Thursday, September 11, 2014

MOFCOM issues the draft "Measures for the Administration of Foreign Aid"

On April 18 2014, Ministry of Commerce (MOFCOM) of the People's Republic of China released on its webpage the "Measures for the Administration of Foreign Aid (Draft)" (对外援助管理办法(草案)).

Consisting of 51 articles, the Measures are the first comprehensive legal document with the character of a law to regulate Chinese government's foreign aid. Interestingly, following a practice already applied in preparation to the last Five Year Plan, MOFCOM was seeking comments and suggestions from the Chinese public. A reason for this might be the report by the Central Inspection Group (中央巡视组) which earlier this year stated that there is a big potential for corruption in China's foreign aid system, and violations among Chinese companies which implement Chinese aid are severe.

The Measures include provisions on aid policy planning, aid funds, aid modes, forms of aid projects, initiation, implementation and management of aid projects, management of foreign aid personnel and legal responsibilities. They do not cover humanitarian emergency relief and military aid.
For those following the transparency of Chinese development finance flows, Article 8 might be of special interest: it stipulates that MOFCOM shall set up a foreign aid statistics system ( 商务部建立中国政府对外援助统计制度,收集、汇总和编制对外援助统计资料).

There is also a new emphasis on impact and aid effectiveness (Chapter 6). This is something that hasn't been present in such an explicit way in previous aid-related legal documents like the two White Papers (2011 and 2014) or implementation guidelines for specific kinds of projects. Before initiating new projects, MOFCOM shall conduct feasibility studies and assess policy conformity, technical feasibility and the use of funds. This might hint to a learning process within the Chinese aid system and a silent rapprochement to some of the OECD DAC aid standards.

It remains clear, however, that the "Eight Principles of Foreign Aid" (1963) and the "Five Principles of Peaceful Coexistence" (1954) are still valid, especially when it comes to aspect which is criticized in the Western development discourse on China: the mutual non-interference on domestic affairs (Article 5) ( 互不干涉内政 ).

The Measures, at least for the moment, give end to the speculations on whether the Chinese government might transfer foreign aid to the Ministry of Foreign Affairs or create a specialized aid ministry or aid agency: according to Article 6,

MOFCOM is the designated body to implement foreign aid on behalf of the Chinese government. When the number provided on BBC Chinese Edition website are true, this is not surprising: 82% (21,1 Mrd. RMB) of MOFCOM's overall budget for 2014 (25,7 Mrd. RMB) are funds allocated for foreign aid. In a way, citing Chinese netizens, one could say that MOFCOM has already become the Aid Ministry.

So far, it is not clear whether the Measures are already effective and there is a possibility that their might be still some changes after the autumn party congress.

If you're interested in the detailed text, enjoy the translation I did for my research. Feel free to use and quote it for your work - but I would appreciate it if you would cite where it came from.
(And, also, if you have any suggestions for a better translation, please don't hesitate to write me).

This post first appeared on the China Aid Blog, Marina Rudyak’s exciting new blog that looks at China's internal debates on foreign aid.

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