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	<title>The China StoryDenghua Zhang, Author at The China Story</title>
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		<title>China Recalibrates Its Strategy in the Pacific Region</title>
		<link>https://www.thechinastory.org/china-recalibrates-its-strategy-in-the-pacific-region/</link>
		<comments>https://www.thechinastory.org/china-recalibrates-its-strategy-in-the-pacific-region/#respond</comments>
		<pubDate>Thu, 03 Nov 2022 02:59:33 +0000</pubDate>
		<dc:creator>Denghua Zhang</dc:creator>
				<category><![CDATA[The View]]></category>

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		<description><![CDATA[<p>China and traditional regional powers, such as the United States, Australia, New Zealand and Japan, are jockeying for influence in the Pacific. There are signs that China is now recalibrating its strategy in response to the newly energised competition, which itself was largely triggered by China’s growing activities in the region. In the past, China’s &#8230; <a href="https://www.thechinastory.org/china-recalibrates-its-strategy-in-the-pacific-region/">more</a></p>
<p>The post <a rel="nofollow" href="https://www.thechinastory.org/china-recalibrates-its-strategy-in-the-pacific-region/">China Recalibrates Its Strategy in the Pacific Region</a> appeared first on <a rel="nofollow" href="https://www.thechinastory.org">The China Story</a>.</p>
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				<content:encoded><![CDATA[<p>China and traditional regional powers, such as the United States, Australia, New Zealand and Japan, are jockeying for influence in the Pacific. There are signs that China is now recalibrating its strategy in response to the newly energised competition, which itself was largely triggered by China’s growing activities in the region. In the past, China’s regional approach was largely limited to the attendance of annual Pacific Islands Forum (PIF) dialogue, small donations to the PIF and the Pacific Tourism Organisation as well as Chinese government scholarships (twenty per year) delivered through the PIF. Although China established the high-level China-Pacific Islands Economic Development and Cooperation Forum in 2006, it is not an annual event. So far, only three summits have been held, in 2006, 2013 and 2019.</p>
<p>The recent recalibration presents itself in three main aspects. The first aspect involves adopting a dual strategy of competition and engagement, with a focus on competition. In a rare move, Chinese foreign minister Wang Yi <a href="http://en.people.cn/n3/2022/0715/c90000-10123413.html">convened</a> two China-Pacific Foreign Ministers’ meetings (in October 2021 and May 2022) in less than eight months. The International Department of the Communist Party of China (CPC) has also been busy establishing ties with major political parties in the Pacific. These activities send a clear message that China is ramping up its competition with traditional powers.</p>
<p>Interestingly, during his trip, Wang Yi also <a href="https://www.fmprc.gov.cn/eng/zxxx_662805/202205/t20220527_10693486.html%20(">said</a> China is ‘open-minded about carrying out more tripartite cooperation with other countries inside and outside the region’. This is best interpreted as a temporary tactic for reducing traditional powers’ concerns about China’s activities in the region rather than as a long-term policy change. Gone is the golden age about a decade ago when China and traditional donor countries had a genuine interest in piloting such trilateral cooperation in third countries, as typified by the Australia-China-Papua New Guinea malaria project and the New Zealand-China-Cook Islands water project. These experiments reveal that high-level political trust between China and traditional donors is a crucial element in China’s trilateral cooperation, which is clearly lacking at the moment.<a href="#_ftn1" name="_ftnref1"><sup>[1]</sup></a> Affected by the growing tensions in its bilateral relations with China, it has also become increasingly difficult for Australia to hold regular diplomatic consultations with China on Pacific affairs. Even when they do, such as the recent video conference on Pacific affairs in May 2022, it was more like a formality than an opportunity to have fruitful discussions.</p>
<p>Second, China is piloting an approach of driving with <a href="https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/202206/t20220603_10698495.html">two steering wheels</a> 双轮驱动 which includes both bilateral and regional engagement with Pacific islands, although bilateral engagement will remain the focus.</p>
<p>During Wang Yi’s visit, he proposed two broad agreements to leaders from the region: the <em>China-Pacific Island Countries Common Development Vision</em> and the <em>China-Pacific Island Countries Five-Year Action Plan on Common Development (2022-2026)</em>. The agreements were intended to serve as the main achievement of the second Foreign Ministers’ meeting, and represent China’s new effort to boost its engagement with the region. But in the end, neither of the two agreements was <a href="https://www.abc.net.au/news/2022-05-25/china-seeks-pacific-islands-policing-security-cooperation/101099978">adopted</a>. A possible reason is that Pacific island states are becoming increasingly sensitive to <a href="https://www.thechinastory.org/the-china-solomon-islands-security-agreement-clear-and-present-danger/">policing and security cooperation</a> with China in the context of heightened geostrategic rivalry in the region. Such concerns are exacerbated by the China-Solomon Islands security pact signed in March 2022 which has caused concerns in the region about its <a href="https://www.thechinastory.org/the-china-solomon-islands-security-agreement-clear-and-present-danger/">implications for regional security</a>. According to some reports, there was also <a href="https://www.bloomberg.com/news/articles/2022-07-15/pacific-leader-blasts-china-s-botched-attempt-to-strike-pact">inadequate consultation</a> between China and the region on the two agreements.</p>
