Report exposes size of China's secretive aid budget

Story highlights

  • China is increasingly outspending the US on foreign aid
  • China spends more on projects that do not generate economic growth for recipient countries, says report

Hong Kong (CNN)US President Donald Trump has called for major cuts in foreign aid under his America First policy, raising alarm among philanthropists and sparking warnings it could be a "death sentence" for some countries.

As the US pulls back, a new report suggests China is poised to replace it as the primary donor for much of the developing world, but big concerns remain about the lack of transparency in how Chinese money is spent and what effect its assistance has on recipient countries.
    "If the US follows through on its rhetoric and scales back its global footprint, China may be well-positioned to step into the breach and cement its role as a preferred donor and lender to the developing world," said Samantha Custer, director of policy analysis at AidData, which Wednesday published the most detailed breakdown yet of China's foreign aid programs.
      A large amount of Chinese aid, it revealed, goes to African nations, which make up seven of the top 10 recipients of aid from China by project volume. China has 704 projects in total. Angola and Ethiopia combined received almost $32 billion of Chinese commitments in the period 2000-2014, almost 10% of the total.
      However, much of this assistance occurs within an "informational black hole" which the study is trying to illuminate.
      "The Chinese government actually considers the details of its overseas development programs to be a state secret," AidData executive director Brad Parks told CNN.
        Beijing's secrecy, AidData found, masks a far larger foreign aid footprint than previously estimated.
        And while the report finds "Chinese aid substantially improves economic growth," it also deems the majority of current spending less than effective and warns it may undermine efforts to use aid to promote democracy and political reform.

        Outspending the US

        Over the period 2000-2014, China funded over 4,300 projects in 140 countries to the tune of $354 billion.
        Total US overseas aid during that period was only slightly higher -- $394 billion -- and China actually outspent the US in five of the 15 years studied, according to AidData.
        However, Parks said simple dollar totals mask important differences in the nature of the assistance provided.
        "Chinese government spending nearly rivals US spending during that 15 year period, but the color of the money -- even though they're providing roughly comparable amounts -- is very different," he said.
        While China provides roughly $5 billion a year in official development assistance (ODA), the type of projects most people typically associate with overseas aid, the bulk of its spending is on other official flows (OOF), which do not meet ODA criteria and can include commercial projects.