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Is Foreign Aid Flow a Political 'Competitive Tool' for US and China?

© REUTERS / Jason LeeUS 100 dollar banknotes and Chinese 100 yuan banknotes are seen in this picture illustration in Beijing, China, January 21, 2016.
US 100 dollar banknotes and Chinese 100 yuan banknotes are seen in this picture illustration in Beijing, China, January 21, 2016. - Sputnik International
A recent report revealed that 'in just a few decades, China has gone from aid recipient to net aid donor and one of the most important foreign policy players in the world', which is set to soon outmatch the US. Mei Xinyu, Chinese researcher in international trade has told Sputnik that the findings reveal foreign aid is a political tool.

China is now a rival to traditional Western donors and lenders, the US, the World Bank and the Development Co-operation Directorate (DCD-DAC). Beijing is poised to overtake the US in foreign aid flow in much of the developing world, including Africa, the Middle East, Asia and the Pacific, Latin America and the Caribbean, and Central and Eastern Europe, a group of researchers at AidData research lab of the US-based William & Mary public research university concluded in their paper.

The authors however pointed out that "while Beijing’s broad ambitions are well known, the details of China’s development activities are not. China has remained a non-transparent funder of overseas projects, creating an informational black hole for those trying to understand where and on what it is spending its money."

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Commenting on the conclusions of the researchers, Mei Xinyu, an associate researcher at the Chinese Academy of International Trade and Economic Cooperation at China’s Ministry of Commerce told Sputnik China that the tonality and the conclusions of the report reveal its ideological bias.

According to the expert, the report reviews foreign aid as a political tool in that the world’s powers use to compete with each other. Foreign aid is mutually profitable both to the donors and to the recipients. Moreover, it has a positive influence on the development of the international community.

AidData’s authors said that they have analyzed China's foreign aid flows from 2000 to 2014, with "more than 4,300 projects in 140 countries and territories."

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"Although both countries have overseas project portfolios roughly similar in scale and scope ($394.6 billion in US aid and $354.3 billion in Chinese aid over the same period), they move these resources through very different financial channels. 93% of US spending during this period was in the form of official development assistance — the strict definition of aid, also known as “ODA.” China, by contrast, provided less than a quarter (23%) of its financial support via ODA," they said.

Mei Xinyu, however, questioned the released statistics, especially with regards to China, doubting that the researchers have used equal statistic criteria.

The expert also pointed out that the report concludes that a large portion of China's foreign assistance goes towards development projects, which is a significant trend that Beijing is likely to follow.

He further expressed hope that thy US won't turn foreign aid flows into a type of “competitive tool” for large powers, preferring to invest in the economic development of other countries and not simply providing military assistance, arms and weaponry.

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