China's International Aid Policy and its Implications for Global Governance

The purpose of this paper is to describe and analyze the policies of China in the fields of development aid and their implications for global governance. The paper takes a comprehensive perspective on the various facets of such policies from the institutional arrangement, to key features of China's aid policies in the different stages of China's domestic reform and in the relations with recipient countries from different regions. A comparative perspective is undertaken, both vertically, through time, to have a good understanding of the evolution of China's strategies and practices in the development aid, and horizontally, with respect to the reflections among traditional donors at the international level. The paper starts with an analysis of domestic political economy of China's foreign aid policy with an emphasis of institutional arrangement and role of State Owned Enterprises (SOEs). It will then examine some new trends of international development policies of traditional donors and compare them with China's strategies and practices. The authors then draw some key features of China's aid policy by looking into its practices in three different regions (Africa, Asia and Latin America). The paper concludes with a summary and analysis of implications of China's foreign aid policy for global governance on international development.