2016 Book ChinaSForeignAidAndInvestment3

China’s Foreign Aid and Investment
Diplomacy, Volume III

China’s Foreign Aid and
Investment Diplomacy,
Volume III
Strategy Beyond Asia and
Challenges to the United States
and the International Order
John F. Copper
CHINA’S FOREIGN AID AND INVESTMENT DIPLOMACY, VOLUME III
Copyright © John F. Copper 2016
Softcover reprint of the hardcover 1st edition 2016 978-1-137-55183-2
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Library of Congress Cataloging-in-Publication Data
Names: Copper, John Franklin.
Title: China’s foreign aid and investment diplomacy / John F. Copper.
Description: New York City : Palgrave Macmillan, 2015– | Includes
bibliographical references and index.
Identiﬁers: LCCN 2015020279| ISBN 9781137551818 (v. 1 : hardback) |
ISBN 9781137551825 (v. 2 : hardback)
(v. 3 : hardback)
Subjects: LCSH: Economic assistance, Chinese—Developing countries. |
Investments, Chinese—Developing countries. | BISAC: POLITICAL
SCIENCE / History & Theory. | POLITICAL SCIENCE / International
Relations / General. | POLITICAL SCIENCE / International Relations /
Diplomacy. | POLITICAL SCIENCE / Public Policy / Economic Policy. |
POLITICAL SCIENCE / Government / General.
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record available at http://lccn.loc.gov/2015020279
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To my beloved son Royce Wellington Copper,
to whom I entrust the future
Contents
Preface ix
Preface to Volume III xi
Chapter 1 China’s Foreign Aid and Investment Diplomacy to

African Nations—I 1
Chapter 2 China’s Foreign Aid and Investment Diplomacy to
African Nations—II 43
Chapter 3 China’s Foreign Aid and Investment Diplomacy in
Other Regions—Europe, the Middle East,
Latin America, and Oceania 91
Chapter 4 Summary and Conclusions 143
Notes 207
Selected Bibliography for Volume III 281
Index 295
Preface
T
he People’s Republic of China began giving foreign aid as soon as
its government was established in 1949. China helped finance two
wars. They were the wars that had the greatest impact of any in the
post–World War II period: the Korean War and the Vietnam War. China
also financed wars of national liberation in a host of Third World countries.
Meanwhile foreign aid helped Beijing negotiate establishing diplomatic ties
with a number of developing countries and win support for important tenets
of its foreign policy.
To some, China became a model for aid giving: a poor country that gener-
ously helped other poor countries and a country that gave assistance expedi-
tiously, efficiently, and without conditions. Some observers said that China
made it necessary to reexamine the meaning of the term “foreign aid.”
In the 1970s and 1980s, notwithstanding impressive successes in its for-
eign aid diplomacy, Chinese leaders noted that China’s aid program had
experienced serious setbacks; more important, they felt China needed capital
for its own economic development. China thus became a major recipient of
financial aid from international lending institutions while it attracted large
amounts of investment money from Western countries and from Overseas
Chinese. Giving foreign assistance in this context did not make much sense
and China drastically reduced its aid giving.
But China’s economy soon boomed, and in the 1990s after it began to
accumulate large stores of foreign exchange, Chinese leaders resurrected
China’s foreign aid giving and increased it several fold calling much of it for-
eign investments. Investments served many of the same purposes as aid and
sounded better. In any event, China “transferred” large amounts of its newly
acquired foreign exchange to poor countries. This provided succor for their
development. It also expanded China’s external influence. Not by accident
China’s external financial help became a major factor in its global rise.
x ● Preface
Providing aid and investment funds to developing or Third World coun-

tries, China also hoped to realize strategic military objectives, acquire energy
and natural resources to fuel its continued rapid economic boom, and, like
capitalist nations before it, find or expand markets for its goods to keep its
workers employed. It succeeded in all of these objectives. Meanwhile Beijing
improved its global image and its global influence.
China’s aid and investments also created a backlash. From the beginning
China’s policies shaping its aid and investments to poor nations differed
from the norms. In the name of not interfering in the domestic affairs of
other countries while extending financial help to developing countries,
China virtually disregarded local governance; it did not pursue democratic
aims, and Beijing did not generally take human rights conditions into
account. Moreover, China paid less attention to environmental standards
than Western countries. Some countries, especially the United States and in
Europe, did not like these policies. Developing countries’ leaders, however,
approved of China’s mode of providing financial help while observers noted
that China greatly improved economic conditions in recipient countries.
In any case, China’s aid and investments presented a serious challenge to the
West and to some international financial organizations.
In the last decade, while fast increasing the level of its aid and invest-
ments, China has suddenly become a big player in helping Third World
countries, often surpassing Western countries’ aid and investments and
frequently eclipsing the financial help extended by international aid-giving
organizations. As a result China presented an existential aid and investment
threat.
This study will not focus as much as most analysts on the economic
aspects of China’s foreign aid. Nor will it examine in any depth the deci-
sion process in China that involves extending foreign aid or making foreign
investment decisions. Rather the author’s primary goal is to assess aid and
investments as tools of China’s foreign policy, its successes and failures, and
its political impact as China seeks world power status.
The author wishes to thank the Smith-Richardson Foundation for financial
support to work on this book.
John F. Copper
Preface to Volume III
T
his volume of China’s Foreign Aid and Investment Diplomacy includes
two chapters on African countries; one chapter covers the early
period or the years up to 1980 and the other the years since then.
Both the nature of the aid and China’s motives for giving foreign assistance
to African countries differed markedly from those offered to Asian coun-
tries. Also China had almost ceased providing financial assistance to African
countries in the late 1970s. Beijing subsequently restored its financial help to
countries on the continent in a big way, which has attracted more attention
than its activities elsewhere. Finally, China has given vast financial help to
African countries through regional organizations.
Another chapter analyzes China’s aid and investments to countries in
areas not covered in the “regional” chapters: Europe, the Middle East, Latin
America, and Oceania. In some cases the amounts were large and their
impact very significant. Most of China’s financial help to these countries
consisted of investments; but many of these investments differed little if
any from foreign aid. China’s assistance in this category of recipients varied
more in terms of amounts, risks, and purposes than its help to nations in the
“core” regions. China’s help also appears in certain ways to be more generous
and more ambitious.
In the concluding chapter, chapter 4, the author argues that China’s
financial assistance to developing countries is currently one of the most
salient events or trends in international politics. China helped Third World
countries grow economically. China’s aid and investments have been a boon
to relieving global poverty and advancing the cause of globalism. China
has linked its economy to the rest of the world, providing China the key to
expanding its status as a world power while forcing many to accept a redefi-
nition of the terms “foreign aid” and “foreign investments.”
Meanwhile China’s huge quantities of aid and investments have made it a
challenge to the United States, Europe, and Japan. Beijing has proven to be
xii ● Preface to Volume III
a formidable competitor in these realms. Many nations now rely on China.

China is currently seen as a large-cum-dominant player in global economic
relations. Its financial help to other countries may prove to be its means to
become the world’s foremost power—as it was in the past. Chinese leaders
prefer economic, including foreign and and investment, tools of diplomacy
to military power.
John F. Copper
CHAPTER 1

