A Cautious New Approach: China's Growing Trilateral Aid Cooperation – a book by Dr Denghua Zhang

In March 2020, ANU Press published A Cautious New Approach: China’s Growing Trilateral Aid Cooperation — a book authored by Department of Pacific Affairs’ Research Fellow Dr Denghua Zhang. The book, which focuses on China’s foreign aid cooperation in the Asia-Pacific region, was one of ANU Press’ Top Ten New Releases for 2020. We asked Dr Zhang about his motivations for writing the book and how his research has addressed gaps in knowledge and understanding about China’s foreign policy and aid cooperation in the region. Some highlights from his responses are below.

What motivated you to undertake the research that informed this book?

I was curious about finding answers to two related questions. First, what is the impact of foreign assistance on the development outcomes in the Asia-Pacific region? Many countries have received large amounts of aid, but the outcomes in terms of development are quite mixed and, in many instances, less than satisfactory. I wanted to understand more about what influences these different outcomes. Second, I wanted to understand whether emerging donors and traditional donors could work together in recipient countries? This second question deserves particular attention as new economies, especially China, have become important players in the sector of development cooperation and their influence is rising. This book mainly focuses on the second issue.

The rise of China in the Pacific has received much attention in Australia and the region. What does your research reveal about China’s foreign policy in the Pacific? How does its aid spend to the Pacific region compare with its aid spend in other regions?

My research shows that China’s foreign aid program has been influenced by China’s three co-existing identities: a socialist country, a developing country and a rising great power. These three identities influence China’s aid to the Pacific, which is expected to serve Beijing’s political (including the One-China policy), economic and global image interests. China highlights that it treats the China-Pacific relations as part of China’s South-South cooperation. According to China’s three white papers on foreign aid, the Pacific region received 4%, 4.2% and 3.71% of Chinese total aid in the periods of 1950-2009, 2010-2012 and 2013-2018, respectively. Given the total growth of Chinese aid, Chinese annual aid spending in the Pacific has grown and is expected to continue growing. Although, proportionate to its total aid spend, China’s aid to the region has remained relatively stable.

What are some of the unique aspects of China’s aid policy in the Pacific?

Trilateral aid cooperation is a new phenomenon in China’s foreign aid program. It is particularly interesting that the Pacific region has been a testing place for China’s trilateral cooperation. Australia and China have cooperated to help Papua New Guinea to tackle malaria, which is a serious public health problem in the Pacific country. Similarly, New Zealand and China worked jointly to upgrade the water supply system in Rarotonga, the main island and tourist hot spot in Cook Islands. Both projects were mentioned in China’s foreign aid white papers. The lessons from the two projects may well shed light on future cooperation in the region. Although these trilateral projects are still a drop in China’s foreign aid bucket, they represent a new modality of aid delivery China is committed to further testing. China has stated said that trilateral aid projects ‘should be proposed, agreed and led by the recipient countries.’ If this principle is truly honoured, it could contribute to the localisation, ownership and harmonisation of aid delivery in the Pacific.

In your book you mention that there is a ‘… lack of understanding regarding China’s aid approach’. How does your book contribute in closing this gap?

I hope this book will be useful in three ways: first, it is the first book to specialize in China’s trilateral aid cooperation and provide a detailed account of this modality. Second, it provides a three-layered approach to analysing China’s foreign aid, including China’s national interests, international engagement and domestic institutions. For example, Chapter Three of the book unpacks China’s complicated aid management system, including the roles of different ministries and actors, and their attitudes towards aid cooperation. Third, this book has largely drawn upon my interviews with 140 aid officials, scholars and participants of Chinese trilateral aid projects. Their insights are very useful.

What do you think the future holds for Chinese aid in the region?

Firstly, I think the Chinese aid will continue to grow, provided that China is able to tackle the COVID-19 pandemic and its impact on the Chinese economy. Second, in terms of aid components, concessional loans and then grants will continue to dominate Chinese aid in the Pacific. Third, China will use foreign aid to support its Belt and Road projects in the region, which could motivate China to provide more aid to the region. Fourth, the geopolitical competition between China and traditional powers in the Pacific is expected to continue, despite the change of government in the US. In this context, foreign aid will play a more prominent role in China’s diplomacy in the Pacific. This also means it will be more difficult, if not impossible, for China and traditional donors to conduct trilateral aid projects in the region. Last, but not the least, it is important that emerging and traditional donors provide more assistance to the Pacific islands in addressing the challenge of climate change. This is a critical issue for the region.

Dr Zhang’s book ‘A Cautious New Approach: China’s Growing Trilateral Aid Cooperation’ is available for download via ANU Press.