Chinese Development Finance in Africa Roughly Equal to US Assistance

FOR IMMEDIATE RELEASE

New dataset identifies reports of 1,673 Chinese-backed projects in 50 countries in Africa over past decade

Washington, D.C. (April 29, 2013) - How much aid does China give Africa? Does it complement or undermine the aid from the United States and other Western donors? China releases little information and outside estimates vary widely.  A novel approach to studying Chinese aid flows that relies on a database of media reports may offer fresh insights.

One initial result: Chinese official development finance to Africa seems to be roughly similar in size to the finance provided by the United States.

The new estimates come from a database compiled by AidData-- a partnership between the College of William and Mary, Brigham Young University, and Development Gateway – and a joint paper, China’s Development Finance to Africa: A Media-Based Approach to Data Collection, released this week by the Center for Global Development (CGD) in Washington, DC.

The database draws upon thousands of news reports on Chinese-backed projects in Africa from 2000 to 2011. It includes information on 1,673 official projects in 50 African countries, of which 1,422 have reached the commitment, implementation, or completion stage. All this amounts to a total of $75 billion in reported commitments of official finance during that period.

“Definitions matter a lot when trying to measure China’s aid to Africa,” says CGD senior fellow Vijaya Ramachandran, an expert on private sector development in Africa and a co-author of the new paper. “There is a huge debate about what should be counted as aid and what should not.”

Further complicating matters, Chinese package financing often brings together agreements that mix aid, investment, export credits, and both concessional and non-concessional financing. Chinese state-owned enterprises also blur the line between official government finance and private flows.

Estimates of total Chinese financial assistance to the region range from less than a billion dollars to more than $67 billion (for Exim Bank credits). Deborah Brautigam, considered by many to be the leading authority on Chinese foreign assistance to Africa, recently estimated 2007 official development assistance (ODA) from China at $1.4 billion.

The new AidData - CGD study counts as “official finance” two types of assistance:

• Official Development Assistance or ODA – concessional finance, mainly grants and loans, provided by official Chinese sources and aimed at the promotion of the economic development and welfare of developing countries. This aid largely meets the definition of ODA used by the Organization for Economic Cooperation and Development (OECD), and
• Other Official Finance or OOF – other bilateral transactions from Chinese government entities (excluding investments and military aid).

Using these definitions, the study finds that China’s ODA + OOF combined was roughly equal to that of the United States from 2000 to 2011, varying from a low of about $2 billion per year at the start of the period to a peak of about $17 billion in 2006. (See chart for a comparison of China’s official finance with comparable flows from the United States and all members of the OECD’s Development Assistance Committee (DAC)).

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By comparison, US ODA + OOF to the region has averaged about $9 - $11 billion a year in recent years. This rough comparison is useful, but just the start, say the authors.

"We are not claiming that the database is fully comprehensive,” says Bradley Parks, co-executive director of AidData and a co-author of the CGD paper. “We understand that some projects may not get picked up by the media. However, if we want to make sense of the competing claims made about Chinese 'aid' to Africa, we need higher-resolution data that are collected in a transparent, systematic, and replicable manner.”

Further analysis of the media reports of Chinese-backed projects may eventually yield insights into such controversial questions as to what extent Chinese assistance to the region is focused on natural resource extraction, and whether Chinese activities complement or compete with assistance from other donors.

The full dataset is being released online at china.aiddata.org with an explanation of AidData’s media-based data collection methodology, an interactive map to view reported projects by country and project type, and a tool for users to add information about specific projects.

“We hope to tap into a wisdom-of-crowds effect and enlist the support of scholars, journalists, and members of civil society to help make the data more comprehensive and precise," Parks adds.

The paper and new database will be launched at the Center for Global Development on Monday, April 29 at 4 pm.

AidData is a development research and innovation lab that seeks to make aid information more accessible and actionable. AidData tracks more than $5.5 trillion dollars from 90 donor agencies, undertakes cutting-edge research on aid distribution and impact, oversees efforts to geocode and crowdsource aid information, and develops web and mobile applications and custom data solutions for development finance institutions.

The Center for Global Development works to reduce global poverty and inequality through rigorous research and active engagement with the policy community to make the world a more prosperous, just, and safe place for us all. A nimble, independent, nonpartisan, and nonprofit think tank, CGD combines world-class research with policy analysis and innovative communications to turn ideas into action.