Diplomacy to African Nations—I
Introduction
Africa cannot be divided neatly or logically into regions as Asia can be.
Furthermore, given the fact that China has extended foreign assistance to
more countries in Africa than in any of the other geographic regions assessed
in this book and that it nearly stopped its aid to countries on the continent
in the late 1970s, plus the fact that its financial help to Africa differs so
greatly between the two periods, this chapter will cover only China’s aid to
African countries during phase one, or the early years. China’s foreign aid
to African countries from 1980 to the present, or period two, will be the
assessed in the next chapter.
China had few historical connections with Africa. Some early Chinese
explorers made their way to Africa and there was some trade. But there was
little contact in modern times. When Mao came to power, most of Africa
was controlled by Western countries. Thus China’s foreign aid giving to
African countries during period one, with but a few exceptions, came later
than its foreign assistance given to Northeast and Southeast Asian nations
as well as to countries in South Asia and the Middle East. China’s aid giving
started in West Africa and moved to East Africa.
China’s motives for giving aid to Africa were different from its motives
in other regions of the world. Bloc solidarity was not a real concern; instead
China more frequently sought diplomatic ties and support for its views
on socialism, colonialism, and imperialism. African countries generally
appreciated China’s foreign aid; China afforded an alternative to Western
help. China had no record of colonialism on the continent. Also, the West
2 ● China’s Foreign Aid and Investment Diplomacy, Volume III
attached conditions to its aid whereas China’s terms for giving foreign aid
were minimal.
When Chinese leaders decided to expand China’s diplomatic contacts
and subsequently to make a bid to join the United Nations, they looked
for the support of the African nations. China also sought to undermine
Taiwan’s legitimacy by winning diplomatic ties. Most African nations
viewed supporting China as a “cause” to pursue. But China’s foreign assis-
tance very much helped Beijing win friends and attain these diplomatic
objectives.
Overall China experienced some important successes as well as some seri-
ous setbacks in its aid efforts in Africa. For Chinese leaders it was a learning
process. In fact, China formulated its aid policies in large measure based
on its experience in Africa. Zhou Enlai’s trip to several African nations in
1963–64 led to China issuing principles on its foreign aid giving that are
still cited today.
China’s arms aid supported friendly regimes and/or local wars, or, as
China called them, “wars of national liberation.” Initially the West was
Beijing’s target. China aimed its aid at reducing US and European influence.
Then it was the Soviet Union. As Sino-Soviet differences escalated, China
argued that the Soviet Union was not a Third World country and did not
understand the problems faced by African nations. Also it was a (social)
imperialist country. Later, Chinese leaders spoke of China as a developing
country rather than a Communist Bloc nation and its aid as “South-South”
aid. Beijing sought leadership of Third World nations and found African
countries supportive.
In the mid-1960s, to demonstrate both its seriousness in giving aid and its
sincerity toward Africa, China undertook its biggest aid project anywhere—
the Tan-Zam Railroad. The line started in Tanzania’s port city of Dar es
Salaam and extended into Zambia’s heartland. Both Western countries and
several international organizations had rejected this project. In undertaking
it China proved its commitment to Africa. The railroad had both political
and economic effects: it freed Zambia from having to transport its exports
through apartheid South Africa and helped both Zambia and Tanzania
commercially.
This was an exception to China’s foreign aid policies as China’s aid to
African countries was mainly given in the form of small projects, which
China knew could be completed easily and quickly. Yet almost all of its aid
projects gave China a chance to use its own engineers and workers while it
afforded Beijing a presence in many recipient countries. They also demon-
strated the efficiency and generosity of China’s aid giving while enhancing
its global image.
Aid and Investment Diplomacy to African Nations—I ● 3
Assistance in Late 1950s and Early 1960s

When China first considered extending foreign aid to African countries, its
view of the continent was conditioned by Mao’s view of the world and his
personal influence over foreign policy making. In the 1940s, Mao predicted
that the success of his Communist movement would serve as a positive exam-
ple that leaders in other parts of the world, including Africa, would follow.1
After assuming power in 1949, Mao proclaimed that the budding indepen-
dence movements in Africa duplicated Chinese history of 30–60 years prior.
He also proclaimed that China had a duty to explain this to Africans and
help them in their revolutionary struggles.2 China, he said, understood the
desire of these nations to deal with a non-Western country after having been
subjected to the humiliation of colonialism and imperialism.
The African countries to which China first offered assistance were newly
independent, anti-imperialist, and anticolonial; they were countries that
Mao thought might serve as a vanguard for change in the rest of the conti-
nent. These countries were Guinea, Ghana, Mali, and the Republic of the
Congo. China’s aid relationship with these four countries is instructive in
terms of China’s foreign policy and its foreign aid giving in Africa in the late
1950s and 60s.3
Guinea was the first beneficiary of China’s foreign aid. In late 1958, it
became independent and relations with its former mother country, France,
were strained. China forthwith sent rice-growing experts to Guinea and
soon after promised a gift of 5,000 tons of rice. China then extended a loan
worth $500,000.4 This aid was timed to celebrate Guinea’s independence.
The aid also mirrored two special Chinese goals in sub-Saharan Africa:
winning diplomatic ties and supporting wars of national liberation. Beijing
had recently secured diplomatic recognition from important North African
Islamic countries (Egypt, Morocco, and Sudan) and hoped to establish ties
with sub-Saharan African countries. China at the time was supporting an
anticolonial, revolutionary movement in Algeria. Beijing espoused great
hopes for facilitating more revolutionary activities in Africa.5 China may
have even hoped to establish a beachhead in West Africa.6
In 1960, China first pledged what can be labeled as significant official
aid to Guinea in the form of a $25 million loan. The loan was without inter-
est and repayment was not to begin until 1970; plus it had a grace period. It
was one of China’s most generous loans in terms of its grant factor.7 Shortly
after China provided Guinea a gift of 10,000 tons of rice.8 China gave
this aid in conjunction with concluding its first treaty of friendship with a
black African country. The timing of the aid was revealing in another way:
President Sekou Toure had just expelled French diplomats and after this
French aid stopped.9 Finally, China wanted to convey the message that it
wanted to help poor countries: Guinea was poor and even faced food short-
ages at that time.10
In addition, Chinese leaders likely saw in Guinea an opportunity to
undermine Soviet influence in view of allegations by Guinean officials then
that Moscow had been involved in a plot to overthrow the government.11
As noted in previous chapters, Mao and other Chinese leaders felt the
sting of the Soviet Union severing its aid to China in 1960 and so sought
revenge. Soviet aid personnel left Guinea shortly after China’s official aid
was granted.12 To mark the occasion Chinese officials declared that Soviet
aid was “imperialist aid.” To underscore this point China’s aid agreement
with Guinea specified that its aid workers would enjoy a standard of living
“not exceeding” those of local personnel of the same rank, which was not the
case with Soviet, US, or other countries’ aid personnel there. China’s policy
was duly noted in Guinea and elsewhere. Mao may also have wanted to show
the Chinese people that his foreign policy was working; aid giving diverted
attention from economic travails at home caused by his Great Leap Forward.
When President Toure visited Beijing shortly after this, the first African
leader to do so, the government arranged for 200,000 people to gather in
Tiananmen Square to give him a “hero’s welcome.”13
China’s aid to Guinea may have been a test case in another respect. At that
time the United States granted new aid to Guinea.14 Presumably for this
reason, China was slow in delivering its aid; by 1964 only two of the nine
projects promised four years earlier were finished—worth but $3 million.15
It was later learned that China offered aid to Guinea contingent upon it
breaking diplomatic relations with the United States.16 That did not happen.
However, relations remained good with China and when Zhou Enlai made
his highly publicized trip to Africa in late 1963 and early 1964 Guinea was
one of the countries he visited.17
China subsequently made good on its promises and the next year one-
fourth of the aid China had promised Guinea had been drawn.18 Further
demonstrating its commitment, China delivered aid in spite of worsening
economic hardships at home. China had several specific motives in mind:
It sought Guinea’s support for its nuclear test in 1964 and the Afro-Asian
conference in 1965, as well as for Guinea’s continued cooperation with
China in sending weapons to the Congo.19
Soon Guinea’s relations with the West deteriorated and China delivered
even more of its aid. A hydroelectric station was opened in 1967. Chinese aid
funds were also disbursed for constructing a cinema building, an oil-pressing
works, a bamboo-processing center, and a number of other small projects.20
Making an exception to its policy of eschewing show projects, China built
two prestige projects: a “freedom cinema” and a 2,000 seat “people’s palace
and conference hall.” These two projects and the others mentioned above
brought an estimated 3,000 Chinese workers to Guinea.21 Meanwhile it was
reported China had given Guinea arms aid; some of it the government kept
and some it was funneled to nearby Ghana at China’s request.22
China’s leaders were so confident in their foreign aid diplomacy they
opened talks with the government of Guinea to build a big aid project: a major
railroad line that would extend into Mali. In fact, survey work was started.
However, the government of Mali was overthrown in a coup and relations
between the two countries deteriorated, and the project was cancelled.23 As a
result relations between China and Guinea were adversely affected.
In 1969, cordial relations were reestablished with Guinea, and China
extended another aid pledge, this one to help Guinea cope with its bal-
ance of payments problem.24 The aid was said to amount to $45 million,
though few other details were provided.25 Part of the funds, or there was
another aid offer, were reportedly allocated for railway and port repairs,
agriculture, a sugar mill, and a cement factory.26 Work on these projects was
observed soon after this. In early 1970, the two countries signed an agree-
ment whereby China would provide medical workers. Another agreement
signed at the time mentioned technical aid.27
In 1972, an arrangement was reached on “financial credits,” though no
details were made available.28 Later the Chinese press mentioned that the
“transaction” was worth $30 million.29 China also promised Guinea four
gunboats, which it delivered the following year.30 In 1973, a farm-tool plant
undertaken with Chinese aid funds was finished along with some other
smaller projects.31 In 1974, China provided a cash donation to Guinea worth
$1 million.32 In the ensuing years, there was evidence of most of China’s aid
being used.33 Nevertheless, at this time China stopped supporting countries
with aid simply because they were socialist and also shifted the focus of its
attention, and most of its aid, to East Africa, reflecting its new geopolitical
and other objectives. Thus China’s interest in Guinea faded.
Like Guinea, Ghana was one of the first African colonies to gain inde-
pendence; it accomplished that in the year 1957. In 1960 diplomatic rela-
tions were established with China. As with Guinea, China saw Ghana as a
nation with whom it could win support on a variety of foreign policy issues.
Chinese leaders also viewed Ghana as a “revolutionary state” or a radical,
socialist-inclined country and its leader, Kwame Nkrumah, as someone who
might have influence over other countries in the region. Chinese leaders
perhaps thought China could even challenge Soviet and US aid giving.34
Finally, China sought a new place from where it could influence events in
the Congo.35
China extended foreign aid to Ghana in the form of a non-interest-bearing

