Three ways the international development community can work better with China in 2015

Zhenbo Hou
5 January 2015
Comment
With the end of the Millennium Development Goals, the 10th World Trade Organisation Ministerial Conference and the Paris climate summit, 2015 will be an exciting year for the international development community. The G20 Antalya Summit in November is another one to watch, as Turkey has already development as one of its priorities.

What is China’s role in all of this? Already the world’s largest economy on purchasing power parity terms, it will join the G20 troika system this year, taking over the chair in 2016. Since China has its own experiences of development, its own approach and its own ambitions, it will undoubtedly seek to put its own stamp on the global development agenda. If China and traditional donors don’t reach a level of mutual understanding, it’s not just their relations that will be affected. Conflicting objectives and overlapping policies risk seriously undermining each other’s policy effectiveness.

So how can the two groups arrive at a mutual understanding at the start of such an important year? Here are three suggested starting points.

1. Recognise that China is not a monolithic entity

Development professionals outside China tend to view China’s engagement with Africa and the developing world as somewhat monolithic and driven by a grand strategy. But if you talk to policy makers and academics in China, that’s not really the case. For example, China’s powerful state-owned enterprises (SOEs) and an increasingly large number of small private businesses are pursuing their own commercial agendas overseas, which are often outside Beijing’s control.

I personally encountered a Chinese SOE in Nigeria that began as a borehole digging team on a foreign aid contract 30 years ago, and is now becoming majority privately held through management buyout. It’s unlikely they will take orders from the Chinese embassy against their business interests. Furthermore, to think that Chinese chicken farm traders in Zambia would take China’s grand Africa strategy to heart is simply unrealistic.

2. Address the administrative bottle neck in China’s foreign aid policy

Because there is no international development ministry in the Chinese government, its foreign aid effort has to be coordinated between the Foreign Ministry, Ministry of Commerce, Ministry of Finance, and so on. This creates a problem: China’s Ministry of Commerce (the main ministry for allocating aid), or more precisely its Department of Foreign Assistance, is relatively small and low profile in the administrative hierarchy. It doesn’t really have sufficient personnel, capacity or expertise to execute China’s international development effort.

In fact, when foreign aid officials visited ODI in 2013, the institutional and technical challenges they faced – such as a lack of human resources and the near absence of a monitoring and evaluation office – became clear. This could explain why China’s foreign aid and international development effort seems sporadic and inconsistent at times.

International NGOs also criticise China’s development policies and programmes for not being transparent enough and failing to engage with independent evaluators. Perhaps China now needs to give its development policy the autonomy to design, test and implement policies. If so, a DFID-style ministry could help manage its development efforts – and it is also worth considering whether the government could be more open to partnering with international think-tanks and NGOs.

3. International development with Chinese characteristics

If China becomes a serious player in international development, the big question is how it can use its own experience of industrialisation to help Africa’s economic transformation.

China has already begun to provide leadership in some international organisations. But more significantly, it has also set up its own versions of multilateral development finance institutions such as the BRICS Development Bank, Asian Infrastructure Investment Bank, New Silk Road Infrastructure Fund, and so on. With the Bretton Woods institutions stuck in the 1980s (if not 1947) and Washington blocking any meaningful reform in governance, these Chinese-sponsored institutions are likely to continue to gather pace. If western governments don’t want to actively respond to these initiatives, participating in or working with these new organisations, their institutions (the Bank and the Fund, but also most of the regional development banks) will wither away.

Chinese-sponsored institutions have genuine 21st century potential. They hold a strong appeal not just for Africa, but across Asia and elsewhere. The challenge is to make them democratic and inclusive and, as China often advocates publicly, to work with recipient countries to ensure a host country-driven approach to development.

Finally, perhaps it is time for China to work together with and try to reform the traditional donors too. Its successful experience in poverty eradication based on rapid GDP growth has already swung the development debate towards a more growth-based approach, compared to the approach of the Millennium Development Goals. With several key opportunities for China to help shape the international development agenda in 2015, I believe it is now time for the international development policy community to work with China to seize that opportunity.

This blog draws on an ODI event on 17 November 2014 at which China’s Special Representative on African Affairs, Ambassador Zhong Jianhua, spoke on China-Africa relations and China’s international development efforts.

Zhenbo Hou