Should poor countries take Chinese aid money?

President Xi Jingping announced the contribution at the U.N. on Saturday as part of a global initiatve to eliminate poverty by 2030. But the main country to benefit from its recent surge in aid may be China itself.

John Taggart/ Reuters
Chinese President Xi Jinping poses after addressing the United Nations Sustainable Development Summit 2015 this weekend. China pledged $2 billion to a new UN initiative to eliminate extreme poverty by 2030.

Adding a new angle to China’s ongoing quest for global leadership, Chinese President Xi Jinping announced a gift of $2 billion in global development aid.

Speaking at the United Nations Sustainable Development Summit on Saturday, Mr. Xi said that China will aim to increase the initial gift to $12 billion over the next 15 years, while also forgiving some countries’ loan debts, to support the UN’s new set of development goals. Among the most ambitious of the list’s 17 goals is to eliminate extreme poverty, defined as living on less than $1.25 a day, by 2030.

Announcing the gift, Xi pointed to his own country’s successes: China’s aggressive economic growth raised its citizens’ per capita income fivefold between 2000 and 2010. That progress made up over 75 percent of the world’s poverty reduction in the 1990s and early 2000s, according to the Guardian’s Elizabeth Stuart, and is responsible for the UN achieving its previous millennium development goal of cutting extreme poverty in half.

Douglas H. Paal, the vice president of the Carnegie Endowment for International Peace, told the New York Times that Xi’s gift “reflects an acceptance of China’s increasing global responsibility.”

Over the past few years, China’s most visible bids for global influence have been military, as it ramps up efforts to control contested water and islands in the South China Sea – military muscle it showed off in a massive parade of over 12,000 troops earlier this month.

Behind the scenes, however, China has quickly struck up development partnerships with some of the world’s least developed, or most troubled, countries: today, renminbi account for 30 percent of all foreign investment in Syria, a whopping 82 percent in Zimbabwe, and even 20 percent in debt-stricken Greece. 

As a New York Times investigation discovered this summer, “China is going where the West is reluctant to tread, either for financial or political reasons — or both,” creating lucrative development deals with nations unlikely, or unwilling, to receive similar assistance from standard sources such as the I.M.F. or the World Bank: lenders whose deals come with conditions, but also, perhaps, more transparency.

In Ecuador, for instance, where China stepped in with an $11 billion loan, it has helped finance a slew of energy projects, from dams to mining. In return, the South American nation of 16 million is required to cede control of some natural resources, such as almost 90 percent of its oil exports, and contract with Chinese construction companies, in addition to paying off the loans’ interest, according to Clifford Krauss and Keith Bradsher’s report.

For some, China’s increased development work is a welcome sign of international cooperation. Xi promised the UN on Saturday that China was ready to put “justice before interests,” and wanted to encourage global “South-South cooperation,” according to the English-language China Daily. After the Times released its investigation, which summed up, “Such deals typically favor the Chinese,” reader Abel Figueroa responded,

China has conquered geopolitcally through the market and/or economy, selling cheaper products to eat, wear, shoes, technology, etc. On the contrary, the United States and its allies proceed with wars, pillage, colonizations, without making anything cheaper.

Others worry, however, that harmful side effects of China’s rapid industrialization will also make their way into countries receiving Chinese aid. China’s mining industry remains one of the world’s most dangerous, despite recent progress, and a 2015 study from the University of California, Berkeley, estimates that 4,000 Chinese citizens die each day because of its notorious air pollution. 

Up to 200 million Chinese still fall under the global poverty line, particularly in rural areas, but most have benefitted economically from the country’s rapid ascent into middle-class lifestyles. But according to Gallup polls, Chinese rate their quality of life as having shifted little over the past decade.

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