<p>The third aspect of China’s recalibration of its approach in the Pacific is the creation of institutional structures for systematic engagement. In particular, Beijing will rely heavily on <a href="https://www.fmprc.gov.cn/mfa_eng/topics_665678/kjgzbdfyyq/202206/t20220603_10698495.html#:~:text=Fighting%20COVID%2D19-,Wang%20Yi%3A%20China's%20Cooperation%20with%20South%20Pacific%20Island%20Countries%20Having,of%20%22Two%2DWheel%20Driving%22&amp;text=On%20June%203%2C%202022%20local,the%20press%20in%20Port%20Moresby.">six new China-Pacific cooperation centers</a>, as well as tasking three provinces with promoting its Pacific diplomacy. The six centers focus respectively on climate change, poverty alleviation, disaster prevention and mitigation, agriculture, <em>juncao</em> (fungus grass, 菌草) technology, and reserve of emergency supplies. Although China had previously cooperated with the Pacific islands in these areas, the establishment of the cooperation centers highlights China’s desire to deepen engagement with Pacific countries in a more systematic way. For example, the Pacific research centre at Liaocheng University will manage the China-Pacific climate change center, conduct related research, and promote exchanges and cooperation.</p>
<p>The Chinese government has also tasked coastal provinces Guangdong, Fujian and Shandong with leading China’s provincial diplomacy in the Pacific. Compared with other provinces, these three have rich experience, resources and expertise in cooperating with the Pacific. All of them have established Pacific research centers within their universities including the Sun Yat-sen University and Guangdong Foreign Studies University in Guangdong, the Fujian Agriculture and Forestry University and Shandong’s Liaocheng University (mentioned above). These centers have established close relations with Pacific islands in the areas of scholarships, volunteer teachers, and agriculture.</p>
<p>China has been adjusting its Pacific strategy in response to the growing determination of other powers—including the US, Australia, New Zealand and some Pacific countries as well—to counterbalance its influence in the region. The US has responded to the China ‘challenge’ in a systematic way, including releasing the <em><a href="https://www.whitehouse.gov/wp-content/uploads/2022/02/U.S.-Indo-Pacific-Strategy.pdf">Indo-Pacific Strategy</a></em>, conducting diplomatic visits (Secretary of State Antony Blinken to Fiji in February 2022, White House Coordinator for the Indo-Pacific Kurt Campbell to Solomon Islands in April 2022, and Vice President Kamala Harris’s virtual address to the 2022 PIF in July, and the hosting of the first US-Pacific Islands Countries Summit in Washington DC in September), providing economic, finance and technical assistance, and bolstering people-to-people links. To Beijing, these actions aim to contain China’s rise, a challenge that must be met head on. Xie Feng 谢锋, the Chinese vice foreign minister in charge of China-Oceania relations, <a href="https://www.fmprc.gov.cn/mfa_eng/wjbxw/202204/t20220429_10675430.html">slammed</a> traditional powers’ opposition to the China-Solomon Islands security pact: ‘what rights do these countries have to make unwarranted comments on China and Solomon Islands? How is Australia in any position to draw a “red line” between Solomon Islands 2,000 kilometres away and China ten thousand miles away?’ There is alarm from some traditional powers and the opposition party in Solomon Islands that the China-Solomon Islands security pact could pave the way for China to establish a military base in Solomon Islands. Despite this alarm, China is <a href="https://www.abc.net.au/news/2022-07-06/huge-new-donation-from-ccp-police-equipment-for-solomon-islands/101213248">deepening policing cooperation</a> with the country, including donating twenty-two police vehicles, thirty motorcycles, two police water cannons, eight police drones and advanced close personal protection equipment to the latter. In August, the Solomon Islands government took out a $96 million dollar concessional loan from the Exim Bank of China to contract Huawei to build 161 telecom towers, sparking further <a href="https://www.crikey.com.au/2022/08/19/solomon-islands-signs-china-telecom-deal/">controversy</a>. Some Chinese scholars suggest that in reacting to Australia’s Pacific Step-up and reducing its pressure on China’s Pacific diplomacy, China should ‘take advantage of the fundamental contradiction between Australia’s Monroe Doctrine and Pacific islands’ independent foreign policies’.<a href="#_ftn2" name="_ftnref2"><sup>[2]</sup></a></p>
<p>Pushback from Pacific nations themselves to China’s growing activities poses a further challenge to China’s Pacific policies. Pacific island nations are not the pawns in a geostrategic power struggle, but have their own agendas on climate change, marine conservation and development. The growing tensions between China and traditional powers have made it imperative for Pacific islands to manage their relations with China in a more cautious manner. Many Pacific islands are seemingly comfortable with existing security arrangements, including partnerships with powers such as the US and Australia that date back to the Second World War. They want, in the words of the Pacific Islands Forum Secretariat’s <em>2<a href="https://www.forumsec.org/2050strategy/">050 Strategy for the Blue Pacific Continent</a> </em>(2020), ‘inclusive and enduring partnerships based on mutual accountability and respect’. Perceptions of civil society stakeholders in the Pacific about China are <a href="https://www.tandfonline.com/doi/abs/10.1080/10357718.2022.2112145">complex and often divided</a>.</p>
