The governance of China's foreign aid system: Evolution and path dependence

Published date01 October 2019
Date01 October 2019
AuthorJianzhi Zhao,Yijia Jing
The governance of China's foreign aid system: Evolution and
path dependence
Jianzhi Zhao |Yijia Jing
Fudan University, Shanghai, China
Yijia Jing, School of International Relations and
Public Affairs, Fudan University, Handan Road
220 Yangpu, Shanghai 200433, China.
As China become a major donor in international development, there is an urgent need
to improve its capacity to govern its aid policy and management system. This study
provides a comprehensive review of China's aid governance system and its evolution
along the time, showing its changes and nonchanges. Path dependence effects are
used to explain such evolution and are further illustrated by the consistent central
role of the Ministry of Commerce in the aid system and by the centralprovincial
arrangement of development finance. Further, by exploiting limited yet novel evi-
dence of the newly established State International Development Cooperation Agency,
we argue that path dependence effects make it difficult to achieve the goal to com-
prehensively restructure the aid governance system by establishing State Interna-
tional Development Cooperation Agency. The study offers a useful perspective to
understand the functioning and future evolution of China's aid governance system.
China, foreign aid, governing system, path dependence
International development since the WWII has mostly taken the form
of Official Development Aid (ODA) provided by developed countries
to developing countries.
The global economic foundation of such
ODA practices has experienced gradual changes due to the shifting
economic gravity to emerging economies. Noticeably, the landscape
of international development has seen increasingly active roles of
emerging economies in providing new development assistance with
new norms, rules, and purposes (Jing, Mendez, & Zheng, 2019). Among
these emerging donors, China has been providing most sizeable for-
eign aid (Woods, 2008). According to China's official data that are
widely believed to be underestimated, Chinese foreign aid was RMB
89.34 billion (USD 12.8 billion) between 2010 and 2012, which was
RMB 250.63 billion between 1994 and 2009.
Dreher, Fuchs, Parks,
Strange, and Tierney (2017) from AidData estimate more than USD
$350 billion including official aid and aidlike financial flow from China
between 2000 and 2014. Expecting increasing outflow of foreign aid,
China has been streamlining its aid management system, represented
by the recent move to build the State International Development
Cooperation Agency (SIDCA).
Current research on China's development assistance system shows
three major strands. The first strand consists of research that measures
and estimates China's actual development assistance (Dreher et al.,
2017; Kitano, 2014; Kitano & Harada, 2016; Strange, Dreher, Fuchs,
Parks, & Tierney, 2017; UNDP, 2015; Wolf, Wang, & Warner,
The second strand of research investigates the impacts of Chi-
nese aid on recipient countries, focusing particularly on difference to
traditional donor (Bräutigam, 2015; Brazys, Elkink, & Kelly, 2017;
Breslin, 2013; Diamond, 2008; Dollar, 2016; Foster, Butterfield, &
Chen, 2009; Isaksson & Kotsadam, 2018; Lancaster, 2007; Naim,
2007; Reilly, 2012). The third strand of research to which this study
Official development assistance (ODA) is defined by the Development Assistance Committee
(DAC) of the OECD. See its webpage at, accessed on
June 6, 2019.
The data is from the 2014 White Paper on China's Foreign Aid, accessed at
cn/zhengce/201407/10/content_2715467.htm, 6 June, 2019.
AidData created a specialized catalogue on Chinese official finance named Global Chinese
Official Finance, accessed at, June 3, 2018.
Received: 14 July 2018 Revised: 24 July 2019 Accepted: 4 October 2019
DOI: 10.1002/pad.1870
182 © 2019 John Wiley & Sons, Ltd. Public Admin Dev. 2019;

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