Can China Fill the Foreign Aid Hole?

 Brookings published on 11 March 2025 a commentary titled "Can China Fill the Void in Foreign Aid?" by Yun Sun.

China's foreign aid has consistently been a fraction of America's.  The highly publicized Belt and Road Initiative is mostly a commercial activity with a small percentage of development finance.  China's global foreign aid budget for 2024 was $2.85 billion.  Traditionally, about half the budget goes to countries in Africa.  In 2023, USAID's global budget was about $42 billion, and the State Department provided another $19 billion.  

Not only has the United States provided far more aid, but nearly all of it is in the form of grants while the largest percentage of China's aid is the concessionary part of loans.  The dismantlement of USAID by the Trump administration will leave China with more influence in a smaller space, but it doesn't mean China can step in to fill the void.   In addition, USAID's portfolio of humanitarian assistance does not overlap with China's capabilities.  China will likely seek political, diplomatic, and economic returns for any increase in its assistance.  Most significantly, Beijing will work to exploit the opportunity of American withdrawal to portray the US as the irresponsible great power.   

How China Presses Its Governance Model on the Global South

 The Atlantic Council published on 13 June 2024 an analysis titled "A Global South with Chinese Characteristics" by Niva Yau.  

China has embarked on a steadily expanding mission to promote its political system alongside its economic engagement across the Global South.  Even as China's economic growth has slowed significantly and its political system has grown more repressive under Xi Jinping, the number of countries welcoming Chinese governance lessons continues to grow, enhancing Beijing's global influence.  This has significant implications for the future of democracy, the protection of individual rights, and the nature of the global order.

One way that Beijing promotes authoritarian governance is through training programs for foreign government officials on Chinese governance practices.  This analysis investigates a new dataset of Chinese government files on such training, revealing how China uses these sessions to directly promote ideas and practices that marry economics and politics to make a case for its authoritarian capitalism model.  The analysis outlines the content Beijing teaches foreign officials and the anticipated benefits to Beijing from these programs.  It also explains how these initiatives fit into China's broader ambitions to undermine the liberal democratic norms that currently underpin the global order.  

China's Investment in Africa Is Tiny Percent of Its Global Investment

 China's global outward foreign direct investment stock at the end of 2020 reached $2.58 trillion, according to a report released by China's Ministry of Commerce.  This ranks China just behind the United States and the Netherlands as reported by the Global Times.

China's Foreign Ministry spokesperson, Zhao Lijian, commented on 22 November 2021 that China's outward foreign direct investment stock in Africa now totals $43.4 billion, the fourth highest amount in Africa.  

Comment:  While Chinese outward FDI has increased significantly in the 21st century, what is even more striking is how little of it has gone to Africa.   

China's Vocational Education Workshops in Africa

 China Brief published on 5 November 2021 an analysis titled "China's Vocational Education Workshops Seek to Strengthen Relations with Africa" by Conor McCutcheon, Savannah Billman, Johnsen Romero, and Merle Kartcher.  

China established ten Luban Workshops in Africa from 2019 to 2021.  The vocational and technical equivalent of Confucius Institutes, the Luban Workshops seek to train young African professionals with Chinese funding and cooperation.  

China's Lending Institutions

 The Overseas Development Institute (ODI) published in October 2021 a publication titled "China's Lending Landscape and Approach to Debt Relief" by Marina Rudyak and Yunnan Chen.  

This is a useful guide to Chinese financial and lending institutions and their approach to debt relief.  It helps remove some of the mystery behind China's development finance program.  

Chinese Contract Labor in Select African Countries (in French)

 Thierry Pairault posted on 15 December 2020 a working paper titled "Main-d'oeuvre chinoise en Algerie, Egypte, Guinee, Guinee equatoriale, Lesotho, Maroc, Maurice, Seychelles et Tchad."  

Drawing on information from China's Ministry of Commerce, the author tracks Chinese contract labor in Algeria, Egypt, Guinea, Equatorial Guinea, Lesotho, Morocco, Mauritius, Seychelles and Chad from 2011 to 2019.  

