Thursday, October 12, 2017

China's Aid and Other Official Financing to Africa

AIDDATA, a research lab at the College of William and Mary, published in October 2017 a working paper titled "Aid, China, and Growth: Evidence from a New Global Development Finance Dataset" by Axel Dreher, Heidelberg University, Andreas Fuchs, Heidelberg University, Bradley Parks, College of William and Mary, Austin M. Strange, Harvard, and Michael J. Tierney, College of William and Mary.

The paper introduces a new dataset of official financing--including foreign aid (overseas development assistance or ODA as defined by the OECD) and other forms of concessional and non-concessional state financing (other official financing or OOF)--from China to 138 countries between 2000 and 2014. The distinction between ODA and OOF is critical. Most Chinese OOF consists of loans that must be repaid and does not qualify as ODA. Most of what is covered in this paper is OOF and not ODA. The study suggests that only about 23 percent of China's global development program is financed with ODA. Any comparison of China's aid with aid from Western countries should be careful to compare ODA to ODA and OOF to OOF.

In the years surveyed, by dollar value 34 percent of China's total official finance (ODA and OOF) went to Africa. More significantly, 58 percent of its ODA went to Africa. In terms of number of projects for both ODA and OOF, the top 10 recipient countries were in order: Cambodia, Pakistan, Zimbabwe, Angola, Sudan, Tanzania, Ghana, Kenya, Ethiopia, and Sri Lanka. The most important recipient countries for both ODA and OOF by dollar value were in order: Russia, Pakistan, Angola, Ethiopia, Sri Lanka, Laos, Venezuela, Turkmenistan, Sudan, and Ecuador.

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