loan for $19.5 million in 1961 repayable between 1971 and 1981. The loan
was designated for the purchase of equipment and technical training and
to pay for Chinese experts.36 Chinese aid projects, including fisheries,
handicraft factories, a pencil factory, rice paddies, and one or two indus-
trial projects were soon seen in country, indicating that the aid was being
delivered.37
Chinese leaders may have had another interest in Ghana beyond estab-
lishing a foothold in sub-Saharan Africa: Ghana was one of the six par-
ticipants in the Colombo Conference that was established to mediate
differences between China and India over their disputed border.38 In addi-
tion to pursuing this and various other foreign policy objectives, Beijing may
have perceived that foreign aid would increase China’s trade with Ghana.39
It succeeded to some degree: China sold textiles, chemicals, machines, and
other products and bought cocoa, industrial diamonds, manganese, and
timber.40
In fact, China’s foreign aid diplomacy vis-à-vis Ghana seemed was quite
successful. Thus Zhou Enlai visited Ghana on his “African safari” in late
1963 and early 1964 and it was there that he announced the Eight Principles
for China’s Aid to Foreign Countries.41
In 1964, China extended another non-interest loan to Ghana for
$22.5 million reportedly to help the government finance its first Seven
Year Plan.42 This loan, or another that was not announced, was earmarked
for arms as China sent military experts to Ghana at this time to conduct
guerrilla-training programs in support of China’s efforts to foment wars
of national liberation in Africa.43 Ghanaians were also sent to China for
guerrilla-fighting training.44 After this China opened an office for Xinhua
News Agency and held several exhibitions.45 This gave China a greater pres-
ence in Ghana. Finally, China may have been motivated in part to pro-
vide aid to Ghana to get its support for China’s nuclear test in 1964 and/
or its position on the second Afro-Asian Conference scheduled for 1965.46
However, China’s political and economic influence (trade did not increase
much at this time) was constrained by the fact the Soviet Union and Eastern
Europe gave aid to Ghana in larger amounts than China.47
In any event, when President Nkrumah visited China in 1966 his govern-
ment was overthrown. He subsequently sought exile in Guinea and tried to
organize a force to recapture power in Ghana. China offered him $1 million
in aid to do this.48 In response the new government of Ghana demanded
that China cut its diplomatic staff and recall several hundred Chinese tech-
nicians working in Ghana.49 China’s military training camps were closed
and diplomatic relations were severed a few months later.50
In 1972, China restored diplomatic ties with Ghana and soon Chinese
agriculture teams were in the country. Subsequently there was talk to the
effect that China may finance building a dam, though there were no offi-
cial statements to substantiate this.51 Given that Ghana relied heavily on
Western aid, it may have been merely a probe on China’s part. In any event
various other Chinese aid activities were observed. Still China’s assistance
was small compared to that it provided in the earlier years, and the focus of
China’s foreign policy in the meantime had shifted to other areas in Africa,
namely to Eastern Africa.52
Mali was another nation that China early on saw as a potential friend.
It won its independence in 1960 and immediately granted diplomatic rec-
ognition to Beijing. Chinese leaders viewed Mali as radical, opposed to the
Western international order, and leftist. Finally, Mali seemed to offer the
promise of helping China exert influence in the Congo and elsewhere in
Africa.53
In 1961, China made a pledge of foreign aid to the government of Mali
for $19.4 million in the form of a non-interest-bearing loan repayable within
20 years.54 The agreement was postdated suggesting that China expected
something from Mali before actually delivering the aid. There was also spec-
ulation that the aid might have been for arms.55 In any case, Chinese tech-
nicians were seen in Mali the next year working on agricultural projects.56
In early 1963, China made another pledge of aid, this time to help make
documentary movies. A few months later China promised help to build a
textile mill.57
China gave aid to Mali even though China’s economy was doing poorly,
seeing Mali as a left-leaning country, close to Guinea and Ghana, and where
the Soviet Union was active but its reputation was questionable. It is note-
worthy that, like Guinea, China’s aid was given at a time when some Soviet
aid projects had failed.58
China’s aid duly influenced the government of Mali to support China on
a number of foreign policy matters: Taiwan, the Nuclear Test Ban Treaty,
China’s nuclear test, and the second Afro-Asian conference. Mali’s leaders,
including President Modibo Keita, praised China’s aid, noting that Chinese
technicians adapted to local conditions and that China had refrained from
interfering in local politics. When Zhou Enlai visited Africa in 1963–64, he
visited Mali. In fact, the statement Zhou made on China’s aid principles was
incorporated into a joint statement at the end of his visit.59
In l964, it was reported that China had given Mali a free grant amount-
ing to $7.9 million.60 In 1965, China made an unspecified pledge worth
$3 million.61 This was likely intended to help the Mali government deal
with a financial crisis. By 1965 China had reportedly initiated 15 aid
projects in Mail, including a textile mill, a leather-processing factory, sports

stadiums, conference buildings, and an oil refinery. China also provided
arms aid.62 In 1968, Chinese financial help continued in the form of a
$5 million loan for the Guinea-Mali Railroad. It was reported that by the
end of the 1960s, China’s aid accounted for half of the industrial devel-
opment in Mali.63 But the impact of China’s aid diplomacy proved short
lived. President Kieta’s government fell shortly after this and his successors
criticized China and sought aid from the West. As a result China’s presence
in Mali diminished.64
However, China did not sever its aid or break other ties with Mali, sug-
gesting it could accept Mali dealing with the West so long as good relations
were not restored with the Soviet Union. In December 1970, China signed
an economic cooperation agreement with Mali. As part of the agreement
China extended another loan, this one worth an estimated $10 million.65
China subsequently built a rice mill, a sugar plantation, and an oil refinery
in Mali. Soon it was reported that China had disbursed most of $100 million
in total aid it had reportedly pledged (but had not announced) to Mali.66
In 1979, China signed a protocol with the government of Mali to build three
dams. It was also reported that China was building a radio transmitter and a
factory. Just months later it was reported that a dam was finished.67
In 1960, the Republic of the Congo, also known as Congo-Brazzaville
(its capital), became independent. However, it established diplomatic rela-
tions with Taiwan. In 1963 Congo’s first president fell from power and
M. Massamba-Debat became president; he moved the country to the left
and sought closer relations with socialist countries. In consequence early the
following year, China established diplomatic relations with the Republic of
the Congo.
Forthwith China offered Brazzaville an interest-free loan to the tune of
$5.6 million.68 The loan was called a development loan though budget aid
was also mentioned. A month later China gave the government $25,000 for
refugee relief and in October announced another interest-free loan to the
Republic of the Congo reportedly for $20 million.69
This aid seemed, in part, a reward for, or at least was connected to the
Republic of the Congo establishing diplomatic relations with Beijing.70
Chinese leaders may also have hoped to win Brazzaville’s support for its stance
on the upcoming Afro-Asian Conference.71 China’s main motive though
in giving this aid was to influence the war in the neighboring Democratic
Republic of the Congo or called Leopoldville (its capital). China viewed
the war as one of resistance to US and Belgian intervention and a conflict
that the Soviet Union seemed to neglect, or, some said, where it had sided
with the “imperialist” forces. Premier Patrice Lumumba had been murdered
and his government replaced by a pro-United States one. US pilots began

