Can reshuffle help Beijing position its foreign aid more effectively?

Appointing a career diplomat to lead the agency set up to coordinate the aid system could be the latest attempt to address an image problem
Beijing faces ‘debt-trap diplomacy’ tag, scepticism about definition of aid and controversies over whether recipients back it on issues such as Taiwan and Tibet

Shi Jiangtao

Published: 6:39pm, 13 Apr 2021

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For years many people have argued Beijing needs a reform of its foreign aid system to bolster its image as a responsible global power in the face of growing criticism over the lack of transparency and accountability in its aid projects.

Urgency has been added by the colossal investment strategy Belt and Road Initiative, at the heart of the country’s ambitious global outreach, coming under intense scrutiny and being described as “debt-trap diplomacy”.

Last week Beijing reshuffled its top foreign aid agency and appointed a career diplomat as its head. The appointment of foreign vice-minister Luo Zhaohui as director of the China International Development Cooperation Agency (CIDCA) is probably another step to tackle the worsening image problem of Beijing’s foreign aid projects and “vaccine diplomacy”.

The CIDCA was created in 2018 in a government overhaul soon after Xi Jinping scrapped the presidential term limit and the belt and road, his signature foreign policy, was enshrined in the constitutions of the country and the Communist Party. Tasking a body with coordinating China’s fragmented aid system, involving over 30 government agencies, was hailed as a breakthrough after years of inter-department wrangling.

The rivalry between China’s foreign and commerce ministries over control of aid policy and projects is an open secret. It has often led to tensions in overseas missions between the former’s ambassadors and the commerce ministry’s economic and commercial counsellors.

On the surface it’s just another internal tug of war, but it actually underlines a foreign policy dilemma, over how to prioritise China’s economic interests and broader foreign policy goals.

The foreign ministry clearly has an upper hand after its commerce counterpart, which used to be in effective control of aid programmes, failed to block setting up the new agency. Luo’s appointment last week and the fact that he will report to Foreign Minister Wang Yi mirror a hierarchical shift.

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However, it remains to be seen how the CIDCA, which has vice-ministerial status, can fulfil effectively its mandate of coordinating, monitoring and evaluating the efficiency of powerful bodies – especially the commerce ministry – that are still responsible for aid projects’ implementation.

As China moves from mainly an aid recipient to one of the largest donors, there has been growing scepticism over its self-declared status as a developing country and its broad definition of foreign aid, which includes commercial investment and military assistance.

Despite its claims of non-intervention and non-conditionality in allocating aid funds, Beijing has been no stranger to controversies over whether a recipient state sides with it on contentious issues such as Taiwan and Tibet.

In this context, Beijing has in recent years sought to reposition itself and replace “foreign aid” with “international development cooperation” in its official narrative to counter international criticism. In a white paper on foreign aid policy in January, it billed the belt and road project as “significant public goods China offers to the whole world and a major platform for international development cooperation”.

There is no denying China has a long way to go to explain itself better and rally support through effective aid programmes in the era of US-China rivalry. That is why the appointment of Luo may have come at a good time, with its opaque, fragmented aid system needing an urgent facelift.