context: The 32nd meeting of the Central Commission for Deepening Reform on 6 February 2018 called for ‘optimising the strategic deployment of foreign aid’, increased investment and project management. This marks a re-imagining of the structure and objective of China’s foreign aid.

With China’s growing national strength, argues Mao Xiaojing 毛小菁 Ministry of Commerce Institute of International Trade and Economic Cooperation associate fellow, it is imperative that China’s foreign aid be repositioned and its role be clarified. Recent announcements from the Central Commission for Deepening Reform are, he argues, the first official call for foreign aid to embody the Belt and Road Initiative (BRI) and international capacity cooperation.

In the past, foreign aid was mainly directed at the needs of aid recipients, notes Liu Haifang 刘海方 Peking University Center for African Studies deputy director, but now foreign policy works to

  • emphasise coordination of overall work on foreign aid and domestic and international strategies
  • upgrade the inter-ministerial foreign aid coordination mechanism
  • focus on more three-dimensional foreign aid projects, such as climate change, environmental protection and food security
  • work towards more channels for consultation and decision-making between ministries

Mao believes that this year’s reform will create a streamlined process for foreign policy creation, with

  • Ministry of Commerce to be more responsible for the formulation of macroeconomic policy planning, delegating specific project management
  • expanded size and scale of foreign aid

There are remaining questions on structure and approach. Citing Xi Jinping’s US$60 bn pledge for cooperative foreign aid programs in December 2015, Liu argues that China must examine

  • the division between grants, interest-free loans and preferential loans
    • under the Africa deal, there are US$5 bn in grants and interest-free loans
    • the remaining US$55 bn are preferential loans