bombing rebel targets in the eastern party of the country, a situation China
labeled “America’s second Vietnam.”72 China sought to both undermine the
US presence while debunking the Soviet Union’s claims that it was a “revo-
lutionary force” in the region.
The Soviet Union at this time offered more aid to Brazzaville, proba-
bly prompting China to quickly deliver on its aid promised and to pledge
more assistance. In 1965, China held talks with leaders of the Republic of
the Congo on various economic subjects, ostensibly including arms and
Brazzaville serving as a base of operations for China.73 It was also reported
that China provided an interest-free loan at that time worth $23 million to
build a textile mill, a cotton farm, and a radio station.74 China was said to
have around 180 experts in the country working on aid projects.75 According
to the US Central Intelligence Agency, leaders in Brazzaville had come to
regard China as their major benefactor while leftists there favored China’s
model of revolution.76
In 1966, China’s aid personnel were working on the construction of a
radio station, probably financed using the aid funds pledged the previous
year. It was called the “Voice of the Congolese Revolution.” 77 The next
year, Chinese medical workers arrived giving China a larger presence in
the country.78 In 1968, Chinese aid workers began construction on a state
farm and a dock.79 It was also said at this time that China had delivered a
large shipment of arms to Angolan revolutionaries based in the Republic
of the Congo.80
China’s aid continued after the installation of a new president in the
Republic of the Congo in 1969—Marien Ngouabi. In fact, relations got
even better. That year a textile mill built with Chinese aid was finished and
an agreement was signed on constructing a shipyard to repair both civilian
and military vessels.81 In 1969, Ngouabi proclaimed that his was the first
“people’s republic” in Africa ruled by a Marxist-Leninist party.82 In 1970,
a security agreement was signed whereby China would provide equipment
to the Brazzaville’s armed forces.83 China also sent doctors and medical
teams.84
In 1972, China and the Republic of the Congo signed several agreements
that included military aid, but neither side released any details, though
Brazzaville mentioned getting a loan from China for $391,000.85 In mid-
1973, China pledged another loan to the Republic of the Congo, this one
worth an estimated $20 to $40 million.86 This aid made the Republic of
the Congo one of the top recipients of China’s aid on the African continent.
It also helped make its government pro-China and a supporter of China’s
foreign policy objectives, generally, and specifically its goals in Africa.
China’s Aid Shift to Eastern Africa

Following disappointments with its African policy and setbacks in its aid
efforts in West Africa at the hands of the United States and the Soviet Union,
China shifted the focus of its foreign assistance to Eastern Africa. This move
also reflected Beijing’s changed geopolitical perspectives; Chinese leaders
now saw East Africa as closer and more important to China due to its proxim-
ity to vital trade routes. China also sought an operational base from where
it could influence events in the area and to the south; East Africa provided
some advantages. Chinese leaders were also thinking of India as a growing
challenge in the area.
In the course of making this transition, China changed (or made an
exception to) a major tenet its aid policy of giving aid only in the form of
small projects that could be finished quickly: Beijing undertook a very large
project—the Tan-Zam Railroad. (Because of the size and importance of the
Tan-Zam Railroad project, it will be assessed separately in the next section
of this chapter.)
In 1961, Tanganyika became independent. China forthwith sent a Xinhua
representative to take up residence there and the next year dispatched its
talented ambassador He Ying to Dar es Salaam. China soon became friends
with Tanganyikan prime minister Julius Nyerere, who supported African
liberation movements, disliked the United States and the United Kingdom,
and supported Chinese foreign policy on a number of issues including the
Vietnam War.87
In early 1964, China pledged aid to Tanganyika and Zanzibar, two
countries that joined later that year to form a new nation, Tanzania—with
Nyerere its president. In February China promised Zanzibar $0.5 million in
the form of a grant to help the just-established government (following a coup)
to maintain stability.88 In May, China offered a grant to Tanganyika for
$10,000.89 Shortly after this Chinese engineers were seen in Zanzibar work-
ing on a road. In June, China extended a loan to Zanzibar for $14 million
for unspecified projects.90 Part of it was a gift; the rest was a non-interest-
bearing loan and a loan at 2.5 percent interest.91 All of this aid was likely
intended to improve relations with the recipients in anticipation of the uni-
fication of Tanganyika and Zanzibar.92
Chinese leaders saw the new nation of Tanzania as possibly offering
China hope of finding a friend it could keep and not be estranged from it
by US or Soviet aid offers, after its setbacks in Algeria, the Congo, and some
other countries in Western Africa. According to speculation at the time,
China’s aid to Tanzania may have also been connected to its developing
intercontinental ballistic missiles: for testing these missiles in the Indian
Ocean China needed tracking facilities.93
When the two countries merged, China extended a gift worth $3.8 million
and a loan for $42 million. The loan was interest free and repayable over a
period of 20 years.94 Mentioned in the aid agreement were a textile mill, agri-
cultural research projects, a broadcasting station, and an irrigation system.
Weapons and military training were also cited. In September, Chinese weap-
ons and advisors were seen in country.95 Some Chinese arms were reportedly
sent from Tanzania to the Congo. Meanwhile Tanzanian troops engaged in a
foray into Mozambique, said to be “encouraged” by Chinese advisors.96 This
proved to be another case of China supporting a war of national liberation.
By 1965, Chinese foreign aid efforts were quite visible in Tanzania.
And there was payoff. President Nyerere supported Beijing’s stance on the
upcoming Afro-Asian Conference and a “revolutionary United Nations.”97
This was the context in which, in June, China initiated talks with the gov-
ernments of Tanzania and Zambia on aid for a railroad project linking the
two countries (that later became the Tan-Zam Railroad).
Tanzania soon became the largest recipient of China’s aid in sub-Saharan
Africa; together with Algeria the two accounted for 60 percent of China’s aid
to the continent.98 Chinese leaders, it was said, hoped to establish a beach-
head in Tanzania. Clearly China was committed to providing enough finan-
cial assistance to cement close relations with President Nyerere. Moreover,
Beijing’s assistance signaled its determination to stay in Africa and be an
important player in giving foreign aid to African nations.
China’s aid to Tanzania was a huge success. Tanzania became an opera-
tional site for expanding China’s influence in the area and neither the United
States nor the Soviet Union could displace it. The Tanzanian government
took China’s position on almost all foreign policy issues important to China:
Taiwan, nuclear weapons, and more. Tanzania also became a hub for China
to help revolutionary groups operating in the Congo, Rwanda, Mozambique,
and Burundi. Tanzania hosted various groups and helped China provide
them with arms aid. China even built a powerful radio station in Tanzania
so that the revolutionary movements in the region could broadcast to their
supporters in their home countries.99
China’s considerable assistance to Tanzania also had a by-product: a
significant increase in trade between the two countries.100 Between 1964
and 1966, when China’s aid became very significant, trade between the two
countries increased more than tenfold.101 After this Chinese products were
quite visible in the markets in Tanzania; Western and Soviet goods were no
longer seen very much.
In June 1966, China delivered four patrol boats to Tanzania revealing
that arms aid was part of the mix of China’s foreign assistance. Shortly after
this China offered Tanzania a $2.8 million gift and a $5.6 million loan. At
almost this same time Beijing announced the establishment of the Sino-
Tanzanian Maritime Transport Joint-Stock Company and a $2.l million
loan to finance Tanzania’s share in the company.102 China also gave Tanzania
two 10,000-ton freighters.103 At this juncture China seemed to have estab-
lished a “definite presence” in East Africa.104
During the period 1967–70, the China-Tanzania Air Cargo Company,
launched with Chinese funding, was opened as were various other aid pro-
jects: a state farm, a radio broadcasting station, a shoe factory, another textile
mill, irrigation projects, and medical assistance. It was said that China had
contributed more aid projects and a bigger variety of them to Tanzania than
any other country in the world.105
President Nyerere heaped praise on China for its foreign assistance given
without strings attached, in contrast to Western countries that imposed
onerous conditions. He even cited China as a development model. Nyerere
reorganized the agricultural sector of Tanzania into collective farms and
on 13 occasions during this time visited China (most often getting prom-
ises of help), giving the impression to some that he was a “regular tribute
bearer.”106
In 1970, Tanzanian military representatives visited China; shortly after it
was reported that Chinese aid personnel were working on the construction
of a naval base in Tanzania.107 Just weeks later Chinese aid personnel were
observed building a military hospital. In 1971, China delivered two 100-ton
patrol boats, along with tanks and other military equipment to Tanzania.
Soon a Chinese mission of 300–400 was seen in the country providing mili-
tary training.108
China got another important but not too often mentioned benefit from
its aid to Tanzania: During the period from 1964 to 1971, when Tanzania
was receiving large donations of Chinese foreign aid, its delegate to the UN
was said to have “skillfully organized” votes in the General Assembly for
China’s admission.109 As a result Beijing acquired the China seat and, with
it, membership on the Security Council.
In 1972, the Tanzanian military announced that China was helping
build an air force base in the country and that it would be equipped with
at least one squadron of Chinese-built MiG fighters.110 The total value of
Chinese military aid to Tanzania at this time was put at between $150 and
200 million.111 This made Tanzania one of two largest beneficiaries (the
other being Pakistan) of China’s military aid outside of the Communist
Bloc. China’s arms aid helped Tanzania counter the presence of Portuguese
troops in neighboring Mozambique as well as Western and Western-trained
military forces in Rhodesia and South Africa not to mention Soviet military
aid to Somalia and Uganda.112
During 1973 China made numerous aid deliveries to Tanzania while