<p>To sum up, China is recalibrating its Pacific strategy to keep Pacific island nations from forging closer links with its strategic competitors. But Beijing is also aware of its limits. As China’s economic growth slows and foreign reserves shrink, it stresses ‘<a href="http://www.cidca.gov.cn/2022-01/20/c_1211537297.htm">small but beautiful</a>’ 小而美 aid projects. What remains unchanged in China’s Pacific strategy is that Beijing sees Pacific islands in strategic terms, more than just as partners in areas like climate change or trade: for China, Pacific island nations play an integral role in its South-South cooperation which represents China’s attempt to strengthen relations with other developing countries to resist American and other countries’ strategic pressure on China.</p>
<p><strong>References</strong></p>
<p><a href="#_ftnref1" name="_ftn1">[1]</a> Zhang Denghua, <em>A Cautious New Approach: China’s Growing Trilateral Aid Cooperation, </em>Canberra: Australian National University Press, 2020.</p>
<p><a href="#_ftnref2" name="_ftn2">[2]</a> Chen Xiaochen, ‘Ao da li ya de “taipingyang shengji” zhanlue: zhongdian jucuo, dongyin yu yingxiang’ 澳大利亚的“太平洋升级”战略:重点举措动因与影响 [Australia’s “Pacific Step-up” strategy: priority measures, motivations and impact]’, <em>Dangdai shijie yu shehui zhuyi (Contemporary World and Socialism), </em>no. 3 (2022): 167.<a href="#_ftnref3" name="_ftn3"></a></p>
<p>The post <a rel="nofollow" href="https://www.thechinastory.org/china-recalibrates-its-strategy-in-the-pacific-region/">China Recalibrates Its Strategy in the Pacific Region</a> appeared first on <a rel="nofollow" href="https://www.thechinastory.org">The China Story</a>.</p>
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	<post-id xmlns="com-wordpress:feed-additions:1">23337</post-id>	</item>
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		<title>Perceptions and Frustrations: Chinese Companies in the Global South</title>
		<link>https://www.thechinastory.org/perceptions-and-frustrations-chinese-companies-in-the-global-south/</link>
		<comments>https://www.thechinastory.org/perceptions-and-frustrations-chinese-companies-in-the-global-south/#respond</comments>
		<pubDate>Mon, 10 May 2021 00:15:28 +0000</pubDate>
		<dc:creator>Denghua Zhang</dc:creator>
				<category><![CDATA[General]]></category>
		<category><![CDATA[Diaspora]]></category>
		<category><![CDATA[Trade & Investment]]></category>

		<guid isPermaLink="false">https://www.thechinastory.org/?p=20578</guid>
		<description><![CDATA[<p>Chinese companies have been at the forefront of China’s rapidly expanding footprint in the Global South in the past two decades. In their engagement with Chinese companies, some local officials and communities in Asia, Africa and the Pacific marvel at the speed of construction by Chinese companies. This so-called“China speed”, largely achieved through efficient management &#8230; <a href="https://www.thechinastory.org/perceptions-and-frustrations-chinese-companies-in-the-global-south/">more</a></p>
<p>The post <a rel="nofollow" href="https://www.thechinastory.org/perceptions-and-frustrations-chinese-companies-in-the-global-south/">Perceptions and Frustrations: Chinese Companies in the Global South</a> appeared first on <a rel="nofollow" href="https://www.thechinastory.org">The China Story</a>.</p>
]]></description>
				<content:encoded><![CDATA[<p><i>Chinese companies have been at the forefront of China’s rapidly expanding footprint in the Global South in the past two decades. In their engagement with Chinese companies, some local officials and communities in Asia, Africa and the Pacific marvel at the speed of construction by Chinese companies. This so-called“China speed”, largely achieved through efficient management and hardwork of Chinese labour, often faces local challenges. In Ethiopia, for instance, some Chinese engineers think local Ethiopian supervisors are unnecessarily strict with their oversight duties, which suggests the agency of local societies in their interaction with Chinese companies.</i></p>
<p>A large number of Chinese companies have conducted business overseas since the Chinese Communist Party adopted the ‘Going Global’ strategy (from 2000) and the Belt and Road Initiative (BRI) (from 2013). By 2019, 27,500 Chinese companies had<a href="http://images.mofcom.gov.cn/fec/202102/20210202162924888.pdf"> established</a> branches in 188 countries. Most of them are in the Global South to construct roads, railways, airports, bridges, and buildings.</p>
<p>In many countries, Chinese construction giants such as China Communications Construction Company (CCCC), China Civil Engineering Construction Corporation (CCECC) and China Railway Engineering Corporation, are more visible representatives of China’s image than the Chinese Party-State. These and other state-owned enterprises (SOEs) are a crucial part of China’s global outreach.</p>
<p>Privately-owned small and medium-sized enterprises (SME) have followed the steps of SOEs, expanding their markets and networks across the Global South in pursuit of export and investment opportunities. One example of such an expanding ground for SME is Ethiopia, which is one of China’s key strategic partners in Africa. In the early 2000s, Chinese expatriates in Ethiopia were mainly medical volunteers and agriculturalists working on aid programs. By 2016,<a href="https://www.sciencedirect.com/science/article/pii/S0305750X15301571"> the number of Chinese expats in Ethiopia</a> had sky-rocketed to some 60,000, working mainly in construction and infrastructure projects as well as in the manufacturing sector (especially leather and plastics).</p>
