Working Paper 107 - China, Africa and the International Aid Architecture

This paper analyses China’s growing foreignaid and export credit programme as anelement of the changing international aidarchitecture. The paper finds that practicesgoverning Chinese aid and developmentfinance diverge from clear OECD standardsand norms on transparency and definitions,the management of concessional exportcredits, and the management of sovereigndebt. In the area of environmental and socialprotections, corruption, and governance, thepaper finds mixed results. Chinese norms onenvironmental and social safeguards areevolving rapidly. There is some evidence thatthe framework for development loans hasbegun to take these higher standards intoaccount. Regarding governance, both Chinaand the traditional sources of developmentfinance have rules that discouragecorruption in the procurement of aid, butexport credits are less well policed. Neitherseem to have rules for when or how aidshould be restricted when a pattern ofcorruption characterises an entire recipientgovernment. The global aid regime is notwell-institutionalised regarding democracyand human rights. Neither the IMF, the WorldBank nor the Chinese apply conditionality inthis area. Many bilateral donors do applysuch conditions, but relativelyinconsistently. Many still lack clear and firmstandards. In sum, Chinese practice is not asdifferent in this arena as often believed.