work proceeded apace on various projects pledged earlier. In March 1974,
China promised another interest-free loan worth $75 million for the devel-
opment of coal and iron ore mines.113 Meanwhile China provided funds to
build the Tan-Zam Railroad (discussed next), which became the highlight
of its foreign assistance to Tanzania and also Zambia, though other aid to
Tanzania continued to flow.114
China’s first foreign aid to Zambia was pledged in early 1964 in the form
of a $0.5 million grant, probably given to lay the groundwork for establish-
ing diplomatic relations and/or to influence Zambia’s vote on the upcoming
Afro-Asian Conference.115 Chinese officials had contacted Zambian’s leaders
before its independence to convey China’s desire for friendly relations and
were pleased with the response.116 Beijing granted diplomatic recognition
immediately upon Zambia’s formally gaining sovereignty in October 1964.
In 1967, at the height of the Cultural Revolution when China was in
chaos, Beijing announced a more meaningful aid pledge to Zambia—a
donation of $7 million in the form of a grant plus an interest-free loan for
$16.8 million.117 What the aid was to be used for was not specified. It may
have been given to help the Zambian government, which was facing budget-
ary problems at the time. Alternatively it was to be used for surveying and
other preparatory work on the Tan-Zam Railroad or was for a road and/or a
radio station.118 In any event, in 1969 Chinese aid workers began construc-
tion of a 254-mile road and radio stations.119 China at this time also helped
Zambia build bases to support revolutionary movements to the south.120
China was motivated in some part to give aid to Zambia because of the
conflict in Rhodesia. By opposing the government of Rhodesia, China
could build a reputation for supporting African nations’ independence and
the crusade against the white-ruled countries in Southern Africa. Chinese
leaders also viewed Zambia as strategically positioned: adjacent not only to
minority-ruled Rhodesia, but also to Portuguese-ruled Angola, apartheid
South Africa, and Tanzania (China’s new base of operations).121 Beijing
may have been thinking of Zambian copper as well; China did not have
adequate supplies of this important metal. Zambia also had cobalt, which
China needed.
China made Zambia’s president Kaunda a special friend. Although main-
taining a semblance of carrying on an independent foreign policy, President
Kaunda was very favorably disposed toward China. He supported China’s
hydrogen bomb test in 1967, saying China would play a major role in the
international arena.122 He called China an “all weather friend” because of
its aid.123 Kaunda played a significant role in opposing colonialism, impe-
rialism, and hegemonism (meaning US and Soviet influence) in Africa.
On the other hand, there was public criticism in Zambia of China’s “inferior
products,” while the Zambian government remained somewhat cautious of
getting too close to China inasmuch as it still needed Western aid.124
During the early 1970s, China’s aid workers were busy in Zambia. In 1972
it was reported that a road and a bridge over the Kafue River were completed
using Chinese foreign assistance.125 When tension escalated with Rhodesia
at that time, Zambia’s copper was shipped by road to Tanzania where a por-
tion of the Tan-Zam Railroad that had been finished transported it to the
port. This gained China’s aid program considerable good publicity.126 In July
1973, China extended a new loan to Zambia for $10 million. A few months
later, in February 1974, Beijing pledged another loan for $51 million to help
Zambia at a time of economic distress. It is unclear whether or not this aid
pledge was part of China’s commitment toward the Tan-Zam Railroad; the
two got mixed at this time.127 In any event, China gave Zambia much more
than this for its part in building the Tan-Zam Railroad as will be noted in
the next section of this chapter.
It is worthy of note that Zambian president Kaunda made several trips to
China and that the trip in 1974 was given especially broad coverage in the
Chinese media. Chinese officials even said that Mao formulated his “Three
Worlds theory” during Kaunda’s visit, implying that Kaunda made some
contribution to it.128 Kaunda said during this visit to Beijing that China is
a “model of development”—a statement that was picked up by the Chinese
media and repeated on a number of occasions later.129
China’s aid declined in the late 1970s as a result of Mao’s death, criti-
cism of China’s “overly generous” foreign aid, and the new Deng adminis-
tration’s focus on China’s own economic development using the capitalist
model. Also Zambia was seen in Beijing as (following the socialist model)
very inefficient in promoting economic growth and very corrupt.130 Still,
in 1978 China’s aid workers were busy constructing a “palace of the
people”—another of the exceptions to China’s rule not to build “fancy”
projects.131 Thus, while Chinese aid decreased, it still far outpaced aid given
by the Soviet Union and the Communist East European countries and
kept Moscow’s influence in Zambia to a minimum.132 From 1964, when
China first provided foreign aid to Zambia, to 1979, China’s economic help
amounted to $230 million, compared to the Soviet Union’s $15 million and
Eastern Europe’s $60 million.133
At this time Chinese aid personnel also laid the foundation for a textile
mill and were working on another road.134 More important, China contin-
ued to put money into the Tan-Zam Railroad, which helped Zambia both
economically and politically. In fact, the Tan-Zam Railroad constituted
China’s main aid project in Zambia.
The Tan-Zam Railroad