<h3><b>China Speed</b></h3>
<p>In Chinese projects overseas, distinctive business practices with ‘Chinese characteristics’ shape local perceptions of China.</p>
<p>One example relates to local officials and the public’s perceptions of  China’s speed of construction. In 2015, a former government minister in Timor-Leste told the first author, ‘Chinese work 24 hours a day (by working in shifts) … I am sure if you ask Chinese to develop this part of the city, in one year you will get it. These Chinese people are hardworking people. If they have the deadline, they will finish before that.’</p>
<p>In 2019, a high-level official from the Federal Attorney General’s Office of Ethiopia told the second author that the construction of a road contracted by the Ethiopian Government to a local Ethiopian company had started earlier, but lagged far behind a different road project — one that was contracted by Addis Ababa City Road Authority to China Road and Bridge Corporation. When the latter project was completed first, Ethiopians joked self-deprecatingly that it was a ‘Chinese surprise!’ The joke became a meme, and soon spread over social media, used by Ethiopian netizens to criticise local officials for failing to adequately oversee the construction of municipal facilities.</p>
<p>Some locals regard Chinese workers on the construction site as so hard on themselves that they seldom take leave from work. During fieldwork in Port Moresby in 2014, the first author encountered ninety workers from China Harbour Engineering Company, CCCC Third Highway Engineering Corporation and Hubei Xingda Road &amp; Bridges Corporation. These workers lived in dormitories inside a compound that was guarded by armed local security personnel. They worked from 7am to 6pm on workdays and had little entertainment in their spare time. The Chinese companies confined them to the worksite and dormitory, thus their engagement with local communities was limited.</p>
<p>The efficiency of Chinese workers, as<a href="https://hkupress.hku.hk/pro/1715.php"> Miriam Derissen</a> argues, is often due to the puritan work ethics they inherit from their migrant worker parents in China. Young men, in particular, hope they can climb up the Chinese social ladder through hard work and the doubled salaries they can earn overseas. They tend to see engagement with local society as being neither necessary, nor instrumental, for their dreams.</p>
<h3><b>Frustrations</b></h3>
<p>Frustrations can arise between Chinese companies and local stakeholders, however. The pride Chinese earned from speedy implementation does not guarantee them an advantageous position vis-à-vis their Ethiopian partners. Instead, the power-dynamic is never clear-cut but resembles a tug of war. In the construction project of an Ethiopian bank headquarters starting from 2015, for example, the bank appointed an architect institute that was affiliated with Addis Ababa University as the supervisor. Chinese engineers and managers often complained that the Ethiopian supervisors were unnecessarily strict in their oversight. These supervisors, they complained, would meticulously check everything on the site construction drawings and demand the project halt completely if the Chinese did not explain the operations clearly enough. But the Chinese find such explanations demanding in the realm of technology and in a foreign setting.</p>
<p>This kind of situation stems at least partly from the fact that Chinese engineers follow  the Chinese construction code, while Ethiopian supervisors follow ESEN, a combination of Ethiopian standards developed during Haile Sellassie’s modernisation programs and an adapted version of contemporary European standards. Chinese contractors can apply Chinese standards in design, but the delivery of the project must be checked against ESEN or European standards. Although the process of demanding that work halt and seeking explanations of Chinese ways of operation allowed Ethiopian engineers to absorb Chinese techniques and adapt them for domestic development, the resultant slowing down of the projects antagonised Chinese engineers.</p>
<p>As the Chinese government is actively promoting the BRI, Chinese companies’ engagement with local stakeholders in the Global South is set to grow. Some of the misperceptions the Chinese companies and the local stakeholders have about each other will likely persist. Mutual learning from each other may reduce misperceptions as well as tune in expectations. For example, an obsession with speed may hamper organic, collaborative growth, if one recalls a Chinese proverb “more haste, less speed” (欲速则不达) and another one from Ethiopia ‘slowly an egg will walk with its two legs (ቀስ በቀስ እንቁላል በእግሩ ይሄዳል)’.</p>
<p>&nbsp;</p>
<p><em>The authors acknowledge Bingkun Liang for his fieldwork in Ethiopia.</em></p>
<p>The post <a rel="nofollow" href="https://www.thechinastory.org/perceptions-and-frustrations-chinese-companies-in-the-global-south/">Perceptions and Frustrations: Chinese Companies in the Global South</a> appeared first on <a rel="nofollow" href="https://www.thechinastory.org">The China Story</a>.</p>
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		<title>China’s White Paper on Foreign Aid: How Pacific Island Countries can maximise opportunities</title>
		<link>https://www.thechinastory.org/chinese-foreign-aid-pacific/</link>
		<comments>https://www.thechinastory.org/chinese-foreign-aid-pacific/#respond</comments>
		<pubDate>Tue, 02 Mar 2021 21:34:30 +0000</pubDate>
		<dc:creator>Denghua Zhang</dc:creator>
				<category><![CDATA[General]]></category>
		<category><![CDATA[Influence]]></category>

