China’s White Paper on Foreign Aid: How Pacific Island Countries can maximise opportunities
China has become one of the major donors in the Pacific region. Pacific Island Countries (PICs), while grappling with the economic hardships exacerbated by COVID, can make the most of Chinese aid in the fight against the pandemic, the Belt and Road, the UN 2030 Sustainable Development Goals and humanitarian assistance. They can also look for opportunities linked to Chinese aid reforms, including the making of medium- to long-term aid plans and the experimentation of a new aid delivery model that gives recipient countries more discretion.
On January 10, 2021, China released a new white paper on foreign aid titled China’s International Development Cooperation in the New Era. The white paper refers to China’s pledge made at the 73rd World Health Assembly in May 2020. At that assembly, Beijing pledged to provide US$2 billion COVID-related assistance in the next two years to countries hit hard by the pandemic. PICs, especially those most affected by the global pandemic, can apply for this support to bolster their capacity for crisis management and recovery.
China also promised to supply China-made vaccines as “public goods” (details not specified) to other countries. This provides an opportunity for the Pacific. As traditional donors including Australia, the US and New Zealand have pledged similar vaccine support for PICs, coordination between PICs and all these donors is much needed.
China has proactively used aid as a key tool for promoting the Belt and Road Initiative (BRI) in the Pacific region. The white paper highlights that BRI will continue to guide Chinese aid in the future. This has two implications for PICs. First, China will further use its aid to support BRI implementation in the Pacific. Second, China will likely include more of its aid projects as part of BRI. This could secure policy support for these projects from Chinese ministries of foreign affairs, trade, the China International Development Cooperation Agency, embassies, and other related organisations.
The UN 2030 Sustainable Development Goals (SDGs) will be another focus of Chinese aid. The white paper lists the following projects as examples of China-Pacific cooperation on SDGs:
- juncao (mushroom grass) demonstration centres in Fiji and Papua New Guinea which teach local farmers the techniques to plant juncao and grow mushroom on the soil of chopped juncao;
- training center for people with disabilities in Samoa;
- biogas technology and ‘pig-biogas-vegetable’ circular agro-technology projects in Tonga and Samoa;
- construction of the University of South Pacific’s Emalus campus and the vocational training school in Vanuatu;
- construction/upgrade of urban arterial roads and congested sections to ease traffic flow in Fiji, Papua New Guinea and the Federated States of Micronesia;
- small hydropower station [Somosomo] in Fiji;
- support of small island countries on climate change adaptation.
The outcomes of PICs in terms of reaching the UN Millennium Development Goals have been mixed. This suggests these countries face huge challenges in the implementation of SDGs. PICs could seek more aid support from China in this regard.
On humanitarian aid, China established an inter-ministerial response mechanism for international emergency humanitarian relief and aid in the wake of the devastating 2004 Indian Ocean tsunami. The white paper emphasizes that China will pay more attention to humanitarian aid in the future in the context of its foreign aid. As PICs are prone to natural disasters, especially cyclones, earthquakes and climate change related challenges, there are opportunities for PICs and China to deepen cooperation.
In addition to seeking China’s financial support, PICs should also focus on capacity building by participating in training programs. Between 2013 and 2018, China sponsored a total of 7,000 short term training programs for participants from other countries, but only around 2 per cent were held for the Pacific. PICs could propose more programs that are tailored to their needs.
PICs also need to look for opportunities linked to China’s aid reform. For example, making medium- to long-term aid plans will increase the predictability of Chinese aid to the Pacific. Improved post-project evaluation will prompt Chinese contractors in the Pacific to focus more on maintenance, which is necessary since sometimes PICs lack the required skills and resources for this.
To maximise the benefits for PICs, as a first step, Pacific aid officials should approach their Chinese counterparts, especially the Economic and Commercial Offices on the ground, to seek more information. As China is testing a new aid delivery model that leaves project design, construction and management to recipient countries’ discretion, PICs, such as Fiji and Samoa, should approach China for opportunities to get involved in its experimentation. If successful, PICs can include more local cultural elements into project design, have more autonomy over the use of local workers and materials, and gradually build their own capacity in project delivery.
Trilateral aid cooperation is a new aspect of China’s experimentation, which was designed to test whether and how China can deliver aid in partnership with traditional donors and UN organisations for learning and image-building purposes. As China insists that trilateral aid projects ‘should be proposed, agreed and led by the recipient countries’, new projects could contribute to the localisation, ownership and harmonisation of aid projects in the Pacific. PICs have already become a testing place for this new modality. China has piloted trilateral aid cooperation with Australia on malaria control in Papua New Guinea, and with New Zealand on water supply in Cook Islands. The lessons gained in these two projects could shed light on future cooperation in the region.
Last but not the least, the white paper covers the period of 2013-2018, and does not seem to address the heightened geostrategic competition that is unfolding in the Pacific (and elsewhere) between China and traditional donors in recent years. This competition will have a significant impact on PICs as recipients of aid. For example, heightened competition will make it exceedingly difficult for these donors to conduct trilateral aid cooperation in the Pacific, particularly between China and the US.