The Tanzania-Zambia (Tan-Zam) Railroad, also called the Great Uhuru
Railroad, project was the largest and the most expensive project China
undertook up to that time as well as throughout period one of its foreign
aid giving.135 For this and a variety of other reasons the project needs to
be assessed separately from China’s aid to the two countries in which it
was laid.
In 1967, China signed agreements with the governments of Tanzania
and Zambia committing to the project. China offered aid in the form of
a loan valued at somewhere between $340 and $400 million.136 Protocols
were signed in 1968. In 1970, work on the railroad started. At that time it
was announced that China had provided an interest free-loan for the project
to the tune of $405 million, $270 million to Tanzania and $135 million to
Zambia, to be repaid beginning in 1983 over a period of 30 years.137
The project constituted a truly landmark decision on China’s part. In
fact, some observers thought at the time it was a turning point for China’s
foreign aid policy in terms of the size of its projects. Prior to this China had
undertaken only relatively small projects that could be finished quickly and
that had an immediate though not always a large impact. Never had China
undertaken anything like this. This project was certainly one that would
take serious planning, various technical and other skills, and considerable
time to complete.138
In taking on this project China was obviously seeking to establish long-
term ties with the two countries involved, which might in turn give it a
support base in East Africa and much more. By ending Zambia’s depen-
dence on transport links through white-controlled Southern Africa, China
hoped Zambia might become a site of operations for guerrillas fighting the
white regimes in Rhodesia, South Africa, and the Portuguese colonies.139
Tanzania, as noted earlier, was already playing this role.
Perhaps even more important, in undertaking the Tan-Zam project China
sought to upstage the Soviet Union’s foreign aid efforts in the region. The
Tan-Zam Railroad aid pledge constituted the biggest ever by a Communist
country—more expensive than the Russian’s Aswan Dam project in Egypt
(which was $325 million).140 The Sino-Soviet feud obviously in part moti-
vated China to decide to take on the project. In addition to China’s ill-
feelings over the Kremlin’s cutting aid to China in 1960 and widespread
aid competition after that, it may have also related to China’s view that
the Soviet Union intended to dominate Eastern Africa and thereby extend
its naval influence into the Indian Ocean—a matter of great concern to
China.141
China also seems to have had a number of less obvious motives for build-
ing the railroad. It bears repeating that Zambia had rich copper deposits
and this was a commodity that China needed.142 Chinese foreign policy
decision makers may have also hoped to turn Tanzania into the economic
hub of East and Southern Africa displacing Kenya, which China considered
pro-Western.143 Chinese leaders might also have been thinking of gener-
ally weakening Europe’s hold on Africa while cultivating a market for its
products.144 By committing to a large and important aid project at this
time, China was likewise sending the message that the Great Proletarian
Cultural Revolution had not hampered China’s economic development
nor created political chaos (that affected government decision making) to
the extent that was reported.145 Finally, China leaders sought support for
various tenets of its foreign policy, its views on nuclear weapons being an
important example.146
The history of the project is quite revealing in terms of both China’s
commitment to it and the recipients’ views of it.147 In the 1950s, Britain
had considered building a railroad linking Zambia with Tanzania but
decided against it. In 1963, the two countries submitted a proposal to the
World Bank for assistance, but did not get funding. Tanzania and Zambia
then issued a joint statement of intent to build the railroad and approached
the United States, the United Kingdom, Japan, the Soviet Union, and the
African Development Bank for financing. None gave a positive response.
The need for the railroad became more evident when Zambia became
independent in 1964 (Tanzania had gained its independence in 1961.)
Zambia needed an outlet to the sea to export its products, the most impor-
tant of which was copper, other than through the white-ruled countries to
the south. Thus when Rhodesia declared its independence and the United
Kingdom called for an embargo, Rhodesia passed along a good portion of
the costs of the embargo to Zambia. In short, independence did not present
Zambia new economic opportunities. In fact, Zambia experienced serious
economic and other difficulties at the time. The government of Tanzania was
sympathetic and felt that its economic situation was linked to Zambia’s.148
In 1966, an Anglo-Canadian consortium considered the project and
rejected it. Meanwhile, China was invited to take a look at the project and
do a feasibility study. Tanzania and Zambia had both been suspicious of
Mao’s regime and some of the tenets of China’s foreign policy, and for this
and other reasons favored dealing with the West.149 However, they changed
their views of China to a marked degree when it offered aid. In fact, when
China decided on taking up the project, both President Nyerere of Tanzania
and President Kaunda of Zambia made speeches praising China’s help while
mentioning “efforts of the imperialists to block the project.”
For China, building the railroad entailed many hardships. But it was called
a “glorious achievement.” A movie was made about it later portraying the
workers as having to drink water found in puddles formed by elephants’ foot-
prints. Workers reported hearing lions roar at night. They had to check their
shoes in the morning before they put them on to be sure there was no poison-
ous snake inside. The project became a kind of epic in Mao’s China.150
By late 1971, 313 miles of track had been laid. By early 1973, some of
Zambia’s copper was being shipped on the railroad to the port of Dar es
Salaam in Tanzania. Thus Zambia was to some extent no longer forced to
send its exports through white-dominated countries. In the spring of 1974,
the railroad was linked up to Zambia’s existing railroad system.151
The project was finished in 1976—ahead of schedule.152 The railroad
was 1,162 miles in length—longer than from New York to Kansas City
or London to Moscow. China used 310,000 tons of steel, 330,000 tons of
cement, and huge amounts of other materials to build it. More than 25,000
Chinese and 50,000 Africans labored on the project.153
In political terms, meaning mainly public relations, the railroad was a
resounding success for China. Beijing won acclaim throughout the con-
tinent and beyond. The media and academics in other countries praised
China’s aid efforts.154 Many observers saw China in a new light. China’s
influence throughout Africa grew; some sources reported that by 1975 it
exceeded that of both the United States and the Soviet Union.155 In short,
Beijing accomplished its political goals. China also attained its strategic
objectives: it managed to outshine the Soviet Union in the minds of many
Africans, while it established a base in West Africa from which neither the
United States nor the Soviet Union could dislodge it.156
In economic terms, the results were quite different. China did not have
much foreign exchange at the time and kept its expenditures to a minimum
by utilizing its own materials for construction work on the project. In some
cases it raised the price of goods it delivered to pay for the project. China
also supplied much of the labor for the project in another effort to save
money; thus the project did not generate as much employment locally as it
might have otherwise. Tanzania and Zambia raised money for the project
by importing and selling Chinese goods—60 percent of their contribution,
which amounted to $120 million.157 The minister of commerce in Tanzania
at one point remarked that China had flooded the market with its con-
sumer goods. Zambian business leaders complained that China’s textiles
threatened local industries. Both Tanzania and Zambia expressed concern
on numerous occasions that sending more of their exports to China resulted
in a shortage of foreign exchange that they would have obtained from selling
these things to Western countries.158
China experienced difficulties in supplying the goods needed to build

the railroad. Beijing had to purchase bulldozers from Japan. Later some of
the locomotive engines proved both too weak and unreliable, forcing China
to buy Western-made engines. In fact, of the 85 locomotives put in ser-
vice when the line was opened five years later, only 30 were operational.159
China’s aid personnel and workers had trouble adjusting to the local climate,
the food, and the tropical diseases. Causing a public relations disaster, at one
point a local paper in Tanzania published a picture showing a recruiter in
China saying that Chinese could get free land in Tanzania if they would go
there to work on the railroad for a while. President Nyerere denounced the
piece as an imperialist plot; nevertheless, it caused local alarm. Finally, the
United States financed a road built in Tanzania at this time that competed
with the railroad.160
Tan-Zam suffered other problems. In 1979, damage was discovered at
18 locations on a stretch of the railroad in Tanzania caused by heavy rains.
Not long after this soldiers involved in the Rhodesian Civil War destroyed
several railroad bridges. The train engines continued to fail and there was
a constant lack of spare parts. Management was also a serious problem.161
In 1980, the Tan-Zam Railroad authority announced that the railroad had
accumulated a $26 million net loss.162
Thus, up to the end of period one of China’s foreign assistance, the Tan-
Zam Railroad project was a political and strategic success; but it was an
economic failure. Some final conclusions about the project need to be made
(and will be done in Volume 3, Chapter 2).
Other Major Aid Recipients in the Late 1960s and 70s