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		<description><![CDATA[<p>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 &#8230; <a href="https://www.thechinastory.org/chinese-foreign-aid-pacific/">more</a></p>
<p>The post <a rel="nofollow" href="https://www.thechinastory.org/chinese-foreign-aid-pacific/">China’s White Paper on Foreign Aid: How Pacific Island Countries can maximise opportunities</a> appeared first on <a rel="nofollow" href="https://www.thechinastory.org">The China Story</a>.</p>
]]></description>
				<content:encoded><![CDATA[<p><em>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.</em></p>
<p>On January 10, 2021, China released a <a href="http://english.scio.gov.cn/whitepapers/2021-01/10/content_77099782.htm">new white paper</a> on foreign aid titled <em>China&#8217;s International Development Cooperation in the New Era</em>. 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.</p>
<p>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.</p>
<p>China has proactively used aid as a key tool for promoting the Belt and Road Initiative (BRI) in the Pacific region. The white paper <a href="http://english.www.gov.cn/archive/whitepaper/202101/10/content_WS5ffa6bbbc6d0f72576943922.html">highlights</a> 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.</p>
<p>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:</p>
<ul>
<li><em>juncao</em> (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 <em>juncao</em>;</li>
<li>training center for people with disabilities in Samoa;</li>
<li>biogas technology and ‘pig-biogas-vegetable’ circular agro-technology projects in Tonga and Samoa;</li>
<li>construction of the University of South Pacific’s Emalus campus and the vocational training school in Vanuatu;</li>
<li>construction/upgrade of urban arterial roads and congested sections to ease traffic flow in Fiji, Papua New Guinea and the Federated States of Micronesia;</li>
<li>small hydropower station [Somosomo] in Fiji;</li>
<li>support of small island countries on climate change adaptation.</li>
</ul>
<p>The <a href="https://www.cn.undp.org/content/china/en/home/library/south-south-cooperation/1--china_s-south-south-cooperation-with-pacific-island-countries.html">outcomes</a> 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.</p>
<p>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 <a href="https://humanitarianadvisorygroup.org/wp-content/uploads/2019/12/HH_China-Practice-Paper_Final-December-2019.pdf">humanitarian aid</a> 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.</p>
<p>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 <a href="http://english.www.gov.cn/archive/whitepaper/202101/10/content_WS5ffa6bbbc6d0f72576943922.html">held for the Pacific</a>. PICs could propose more programs that are tailored to their needs.</p>
<p>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 <a href="https://www.rnz.co.nz/international/pacific-news/382250/maintenance-an-issue-for-huge-convention-centre-in-vanuatu">lack</a> the required skills and resources for this.</p>
<p>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.</p>
<p>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 <a href="https://press.anu.edu.au/publications/series/pacific-affairs/cautious-new-approach">learning and image-building purposes</a>. As China <a href="http://english.www.gov.cn/archive/whitepaper/202101/10/content_WS5ffa6bbbc6d0f72576943922.html">insists</a> 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.</p>
<p>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.</p>
<p>The post <a rel="nofollow" href="https://www.thechinastory.org/chinese-foreign-aid-pacific/">China’s White Paper on Foreign Aid: How Pacific Island Countries can maximise opportunities</a> appeared first on <a rel="nofollow" href="https://www.thechinastory.org">The China Story</a>.</p>
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		<title>Messages from China’s third white paper on foreign aid</title>
		<link>https://www.thechinastory.org/messages-from-chinas-third-white-paper-on-foreign-aid/</link>
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		<pubDate>Tue, 16 Feb 2021 10:58:27 +0000</pubDate>
		<dc:creator>Denghua Zhang</dc:creator>
				<category><![CDATA[General]]></category>
		<category><![CDATA[Influence]]></category>

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		<description><![CDATA[<p>In January, the Chinese government released its third white paper on foreign aid, entitled “China’s International Development Cooperation in the New Era”. It is worth taking a closer look at the Chinese-language original, which is more detailed in content than the English-language version, to see what has changed in some aspects of China’s foreign aid &#8230; <a href="https://www.thechinastory.org/messages-from-chinas-third-white-paper-on-foreign-aid/">more</a></p>
<p>The post <a rel="nofollow" href="https://www.thechinastory.org/messages-from-chinas-third-white-paper-on-foreign-aid/">Messages from China’s third white paper on foreign aid</a> appeared first on <a rel="nofollow" href="https://www.thechinastory.org">The China Story</a>.</p>
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				<content:encoded><![CDATA[<p>In January, the Chinese government released its <a href="http://www.scio.gov.cn/zfbps/32832/Document/1696685/1696685.htm">third white paper</a> on foreign aid, entitled “China’s International Development Cooperation in the New Era”. It is worth taking a closer look at the Chinese-language original, which is more detailed in content than the English-language version, to see what has changed in some aspects of China’s foreign aid program, and what has not. Hopefully the findings can bring a better understanding of the prospects of Chinese aid and its potential impact on the international aid system.</p>