Primer on China's Lending to Africa

 Pinsent Masons published on 12 August 2020 an article titled "Chinese Financing: Banking with Chinese Lenders" by Kanyi Lui, a partner at Pinsent Masons law firm in Beijing.    

This is a very useful explanation of Chinese loans to Africa, which totaled $148 billion between 2000 and 2018.  China offers three categories of loans:  interest free loans from the Ministry of Commerce (about 5 percent of loans to Africa and the only ones that are forgiven); subsidized concessional loans from the China Export-Import Bank (about one-third of loans to Africa); and commercial rate loans from state-owned banks and other institutions (all of China's remaining loans to Africa).  The author provides typical interest rates and repayment periods.  

Chinese Manufacturing Investments in Nigeria

The China Africa Research Initiative at Johns Hopkins School of Advanced International Studies published in April 2020 a study titled "'Africa's China': Chinese Manufacturing Investments in Nigeria in the Post-Oil Boom Era and Channels for Technology Transfer" by Yunnan Chen.

The study outlines major Chinese investments in Nigeria's manufacturing sector, specifically looking at their potential to foster industrialization and structural transformation. Political and exchange rate instability were consistent challenges in the wake of the recent economic recession.

Is China Changing Its Approach to African Markets? (in French)

Thierry Pairault, director of research emeritus at CNRS, posted on 29 December 2019 a paper titled "La COIDIC: signe d'une nouvelle strategie." It includes a translation from Chinese of a press release from the Ministry of Commerce on what could constitute an evolution in the approach to the African market by Chinese service providers. The pretext for this press release is the agreement reached in Guinea between the Administration of Control of Major Projects and Public Procurement and a Chinese investment fund, China Overseas Infrastructure Development and Investment Corporation (COIDIC).

Statistical Data on Chinese Investment in Africa (in French)

Thierry Pairault, director of research emeritus at the Centre for the Study of Modern and Contemporary China, recently posted a series of useful charts that focus on China's direct investment and contract labor in Africa drawing on data from MOFCOM and the National Bureau of Statisitcs. The charts include:

--Chinese Investment and Industrialization of Africa (2018)
--China's Turnkey Service Contracts in Africa (2018)
--Chinese Labor under Contract in Africa (2018)
--Chinese Investment in Africa and Other Regions (2018)
--Chinese Direct Investment Flows to Africa (2017-2018)
--Chinese Direct Investment Stock in Africa (2017-2018)
--Investment, Belt and Road Countries, and Africa (2018)

China International Development Cooperation Agency

The Carnegie-Tsinghua Center for Global Policy published in September 2019 an analysis titled "The Ins and Outs of China's International Development Agency" by Marina Rudyak, Heidelberg University.

Established in 2018, the China International Development Cooperation Agency (CIDCA) combined into one agency most of China's foreign aid program. The author concluded that the CIDCA's highly ambitious agenda is a clear sign that, after years of considerable growth in China's development finance, the underlying bureaucratic system is now beginning to mature. The changes that accompanied the creation of the CIDCA show that development aid is at the forefront of Chinese policymakers agenda, but it remains to be seen how much of this promise the agency can make good on in the forseeable future.

Chinese Manufacturing Investment in East Africa

The China Africa Research Initiative at Johns Hopkins School of Advanced International Studies published in August 2019 a briefing paper titled "Assessing Chinese Manufacturing Investments in East Africa: Drivers, Challenges, and Opportunities" by Ying Xia, Harvard Law School.


The focus of the paper is Tanzania and Kenya. The author found a huge discrepancy in the number of Chinese companies cited by the Ministry of Commerce (MOFCOM) in both countries and the actual number. A large number of investments are rerouted through Hong Kong and other offshore financial centers, thus not appearing in MOFCOM statistics.