China made significant foreign aid donations to three other African coun-
tries beginning in the late 1960s and into the 1970s: Somalia, Sudan, and
Zaire.163 Aid to Somalia and Sudan mirrored China’s new geopolitical inter-
ests in an area where China sought new friends and bases of operation, on
Africa’s East Coast near or on the Indian Ocean. China’s aid to Zaire (the
new name for the Democratic Republic of the Congo as of 1971) reflected
an interest in an African nation very rich in natural resources as well as
Mao’s belated acceptance that Beijing had failed to win a war of national
liberation there not to mention adopting a revised view of the United States
and the Soviet Union.164
In 1960, Somalia gained its independence and forthwith extended diplo-
matic recognition to People’s Republic of China. In 1961, there were reports
that China had offered aid to Somalia in the form of medical supplies and
funds to build a radio station, though neither side announced the aid.165
China’s first officially announced aid to Somalia occurred in 1963 in the

form of a $3 million grant for budget relief and a $18 million interest-free
loan to build a national hall and to buy Chinese products.166 Likely some
of China’s aid funds also went toward road building, technical help, and
weapons.167
China’s interest in Somalia was probably related to the fact it was expe-
riencing tension with Kenya and Ethiopia at the time, and both were influ-
enced (and receiving aid) by the United States and the Soviet Union. The
Soviet Union was giving aid to Somalia but it had not proven very effective,
neither economically nor politically.168 Moreover, Somalia was a poor coun-
try, where China’s aid could have an impact. Finally, Somalia was also not
on good terms with neighboring French Somaliland causing China to think
it might promote its anti-imperialist, anticolonial credentials by helping
Somalia. As mentioned, Chinese leaders at this time may have also perceived
that Somalia, located at the horn of Africa, had geopolitical importance.169
In response to China’s aid promises, the Soviet Union extended more aid
to Somalia, notably military assistance that included sophisticated weapons.
A donation worth $30 million, some of which was spent for MiG fighter
planes and tanks, had a considerable impact.170 Interestingly, in that it
underscored the seriousness of the Sino-Soviet dispute and serious aid com-
petition between the two, Moscow’s aid agreement with Somalia stipulated
that it could not receive aid from other countries, probably explaining why
very little of China’s aid mentioned above was delivered.171
This situation, however, changed in 1967 and China delivered on its previ-
ous aid promises to Somalia, including providing funds for rice and tobacco
farms.172 In 1968, Chinese technicians were observed building an electric
power station and medical workers were seen at work.173 Beijing apparently
chose to deliver earlier pledges and extend more aid because Soviet aid had
proven disappointing to Somalia. The Chinese media were quick to point
out the failures of Soviet aid and the fact that Chinese workers lived under
the same conditions as local citizens.174
In 1971, China made a large aid donation to Somalia in the form of
a $110 million loan to build two roads, one of them 1,400 kilometers in
length.175 This was one of China’s biggest loans at the time and it funded
the longest road Chinese aid workers had ever undertaken. China was
motivated in making this aid donation for reasons that it provided the inte-
rior of Somalia easier access to the sea and thus afforded better trade and
other contacts with China. It also gave Somalia better access to Tanzania,
which was China’s close friend. Noteworthy as well, China had at this
time acquired considerable skill and experience in building roads. Finally
Beijing may have perceived that it could outdo the Soviet Union in its aid
work; this donation increased China’s total aid, which bested Soviet aid to
Somalia.176 Moscow reacted almost immediately by providing more eco-
nomic and military aid to Somalia—$90 million in economic assistance
and $50 million in arms aid.177
In 1974, after the fall of Ethiopia’s Haile Selassie from power and the
Soviet Union granting more aid to Ethiopia, which portended to hurt rela-
tions with Somalia, China made additional aid pledges to Somalia.178 Beijing
even gave assistance to finish Soviet projects and supplied parts for Soviet-
made weapons.179 In the ensuing years China finished a number of aid pro-
jects. In 1977, a bridge built with Chinese aid was completed.180 In July
1978, a 970-kilometer road was put into service. Vice Premier Chen Muhua
(a member of the politburo and the person said to be “in charge” of China’s
foreign aid program) arrived to attend the opening ceremony.181 The road,
it was said, would link up the northern and southern parts of the coun-
try and would be especially useful for transporting agricultural products.
The road also had strategic value since a good portion of it was close to
Ethiopia, where there was a serious internal conflict going on at the time.
In terms of the public relations value of this aid, China got credit for under-
taking another project that Western countries had turned down.182 When
the finished project was handed over to Somalia, China also announced the
completion of some wells, reservoirs, and canals that Chinese aid person-
nel had built.183 Neither China nor the Somali government disclosed the
amount of money China provided for the projects, but Western sources put
it at $64 million.184 In 1979, a Chinese-aided water project that would serve
30,000 people was finished.185
China’s aid, which emphasized help to the agricultural sector and road
building, was considered efficient, priced well, done on time, and also help-
ful in that China took over projects abandoned by the Soviet Union. Somalia
praised China for its assistance and spoke highly of it.186
Sudan established diplomatic ties with China in 1959, the third African
country to recognize Beijing. Zhou Enlai stopped in Sudan during his
seven-week African tour that began in December 1963.187 However, China
did not make any foreign assistance offers. The likely reasons were that
Chinese leaders perceived that the government was a right-wing one. Also,
the Chinese leadership did not think China could compete with Western
or Soviet aid giving. This changed in 1964 when the government was over-
thrown and was replaced by one more friendly toward China.
However, Beijing remained hesitant and did not make a foreign aid
pledge to Sudan until 1970 in the form of a $42 million interest-free
loan for the purchase of textiles and farm equipment, road construction,
and some small projects.188 The situation in Sudan was, according to
Mao’s definition, a revolutionary one; in fact, China may have expected

the government to be soon overthrown. Leftists groups and the Sudan
Communist Party had gained influence owing to the poor economic con-
ditions and civil strife. In addition, the situation in nearby countries may
have indicated to China’s foreign aid decision makers that China had good
opportunities to spread revolution.189 In any case China did not announce
this aid, prompting observers to think to think that China was unsure
about its policies and/or its aid included arms partly or mainly for use
elsewhere.
The next year, in 1971, the Sudan Communist Party and a faction in
the military attempted to overthrow the government but failed. The Soviet
Union was implicated in the plot and Soviet-Sudan relations soured. China
promptly criticized Moscow’s actions and offered another loan to Sudan for
$35 million allocated for highway construction.190 The loan also provided
funds to train troops and to equip the Sudanese military.191 This aid put
China ahead of the Kremlin as an aid provider to Sudan.192 The fact that
a Sudanese military mission visited China two months later suggested that
some of the money was for arms. Subsequently it was reported that China
had provided Sudan with eight fighter planes and enough tanks to fit an
armored division.193
In late 1972, China made another aid pledge to Sudan, this one worth
$40.2 million given in the form of a loan.194 The announcement mentioned
a textile and yarn factory, agricultural machinery, fisheries, and other like pro-
jects. This brought the total of China’s foreign aid to Sudan to $117 million,
the largest it had pledged to any African country (excluding Tanzania and
China’s financing of the Tan-Zam Railroad). China apparently sought to
rid Sudan completely of Soviet influence. Alternatively, Beijing may have
wanted to gain some control over traffic in the Red Sea and/or hoped to
increase trade with Sudan. China was importing large quantities of Sudanese
cotton at the time, which helped increase China’s textile production.195 In
fact, Sudan was one of the few African countries where China’s foreign aid
generated a significant increase in trade relations.196
In the late 1970s, Chinese aid deliveries were in evidence in Sudan, though
there were no new pledges announced. It seemed China was cutting back its
aid to Sudan, though this may have been due solely to the general reduction of
aid giving after Mao’s death in 1976.197 Another explanation is that much of
China’s aid to Sudan was arms and China did not want to announce this aid,
and Sudan likewise wanted to keep it secret. In any case, not long after this
it was reported that China had extended Sudan an additional $300 million
in the form of an interest-free loan with a long grace period, for which the
government of Sudan expressed high praise for China.198
China’s aid to Zaire had an interesting twist. Beijing extended a consider-