<p>China is the world’s largest emerging donor, and Chinese foreign aid is going to be more instrumental in Chinese external relations. In particular, as the white paper emphasises, the government has used and will continue to use its foreign aid to support the <a href="https://onlinelibrary.wiley.com/doi/full/10.1002/app5.231">concept</a> of “global community of shared future” and the Belt and Road Initiative. As major components of the “Xi Jinping Thought on Diplomacy”, these two strategies will guide the Chinese aid program and also make strategic considerations more important factors in aid allocation.</p>
<h4>What has changed</h4>
<p>China has become increasingly active in supporting <a href="http://english.www.gov.cn/archive/whitepaper/202101/10/content_WS5ffa6bbbc6d0f72576943922.html">policy planning</a> of recipient governments, covering a wide range of sectors, such as national economic development, infrastructure, electricity, customs, taxation, agriculture, environmental protection and water resources. This is a new development. By “exporting” its expertise, China aims to expand its influence in the global South.</p>
<p>There is also more focus on humanitarian aid, with a <a href="http://english.www.gov.cn/archive/whitepaper/202101/10/content_WS5ffa6bbbc6d0f72576943922.html">whole chapter</a> on the sector reaffirming China’s commitment to supporting countries responding to disasters and public health emergencies, post-disaster reconstruction, disaster prevention and risk reduction. It extols China’s Covid-19 assistance operations overseas as the “most intensive and largest-scale emergency humanitarian assistance mission” in China’s history since 1949.</p>
<p>The white paper pledges to provide US$2 billion to countries most affected by the pandemic over the next two years and supply Covid-19 vaccines, when ready, as public goods. Little wonder that in the near future, Covid-19 diplomacy, with its focus on medical assistance, vaccines and post-crisis recovery, will prevail in China’s foreign aid program.</p>
<p><a href="http://english.www.gov.cn/archive/whitepaper/202101/10/content_WS5ffa6bbbc6d0f72576943922.html">Support</a> for the World Health Organisation is clearly stated:</p>
<blockquote><p>The WHO has made a significant contribution to the fight against the pandemic by leading and encouraging global cooperation. To support the WHO is to support global cooperation in the fight against the pandemic and support the effort to save lives.</p></blockquote>
<p>Throwing its weight behind the WHO is consistent with China’s policy of visibly supporting the UN-centric international system, which China believes serves its best interests.</p>
<p>Another <a href="http://english.www.gov.cn/archive/whitepaper/202101/10/content_WS5ffa6bbbc6d0f72576943922.html">whole chapter</a> is devoted to international exchanges and trilateral cooperation, with the mention of pilot projects with Switzerland, Portugal, the UK, the US, Australia and New Zealand over the period 2013–18. The message is that China is willing to cooperate with traditional donors in the aid sector, but such partnerships must follow certain rules, such as: trilateral aid projects need to “be proposed, agreed and led by recipient countries”; they should be promoted on a gradual basis; and all sides need to focus on mutual respect, trust and learning. It is expected that China will expand <a href="https://press.anu.edu.au/publications/series/pacific-affairs/cautious-new-approach">trilateral aid</a> experimentation with UN organisations and selected traditional donor states.</p>
<p>What hasn’t changed<br />
The white paper begins with the <a href="http://english.www.gov.cn/archive/whitepaper/202101/10/content_WS5ffa6bbbc6d0f72576943922.html">statement</a> that “China is the largest developing country in the world”. It also emphasises that the South-South cooperation is the “fundamental positioning” (<em>ding wei</em>) of China’s foreign aid program which “falls into the category of South-South cooperation and therefore is essentially different from North-South cooperation”.</p>
<p>These points demonstrate that although China is the world’s largest emerging donor and the second-largest economy, it will continue to cling to its identity as a developing country and a South-South cooperation partner.</p>
<p>Siding with the global South rests on China’s diplomatic and strategic considerations: trust of Western countries is limited due to deep-rooted suspicions, China puts more trust in the global South than the West, and developing countries can provide China valuable support (diplomatically and strategically) in times of need, such as the current Covid-19 crisis.</p>
<p>The developing-country identity can also help China fend off pressure from traditional donors to provide more aid. As the white paper <a href="http://english.www.gov.cn/archive/whitepaper/202101/10/content_WS5ffa6bbbc6d0f72576943922.html">says</a>, China “will continue to shoulder the international responsibilities commensurate with its development level and capacity”.</p>
<p>Furthermore, emphasising that South-South cooperation is a supplement to North-South cooperation, and not a replacement to it, provides more ammunition for China to resist pressure from traditional donors. And it assures traditional donors that China is not aiming to create a parallel international aid system.</p>
<p>Not interfering in recipient countries’ internal affairs, not attaching political strings to its foreign aid and respecting the development paths chosen by recipient countries – these tenets are entrenched in Chinese aid, and reiterating them in the white paper suggests that Beijing has been satisfied with these basic principles. As such, China can be expected to continue to circumvent “sensitive” issues such as democracy and good governance in its aid program.</p>
