Beyond the Debates of Which is Best: Investigating the Complementarity of Chinese and Western Aid, and Possible Lessons from China’s Development

Abstract

This paper will argue that contrary to popular opinion, Chinese engagement in the developing world is not too different from traditional donor engagement. In fact, the composition of similarities and differences among China and the broad variety of traditional donors indicate that it should be seen as complementary. In order to justify this view, an ideological categorization of foreign aid determinants is employed to analyze China's foreign aid program since the 1950s; finding that Chinese foreign aid since 1978 falls broadly within the category of liberal internationalism. The preferred modalities of Chinese aid are presented, contextualized by China's own developmental experience, its experience as a donor, and its own developmental needs. The complementarity with traditional donor modalities is assessed. Finally, lessons from China's own development will be presented and their transferability assessed. This paper will conclude that while China's aid is not too dissimilar from traditional donor aid, and areas of complementarity do exist; the most important lesson from China is that a country leadership committed to socio-economic development, employing policy design mechanisms that identify instruments most suited to local socio-economic and political conditions, is most conducive to socio-economic development.