China's global development capacity brings benefits
By Ian Goldin |
China Watch |
Updated: 2018-05-30 14:08
The rise of China is good news for the world. There are many aspects to this. China's economic strength and growing significance as a contributor to world production and trade is raising global growth. It also serves to stabilize global growth as at times when growth in the United States and Europe has been weak, China has provided much-needed economic dynamism. China is a source of growing demand for products and services. Public and private investment flows from China are becoming increasingly significant and these are key drivers of development globally. They contribute to the strengthening of government revenues and expenditures on infrastructure, health, education and other vital areas of development.
China's active role in the climate change negotiations is also vital to developing countries as poor countries and poor people are particularly vulnerable to all risks. International cooperation to reduce climate change as well as pandemics and other systemic risks is essential for development, as is the prevention of conflict, as conflict leads to development in reverse and destroys life and the foundations of development.
The newly established International Development Cooperation Agency by coordinating fragmented responsibilities and activities across the Chinese government provides an opportunity to create a more harmonized aid program. This will be highly beneficial to the foreign governments and recipients, who should find that their engagements with China are simplified through this one stop shop. Greater coherence may also be anticipated as the goals of the agency follow guidelines established by the State Council. Greater efficiency and effectiveness will enhance the levels of financing and their positive impact.
It has been estimated that the universally agreed Sustainable Development Goals will require approximately $2.3 trillion per year, which is well over double the current public and private investment in the countries concerned. To this must be added the urgent investments required to reduce carbon emissions, while still allowing developing countries to overcome their often-crippling energy deficits. The implications of this is that much higher levels of aid, particularly for the least developed countries, and of private finance, for all developing countries, are required. The new China International Development Cooperation Agency will help China to play a greater role in addressing these pressing global concerns.
The volume, origin and composition of global aid flows has changed considerably in recent decades. Aid flows between developing countries are becoming more significant and in recent years have accounted for as much as aid from non-governmental organizations and are about half as much as the amount channeled through long standing multilateral financial organizations. China is estimated to give in excess of $5 billion per year.
The Beijing-based Asian Infrastructure Investment Bank and Shanghai-based New Development Bank for the BRICS countries will further leverage Chinese development assistance through co-financing with the other shareholders in these institutions. To the extent that finance flows through these banks, and is further leveraged with investments from other development banks, bilateral aid agencies and private finance initiatives, Chinese development assistance will become even more significant globally.
China's experience with aid to Africa goes back well over fifty years. In the 1970s the construction of the TanZam 1,860 km railway helped relieve landlocked Zambia's isolation. More recently, extensive Chinese investment in Africa and elsewhere has provided new investment alternatives to developing countries and much needed sources of long term finance.
From a development perspective alternative sources of finance are welcome. The new International Development Cooperation Agency is likely to help with the coordination of this investment and the combination of concessional and commercial finance, which is vital for public private partnerships. By adopting best global practices for the harmonization of aid with national standards and international best practices, it should increase both the efficiency and effectiveness of aid. Coherence of aid across different official agencies and institutions in China will increase as will the leveraging of public and private finance. This is beneficial to recipient countries in meeting their national development objectives. China, by promoting sustainable development, will be developing long-term partnerships which are in its own interests and that of the international community.
Ian Goldin is Professor of Globalization and Development at the University of Oxford and author of Development: A Very Short Introduction, Oxford University Press, 2017. See more at his website: iangoldin.org
All rights reserved. Copying or sharing of any content for other than personal use is prohibited without prior written permission.
The rise of China is good news for the world. There are many aspects to this. China's economic strength and growing significance as a contributor to world production and trade is raising global growth. It also serves to stabilize global growth as at times when growth in the United States and Europe has been weak, China has provided much-needed economic dynamism. China is a source of growing demand for products and services. Public and private investment flows from China are becoming increasingly significant and these are key drivers of development globally. They contribute to the strengthening of government revenues and expenditures on infrastructure, health, education and other vital areas of development.
China's active role in the climate change negotiations is also vital to developing countries as poor countries and poor people are particularly vulnerable to all risks. International cooperation to reduce climate change as well as pandemics and other systemic risks is essential for development, as is the prevention of conflict, as conflict leads to development in reverse and destroys life and the foundations of development.
The newly established International Development Cooperation Agency by coordinating fragmented responsibilities and activities across the Chinese government provides an opportunity to create a more harmonized aid program. This will be highly beneficial to the foreign governments and recipients, who should find that their engagements with China are simplified through this one stop shop. Greater coherence may also be anticipated as the goals of the agency follow guidelines established by the State Council. Greater efficiency and effectiveness will enhance the levels of financing and their positive impact.
It has been estimated that the universally agreed Sustainable Development Goals will require approximately $2.3 trillion per year, which is well over double the current public and private investment in the countries concerned. To this must be added the urgent investments required to reduce carbon emissions, while still allowing developing countries to overcome their often-crippling energy deficits. The implications of this is that much higher levels of aid, particularly for the least developed countries, and of private finance, for all developing countries, are required. The new China International Development Cooperation Agency will help China to play a greater role in addressing these pressing global concerns.
The volume, origin and composition of global aid flows has changed considerably in recent decades. Aid flows between developing countries are becoming more significant and in recent years have accounted for as much as aid from non-governmental organizations and are about half as much as the amount channeled through long standing multilateral financial organizations. China is estimated to give in excess of $5 billion per year.
The Beijing-based Asian Infrastructure Investment Bank and Shanghai-based New Development Bank for the BRICS countries will further leverage Chinese development assistance through co-financing with the other shareholders in these institutions. To the extent that finance flows through these banks, and is further leveraged with investments from other development banks, bilateral aid agencies and private finance initiatives, Chinese development assistance will become even more significant globally.
China's experience with aid to Africa goes back well over fifty years. In the 1970s the construction of the TanZam 1,860 km railway helped relieve landlocked Zambia's isolation. More recently, extensive Chinese investment in Africa and elsewhere has provided new investment alternatives to developing countries and much needed sources of long term finance.
From a development perspective alternative sources of finance are welcome. The new International Development Cooperation Agency is likely to help with the coordination of this investment and the combination of concessional and commercial finance, which is vital for public private partnerships. By adopting best global practices for the harmonization of aid with national standards and international best practices, it should increase both the efficiency and effectiveness of aid. Coherence of aid across different official agencies and institutions in China will increase as will the leveraging of public and private finance. This is beneficial to recipient countries in meeting their national development objectives. China, by promoting sustainable development, will be developing long-term partnerships which are in its own interests and that of the international community.
Ian Goldin is Professor of Globalization and Development at the University of Oxford and author of Development: A Very Short Introduction, Oxford University Press, 2017. See more at his website: iangoldin.org
All rights reserved. Copying or sharing of any content for other than personal use is prohibited without prior written permission.
