmermann and Smith, 2011). The new geographical areas like Middle East and Asia pacific have started developing as significant donors in this domain. The donors operating for the development of the global governance can be categorized in two main sections. The first section is the traditional section of donors which include the members of the OECD countries which are commonly called the DAC countries and operate under the Development Assistance Committee (DAC) which has been established within the OEC exclusively for the purpose of assistance. The other section of donors encompasses the emerging donor economies in the Asia Pacific and Middle Eastern regions of the world (Woods, 2008). Among these countries, the role of China as a donor has been exceptionally unique and highly profound in the last two years of its foreign assistance. China along with some other non-DAC donors have been providing aids on its own terms and according to their own choices without being stringently guided and controlled by the existing trends and policies of the global governance aids and development. It is estimated that by the end of 2013, the value of the official development assistance provided by the emerging countries will become more than USD 25 million. Also, it has been estimated that the disbursements of foreign aid made by the non DAC countries was over USD 8.5 million in the year 2006 (OECD, 2014b). With China emerging as a super power and also as a prominent donor, it is likely that the contribution of the emerging economies in this foray would be heightened to reach new magnitudes. The lines between the traditional DAC countries and the conventional non DAC countries as donors are continuously becoming blurred. Earlier it was noted that the DAC countries were the only donors in the global development domain. However, in the recent years, the role of the non-DAC countries is becoming stronger with the new ways of assistance being taken up by China and the high level of contributions made by all the non DAC countries (OECD, 2014a). This has changed the overall pattern of the global foreign aid and development because the entry of the new donors have started to question the existing traditional ways of foreign aid donation and subsequently influenced changes in the prevailing rules and policies by introducing new approaches and systems of donation. Whereas some consider this as a positive factor in the arena of global development aid, others have argued that this may lead to the concentration of power in one part of the global economy and thus lead to misbalances in the global economy. The international aids community focuses intricately on the way China provides aid to other countries because this way of conducting aid is significantly different from the traditional ways of donation, especially that of the members of the OECD Development Assistance Committee (DAC). Many economists are of the view that the ways of providing aid that are followed by China may lead to support for bad governance, re-indebt the poor economies with increased volumes of loans and undermine the existing standards and consensus of global development (Scott, VomHau and Hulme, 2010). China has been learning about the need and ways of development aid in its developmental experiences. The country had got more than USD 500 billion as foreign development assistance by other countries in the course of its development. Today, the country has emerged as a significant donor with the foreign aid expenditure of the country being estimated to be USD 39.45 billion between 1960 and 2009 (Stähle, 2012). Whereas many countries and institutions support the unique way of donations taken up by the country, many other are of the view that the foreign aid assistance provided by China is a way of exploiting the natural resources in another country. This view is especially fuelled by the extensive and fast expansion of a number of natural resources mining ventures by China in the foreign backward countries, especially in the African nations (Tan-Mullins, Mohan and Power, 2010). However, in recent years, China has started working towards overcoming this stereotype of China as a donor by provide aid and assistance to countries where it does not have much resource collecting and mining interests. It has also started concentrating on the improvement of the living standards and economic standards of its own people while developing economic relations with other countries of the world. Since, China has been accused of trying to extract the natural resources of the country to which it is has been providing foreign aids and assistance, China has focused on developing horizontal relationships within the donor-recipient connections. This has been applauded by the international aid authorities and has introduced a new concept of horizontal partnership within the donor country and the recipient country, thereby creating a win-win situation for the both the parties. China has always won applause due to its divergence of the donor-recipient relation into a mutually cooperative partnership which aims at providing assistance to the parties at the same level (Mawdsley, 2012). The main focus of Chinas foreign aid and assistance is on the productive sectors of the poor countries rather that the social sectors which are focused on by the traditional donors. China aims to develop the recipient countries through the use of the foreign aids on the productive segments which creates prospects or the proper countries to aim for development in the way China has developed itself from being a third world country to a super power. China also practices foreign aid assistance through official aids, developmental financing, referential credits and loans as types of aid assistance provided by the countries. The ways of aids and the purpose of assistance have made China a completely non-traditional donor which has influenced the global development assistance practices to a high extent. The non-conditionality based assistance provided by China has made many recipient countries to turn towards China for its assistance rather than opting for the aids and assistance by the western countries or the DAC countries (The Guardian, 2011). Figure 1: China’s foreign aid in 2009 (Source: OECD, 2014a) The main difference between the donations by the DAC countries and China lies in the fact that China provides financial and other assistance to the recipient countries without any political conditions or rules of interference in the recipient country. China as a donor has never required conditionality (Sato, 2011). Therefore, the dollars from the country may flow to the corrupt organizations and governments in other recipient countries. Foreign aid and assistance are not dependent on the stance of the recipient countries government in good governance or human rights. As such, the aids provided by China being free from policy conditionality often flow unchecked into some controversial governments in the African countries. The lack of policy conditionality often leads to the uninterrupted and quick flow of aids to improper recipients. This flow of foreign funds is completely opposite from the bilateral aid flows followed by most of the DAC countries and the western governments. China also does not document the amount of funding that goes to particular recipients and also does not maintain an official list of its foreign aid recipients. This is significantly different from the approach of the DAC countries towards foreign aid and expenditure management. The new policies taken up by China are seen by some as a way of creating non transparent flow of funds which may be politically and economically disturbing in the long term (Brant, 2011). Conclusion The foreign aid and assistance provided by China is rooted to the domestic political norms of China. The main aim of China in its differentiated donating and assistance activities it to foster the developmental and productive aspects of the recipient country through focusing on the productive sectors of the country. On the other hand, traditional donors are known to focus more on the social and political aspects of the recipient country for ultimate development. Though the paradigms of the two types of donors are different yet they are associated to deliver same results. As such, if a suitable cooperation level is established between China and the western traditional donors then it can lead to more effective and conductive global governance in the foray of international aid and assistance. An integrated approach of assistance which will combine the traditional ways of aid with the new found ways of assistance by countries like China would ultimately foster the development of better foreign aid and assistance and deliver more profound results for the recipient countries. References Brant, P. 2011. Foreign aid with Chinese characteristics: China releases first White Paper on aid. [Online]. 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