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The Chinese Aid System

Carol Lancaster
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China has become a major source of foreign aid in Asia, Latin America and especially in Africa. Chinese aid has become a source of concern for Western aid agencies--will Chinese aid discourage needed economic and political reforms in African countries? Will it burden poor countries with debt--a burden from which many have only just escaped with the debt cancellation policies adopted by many aid agencies? This Essay by CGD visiting fellow Carol Lancaster explores questions about Chinese aid--how large it is and how fast it is growing; how decisions are made on how much aid is provided each year; which countries receive it and how much they get; how the aid is managed within the Chinese government and how it is evaluated. Her bottom line: China is clearly set to play a major role in foreign aid worldwide, and the aid-giving governments of Europe, North American and Japan should expand lines of communication and, to the extent possible, collaboration with Beijing.