<p>Similar to the first two white papers on foreign aid released in <a href="http://english.www.gov.cn/archive/white_paper/2014/09/09/content_281474986284620.htm">2011</a> and <a href="http://english.www.gov.cn/archive/white_paper/2014/08/23/content_281474982986592.htm">2014</a>, the 2021 white paper includes debt relief in its list of achievements. What remains unchanged is that debt relief has targeted interest-free loans, rather than concessional loans. For example, over the period 2013–18, China wrote off 98 interest-free loans owed by recipient countries, totalling RMB4.18 billion (US$640 million). As concessional loans (and commercial loans) comprise the majority of debts in recipient countries, loans will remain an outstanding concern.</p>
<p>The Chinese government has realised the gravity of the debt issue. The white paper emphasises that China and recipient countries should rely on bilateral consultations to solve the debt problem. Therefore, more such consultations can be expected in the future. Past experience <a href="http://dpa.bellschool.anu.edu.au/sites/default/files/publications/attachments/2018-12/ib2018_29_chinese_concessional_loans_part_2_-_pacific_indebtedness.pdf">suggests</a> that in the case of debts related to concessional loans, repayment extension is more likely than forgiveness.</p>
<p>&nbsp;</p>
<p><em>This article was originally published on <a href="https://www.lowyinstitute.org/the-interpreter/messages-china-s-third-white-paper-foreign-aid">The Interpreter</a> website on 5 February 2021.</em></p>
<p>&nbsp;</p>
<p>Image: <a href="https://www.facebook.com/ChinaEmbassyManila/photos/pcb.1277475525782852/1277475452449526">Chinese Embassy Manila</a></p>
<p>The post <a rel="nofollow" href="https://www.thechinastory.org/messages-from-chinas-third-white-paper-on-foreign-aid/">Messages from China’s third white paper on foreign aid</a> appeared first on <a rel="nofollow" href="https://www.thechinastory.org">The China Story</a>.</p>
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		<title>Chinese foreign aid could face tough times ahead</title>
		<link>https://www.thechinastory.org/chinese-foreign-aid-could-face-tough-times-ahead/</link>
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		<pubDate>Sat, 01 Aug 2020 03:54:12 +0000</pubDate>
		<dc:creator>Denghua Zhang</dc:creator>
				<category><![CDATA[General]]></category>
		<category><![CDATA[Influence]]></category>

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		<description><![CDATA[<p>Foreign aid has long been used by the Chinese government as a diplomatic tool to expand its influence in developing countries. Despite its impressive growth in the past two decades, Chinese aid faces challenges that limit its impact. China faces the dilemma of needing to consolidate its relations with developing countries by providing more aid &#8230; <a href="https://www.thechinastory.org/chinese-foreign-aid-could-face-tough-times-ahead/">more</a></p>
<p>The post <a rel="nofollow" href="https://www.thechinastory.org/chinese-foreign-aid-could-face-tough-times-ahead/">Chinese foreign aid could face tough times ahead</a> appeared first on <a rel="nofollow" href="https://www.thechinastory.org">The China Story</a>.</p>
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				<content:encoded><![CDATA[<p><i><span style="font-weight: 400;">Foreign aid has long been used by the Chinese government as a diplomatic tool to expand its influence in developing countries. Despite its impressive growth in the past two decades, Chinese aid faces challenges that limit its impact. China faces the dilemma of needing to consolidate its relations with developing countries by providing more aid while facing the challenge of a likely reduced aid budget due to financial constraints and the economic impacts of COVID-19.</span></i></p>
<p><b>Chinese aid at a glance</b></p>
<p><span style="font-weight: 400;">The tactics and priorities for</span> <span style="font-weight: 400;">Chinese foreign aid have evolved over time. Aid was used by the People’s Republic of China to obtain recognition and expand influence in socialist and developing countries from the 1950s through to the 1970s. The normalisation of bilateral relations between China and western countries in the 1970s reduced the need for China to court developing countries for diplomatic support. This new development, coupled with China’s adoption of the reform and open up policy in the late 1970s, resulted in China shifting its focus to domestic economic development, and reducing the foreign aid budget.</span></p>
<p><span style="font-weight: 400;">The economic success in the following three decades has fuelled China’s ambition to be a global power, or ‘</span><a href="http://www.cctv.com/special/777/2/52013.html"><span style="font-weight: 400;">the rejuvenation of the Chinese nation</span></a><span style="font-weight: 400;">’. This explains the rapid growth of Chinese aid outlay in Africa, Asia, Latin America, the Caribbean and Pacific islands since the early 2000s. This trend is most evident in the period since Xi Jinping took office in late-2012. China’s largess in developing countries has largely been used to support Xi’s grand strategies typified by the Belt and Road Initiative and the building of a ‘</span><a href="https://onlinelibrary.wiley.com/doi/full/10.1002/app5.231"><span style="font-weight: 400;">community of common destiny</span></a><span style="font-weight: 400;">’, and to showcase its fulfilment of moral duty as a great power.</span></p>
<p><b>Aid assessment</b></p>
