No.78 Estimating China's Foreign Aid 2001-2013

This paper aims to estimate China’s net foreign aid from 2001 to 2013 as compared to net ODA figures which OECD DAC usually uses. First, a practical definition to capture China’s foreign aid activities as a proxy for China’s ODA was proposed. It consists of grants and interest-free loans (treated as grants), concessional loans as bilateral aid, and contributions to international development agencies as multilateral aid. Second, both net and gross disbursements of China’s foreign aid were estimated. The results showed that China’s net foreign aid has grown rapidly since 2004 and reached US$ 7.1 billion in 2013. The share of bilateral aid is much larger than that of multilateral aid. The difference between net and gross foreign aid is still small due to the fact that the repayment of concessional loans is still relatively limited. For reference, net disbursement of preferential export buyer’s credits, which some recipient countries treat as ODA loans, was estimated to have been US$ 7.0 billion in 2013. Third, the results were compared with DAC members’ ODA; China’s rank has moved up from 16th in 2001 to 6th in 2012 and 2013. China’s bilateral aid has approached that of France, while its multilateral aid has been estimated to be relatively small. China’s foreign aid is expected to increase rapidly and catch up with some of top five DAC members in the foreseeable future.

Keywords: China, foreign aid, ODA, concessional loans, OECD DAC