Comparing US and Chinese Foreign Aid in the Era of Rising Powers

Abstract

China is emerging as a key state actor in international developmenta sector that has been dominated by the United States for decades. US and Chinese foreign aid programs can be compared on the basis of several benchmarks: 1) official state definition and accounting of foreign aid programs; 2) historical foundations and origins; 3) sectoral distribution, particularly in terms of the professed goals and objectives of the aid program; 4) nature of targeted recipient actors; 5) institutional mechanisms for delivery in recipient countries. Notwithstanding particular differences, Chinese and US foreign aid portfolios demonstrate their respective strategic political and economic interests in two ways: they shape the domestic politics of recipient countries in ways that accommodate the donor government's policy preferences, and they enhance the social reputation and legitimacy of the donor state in the international system.

United States Foreign Aid and Multilateralism Under the Trump Presidency

“…The origins of US foreign strategic assistance programs stem from compelling geostrategic interests (Lancaster 2007;Regilme and Hartmann 2018;Regilme and Hodzi 2021). After the Second World War, the US and the Soviet Union emerged as competitors for dominance in the international system, and the Marshall Plan thwarted the spread of communist influence of the (Eichengreen et al 1992).…”

“…In some cases, donor countries instrumentalize foreign aid in ways that blatantly reinforce donor interests, through the linkage of aid with geostrategic considerations to the detriment of effectively addressing poverty (Brown 2016). While there seems to be inconclusive findings on how exactly foreign aid reinforces authoritarian regimes (Faust and Bader 2014), some recent comparative empirical studies suggest that US foreign aid induces state repression and deterioration in physical integrity rights situation in recipient countries (Regilme and Hartmann 2018;Regilme and Hodzi 2021;Regilme and Parisot 2017). Notably, particularly because of "amplification effect," foreign assistance "amplifies recipients' existing political-institutional orientations," thereby making "dictatorships more dictatorial and democracies more democratic" (Dutta, Leeson, and Williamson 2013, 208).…”

“…Although the Trump presidency was not the first administration to advocate for significant reductions in aid and less emphasis on multilateralism, Trump's persistent discourses on "coercion instruments over diplomacy" were quite unprecedented for a post-Cold War era US president (Haar 2019, 1). Meanwhile, China, which is widely perceived as the foremost challenger to US dominance, remains determined in expanding its official finance programs in the Global South (Regilme and Hodzi 2021). While Trump persistently discredited multilateralism and foreign aid as instruments of American power, Chinese President Xi Jinping (2017, 26) offered an alternative view during his 2017 speech in Davos: "we should adhere to multilateralism to uphold the authority and efficacy of multilateral institutions."…”

Impact of corruption on Chinese investment in African countries

“…There are other considerations when discussing the impact of corruption on Chinese FDI in Africa. China’s presence in Africa can be traced back to a few decades (Regilme and Hodzi, 2021). Since the 1960s, Chinese foreign aids in Africa have been based on principles of respect for sovereignty, noninterference in internal affairs and non-conditionality with a focus on low-cost projects that foster self-reliance and independent development.…”

“…Zhang (2021) finds similar results showing that benefits from Chinese FDI to African economies are greater than those from the FDI from the developed world. Many Chinese investment projects are tied with development aids (Wolf et al , 2013; Regilme and Hodzi, 2021). Leaders of African countries are pleased with China not only Chinese put their money in Africa for its benefits but also the terms of engagement have been amazingly generous (Adem, 2016; Ogwang and Vanclay, 2021).…”