<p><span style="font-weight: 400;">China’s aid program has achieved some major strategic success. For example, it has placed Beijing in an absolutely advantageous position in the diplomatic tug-of-war with Taiwan, reducing the number of Taiwan’s diplomatic partners from 70 in 1969 to 15 in 2020, most recently in the prominent case of Solomon Islands. With China being Cambodia’s biggest aid donor, Cambodia has been a firm</span><a href="https://www.iseas.edu.sg/images/pdf/ISEAS_Perspective_2017_66.pdf"> <span style="font-weight: 400;">supporter</span></a><span style="font-weight: 400;"> of China’s stance on the South China Sea disputes despite the pressure from other claimant states.</span></p>
<p><span style="font-weight: 400;">A closer look at Chinese aid reveals challenges, however. First, Chinese aid lacks influence in ‘soft’ areas. This is caused by an over-concentration of Chinese aid on the infrastructure sector especially large-scale projects. To avoid ‘offending’ recipient governments, China deliberately circumvents ‘soft’ areas such as governance, human rights, gender issues and democracy.</span></p>
<p><span style="font-weight: 400;">Second, these infrastructure projects are mostly funded by the China Export-Import Bank with concessional loans which need to be repaid. Compared with grant aid and interest-free loans (which could be written off upon requests), providing aid in the form of concessional loans enables China to satisfy the rising demands  from recipient countries for more aid while reducing the financial burden on China, but it can result in growing debt burden and risk, especially in fragile economies. Currently, China only approves repayment extensions for recipient countries on an ad hoc basis by taking into consideration the overall bilateral relations and China’s geostrategic and economic interest. In other words, the debt issue has been postponed but not solved. There is also no sign that China’s policy on debt will change anytime soon. Even in the current environment when China needs the diplomatic support of developing countries most amid mounting pressure from the US and its allies, the Chinese government has only</span><a href="https://www.fmprc.gov.cn/mfa_eng/wjbxw/t1787197.shtml"> <span style="font-weight: 400;">agreed</span></a><span style="font-weight: 400;"> to suspend rather than forgive debt repayments from 77 developing countries.</span></p>
<p><span style="font-weight: 400;">Third, China’s delivery of aid, similar to many of its other diplomatic activities, has relied on a government-to-government approach. This practice is a two-edged sword. It is welcomed by some officials in recipient governments and also speeds up the negotiation and allocation of Chinese aid. However, the vast number of non-government groups are excluded from this process, which limits the effectiveness of Chinese aid and the scope of its beneficiaries. </span></p>
<p><b>Unfolding dilemma</b></p>
<p><span style="font-weight: 400;">China’s aid program could face tough times ahead and a vexing dilemma. Strategically, to strengthen relations with developing countries, China needs to increase its aid spending. Tensions in China-West relations have escalated. In July, US Secretary of State Mike Pompeo</span><a href="https://www.state.gov/communist-china-and-the-free-worlds-future/"> <span style="font-weight: 400;">said</span></a><span style="font-weight: 400;">, ‘securing our freedom from the Chinese Communist Party is the mission of our time’. In the same week, Xi Jinping</span><a href="http://m.news.cctv.com/2020/07/23/ARTI0UkFs3Ag4FF7cBFPoIoD200723.shtml"> <span style="font-weight: 400;">urged</span></a><span style="font-weight: 400;"> the party and the Chinese people to ‘safeguard the great socialism established by the Chinese Communist Party and pass it on from generation to generation’. The deterioration of relations with the West will naturally lead China to forge closer ties by all possible means with the developing world, which has long been</span><a href="https://www.fmprc.gov.cn/mfa_eng/wjb_663304/wjbz_663308/2461_663310/t1081897.shtml"> <span style="font-weight: 400;">regarded</span></a><span style="font-weight: 400;"> as ‘the basis of China’s diplomacy’.</span></p>
<p><span style="font-weight: 400;">Financially, however, the Chinese aid program is likely to feel the chilling effects of economic slowdown. The impact of COVID-19 has already affected China’s economy, resulting in a</span><a href="http://www.stats.gov.cn/english/PressRelease/202004/t20200420_1739811.html"> <span style="font-weight: 400;">6.8 per cent contraction</span></a><span style="font-weight: 400;"> of GDP in the first quarter of 2020 compared with last year, according to China’s National Bureau of Statistics. Although the Bureau reported a GDP bounce back to</span><a href="http://www.stats.gov.cn/english/PressRelease/202007/t20200717_1776596.html"> <span style="font-weight: 400;">3.2 per cent</span></a><span style="font-weight: 400;"> in the second quarter, the ongoing trade war with the US, and deteriorating China-West relations more generally are likely to impinge on China’s growth performance in the future. Not surprisingly, in May 2020, Chinese Premier Li Keqiang</span><a href="https://www.fmprc.gov.cn/mfa_eng/wjdt_665385/zyjh_665391/t1783859.shtml"> <span style="font-weight: 400;">urged</span></a><span style="font-weight: 400;"> government at all levels in China to ‘tighten their belts’, pledging that ‘the Central Government will lead by example by living on a tight budget’.</span></p>
<p><span style="font-weight: 400;">Under these circumstances, Chinese aid spending is unlikely to rise in the near future. Indeed, a reduction in the long run may be a real possibility with potential negative implications for China’s influence around the world.</span></p>
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