Chinese Manufacturing Investments and Knowledge Transfer in Ethiopia

The China Africa Research Initiative at Johns Hopkins School of Advanced International Studies published in March 2019 a study titled "Chinese Manufacturing Investments and Knowledge Transfer: A Report from Ethiopia" by Tang Xiaoyang, Tsinghua University.

The paper examines knowledge transfer mechanisms between Chinese investments and Ethiopian firms, institutions, and individuals at four different levels in the manufacturing sector.

The New China International Development Cooperation Agency

The Center for Advanced China Research, a non-profit research organization, published on 29 January 2019 an analysis titled "Too Much Risk or Not Enough? New Development Finance Agencies in China and the United States" by Scott Wingo, University of Pennsylvania.

In April 2018, China established its new China International Development Cooperation Agency (CIDCA) in an effort to provide better coordination of its global foreign assistance program. This analysis sheds some light on how CIDCA might operate in the years ahead.

China's Special Economic Zones in Africa: Who Are They For?

HAL archives-ouvertes published in December 2018 a paper titled "China in Africa: Phoenix Nests versus Special Economic Zones" by Thierry Pairault, emeritus director of research at the French National Centre for Scientific Research.

The paper focuses on the question of whether the Overseas Economic and Commercial Cooperation Zones (OECCZ) model that China is proposing in African countries and those along the Silk Road matches the definition of a SEZ as understood by Chinese researchers and commentators themselves. The author tentatively concludes that the OECCZ is above all "building a nest to accommodate the Phoenix [China]" without much consideration for the host countries' needs.

Chinese FDI in Africa in Decline

Thierry Pairault, research director at France's Centre National de la Recherche Scientifique, posted on 21 February 2018 part 2 of "China in Africa: Much Ado about Investment."

The author notes that in 2016, according to official Chinese statistics, China's foreign direct investment decreased 19 percent compared to 2015. China's FDI in all of Africa is about the same as what China invests in Germany.

Chinese Investment and Knowledge Transfer in Africa

The China Africa Research Initiative at Johns Hopkins University published on 27 September 2017 a paper titled "Chinese Investment and Knowledge Transfer in Africa."

Drawing on case studies in Madagascar, Kenya, Zambia, and Malawi, the researchers found that knowledge transfer is taking place with Chinese FDI, but it is happening to different extents and in different ways. There is also evidence of increased productivity through technology transfer, particularly in the agriculture sector. The area where progress has been slower is the creation of linkages with local firms.

China-Africa Relations: At a Crossroads?

China Briefing posted on 27 July 2017 a commentary titled "China-Africa Relations: At a Crossroads?" by Linh Tran Huy.

The author concludes that while the Sino-Africa relationship was primarily defined in the recent past as infrastructure and development in exchange for natural resources, the trends are changing. The shift in demographics in Africa and China should dampen China's demand for natural resources, while rising wages in China should encourage the shift of manufacturing capabilities to Africa.

China's Foreign Aid and Africa

The Australian National University published in 2017 a book on China's New Sources of Economic Growth that contains a chapter titled "China's Innovative and Pragmatic Foreign Aid: Shaped by and Now Shaping Globalisation" by Lauren Johnston, University of Melbourne, and Marina Rudyak, Heidelberg University.

Just over half of China's foreign aid goes to Africa. This chapter summarizes the evolution of China's inbound and outbound foreign aid policy. It offers an especially good historical analysis of China's outbound foreign aid. The chapter also discusses the significance of China's foreign aid for recipient countries, with particular reference to Africa.

Chinese Loans to Africa 2000 to 2014

The China Africa Research Initiative at Johns Hopkins University recently published working paper number 4 dated April 2016 titled "Eastern Promises: New Data on Chinese Loans in Africa, 2000 to 2014" by Deborah Brautigam and Jyhjong Hwang.

The paper provides an overview of a new data base on Chinese loans, the scale of the loans, their African recipients and the sectors where borrowers are investing. The study concludes that Chinese financiers loaned about $86 billion to African governments and state-owned enterprises between 2000 and 2014.