able amount of aid to Zaire after spending large amounts of money to over-
throw its government (when it was the Democratic Republic of the Congo)
in the 1950 and 60s.199 In fact, in 1966 President Mobuto said: “My govern-
ment does not at present want a rapprochement with the People’s Republic of
China because of all of the damaging deeds committed by these people.”200
(He was referring to China’s support of Patrice Lumumba, whom Mobuto
regarded as a separatist, and China’s subsequent aid to nearby states to fun-
nel funds and arms to rebels in Zaire.) Lumumba was arrested and killed in
1961. Mao later admitted (during a visit by Mobuto to China): “I have lost
much money and arms trying to overthrow you.”201
But by 1973, the situation in Zaire had changed dramatically. China
had abandoned its ideology-based foreign policy and its support for wars of
national liberation. Zaire had established diplomatic relations with Beijing
the previous year. China’s improved relations with the United States was
also a factor.202 Thus China signed an agreement on economic and techni-
cal cooperation with the government of Zaire and offered a loan said to be
worth $100 million “or more” to help develop agriculture.203 This single
offer made Zaire one of China’s top ten foreign aid recipients and constituted
the first time that Zaire had taken aid from a Communist country.204
China was also motivated to give economic assistance to Zaire by its
antipathy toward the Soviet Union and its activities in the region. In mid-
1974, it was reported that Chinese advisors were helping train troops in
Zaire to be sent to Angola, where a Cuban and Soviet-backed civil war was
in progress. According to one source, this amounted to 120 Chinese mili-
tary instructors and 450 tons of arms dispatched to the National Front for
the Liberation of Angola (FNLA), which was operating out of Zaire.205
During the invasion of Zaire’s Shaba Province in 1977, it was reported
that Zaire’s only tanks had been provided by China—enough (T-62 tanks)
to equip an armored battalion.206 It was said that China provided Zaire
with 30 tons of military equipment that year.207 In 1978, China’s foreign
minister pledged “full support” to Zaire to deal with the aggression of
“Soviet social imperialists.” Subsequently, the government of Zaire asked
China for two patrol boats and twenty more tanks, which were promptly
delivered.208 China, it was reported, provided arms aid to Zaire reportedly
worth $21 million.209
After the conflict it was learned that China had provided more than
$130 million in economic aid to Zaire, though it was unclear if the earlier
donation of $100 million was included in this figure.210 In any event, China
was the only Communist country to help President Mobutu. Relations with
Zaire improved considerably as a result.
One of the side benefits of China’s new and much improved relation-
ship with Zaire was that Africans began to take a new look at China. This
helped Beijing make gains in winning diplomatic relations with various
African countries and helped China in its diplomatic war with Taiwan.211
It also helped Beijing win support for a number of important tenets of its
foreign policy.
Aid to Other African Countries

China has extended foreign aid to almost every country in Africa thus mak-
ing it impossible to assess in depth its aid to all countries on the continent.
Attention will therefore be given to those recipients where the aid was sub-
stantial and/or China had important and/or special motives in giving the
aid. Here China’s foreign aid donations to African countries will be exam-
ined in chronological order.
In 1964, China signed a cultural and economic agreement with the gov-
ernment of Kenya and with that extended a $2.8 million cash grant plus
$15 million in the form of an interest-free loan.212 The loan was specified to
pay for Chinese technicians and for budgetary support, though it may have
also been used for buying arms from China.213 Chinese leaders probably
wanted to show their appreciation for the government of Kenya establish-
ing diplomatic ties at this time; they also no doubt hoped to obtain Kenya’s
vote in support of China’s position in the coming Afro-Asian Conference.214
In addition, China sought to impact the fighting in the Congo and needed
closer access. Finally, Beijing may have also wanted to convince the govern-
ment of Kenya of China’s good intentions in view of arms aid it had pro-
vided to nearby Somalia.215
The aid pledge had little impact on trade between the two countries
bringing to question if much of it was actually used and thinking it may
have been simply a test.216 In any case, because Kenya was receiving large
quantities of aid from Western countries and significant aid from the Soviet
Union at this time, China did not gain much influence. This probably
explains China’s taking a risk in helping revolutionary forces within Kenya,
which resulted in the Kenyan government criticizing China and then expel-
ling Chinese diplomats and journalists.217 Kenyan officials later charged
that China was trying to subvert the government and was using aid to do so;
they also complained that China only allowed the use of its aid to purchase
very inferior quality Chinese goods.218 Radicalism in China that impacted
its foreign policy during the Cultural Revolution further affected China-
Kenya relations in a negative manner. Officers in the Chinese Embassy in
Kenya on one occasion accused Kenya’s minister of economic planning of
trying to sabotage their relationship.219 In mid-1967 it was reported that

little of the funds foreign aid China pledged were used.220
Almost a decade later, in 1974, the Chinese Red Cross donated $420,000
to help relieve drought conditions in Kenya and to repair strained relations
with the Kenyan government. This constituted the largest Red Cross dona-
tion China had given a country outside the Communist Bloc.221 Still, rela-
tions between the two countries did not improve significantly.
In 1964, China pledged a credit worth $4 million to the government
of the Central African Republic.222 The timing of this aid suggests it was
a reward for establishing diplomatic relations and/or support for the coun-
try’s non-aligned foreign policy. Alternatively, China sought to influence
the Central African Republic’s vote for China’s position at the upcoming
Afro-Asian Conference to be held the next year; if this was its purpose it did
not succeed.223
However, little of China’s aid was drawn during 1964–65 and in January
1966 the Central African Republic’s government was overthrown. The new
leadership accused China of supporting armed revolt in their country and at a
press conference provided evidence of this including documents and Chinese
weapons. Relations deteriorated between the two countries and China’s
foreign aid diplomacy in this case was considered a failure.224 Later that
year the Central African Republic cut diplomatic relations with China and
sent Chinese personnel home, which together with Burundi and Dahomey
(renamed the Republic of Benin in 1975) also breaking off with China,
constituted a chain of setbacks for Beijing in Africa.225
In 1965, when Ugandan president Oboto visited Beijing, China pledged
aid in the form of a $12 million interest-free loan and a $3 million grant.
Half of the loan was in the form of convertible currency; the other half
was for goods and services.226 The timing of the aid suggested that China
hoped to influence Uganda’s vote in the upcoming Afro-Asian Conference,
especially in view of the fact the Soviet Union promised Uganda aid for
exactly the same amount. But there was also a wave of anti-Americanism in
Uganda at the time and there was friction with Japan and India; in other
words Uganda had trouble with all of China’s aid competitors.227 This gave
China an advantage.
The money was allocated specifically, according to one writer, for rice
production (the $3 million grant) and for other “development projects.” 228
However, some, even much, of the money was diverted for arms to be used
by the Ugandan army and some went to the Congo to influence the civil
conflict there. Weapons were reported to have been provided to Watusi
refugees in Uganda who were being sent back to Rwanda and Burundi to
launch guerrilla movements there. Finally, China’s foreign aid may have
been intended to strengthen President Oboto’s political position since he

was seen as a friend of China.229 Trade data suggest that a meaningful por-
tion of the aid was economic assistance and China’s financial help was more
than what was announced.230
In 1967, with the army’s position strengthened, military officials com-
plained of Chinese activities in Uganda and expelled a Chinese mission.
Subsequently the Soviet Union filled the aid gap by providing both arms
and economic aid. In 1971, President Oboto was overthrown. Later that
year the Uganda government accused Chinese aid workers in Tanzania of
helping their host government during a border skirmish against Ugandan
forces.231
Little if any of China’s aid was subsequently used. However, the politi-
cal situation in Uganda changed in 1973 and China’s foreign aid was again
drawn and work proceeded on a dam, a brick factory, a rice scheme, and
some other projects.232 In the ensuing years foreign observers gave evidence
that China’s aid work in Uganda was active.233
In 1967, China signed a trade and cultural agreement with the govern-
ment of Mauritania and at the same time pledged foreign aid. Shortly after
this it was reported that China had given Mauritania a $4 million loan. 234
China was evidently motivated by Mauritania granting China diplomatic
recognition, perhaps hoping it might influence other countries to also.
Finally, Western and Soviet influence in Mauritania was minimal.235
The aid was soon drawn as evidenced by the fact that trade doubled and
Chinese medical teams were seen working in country. In 1968 China pur-
veyed equipment and supplies for the country’s schools.236 In 1969, China
sent 3,000 tons of grain to Mauritania. At that time an agreement was signed
on China providing money for well drilling, although it was uncertain if
this was a pledge of new aid or simply specifying the use of already provided
funds.237 In 1970, a “House of Youth” building and a “Home of Culture”
building were finished using China’s aid funds.238
In 1971, Mao invited a Mauritanian delegation to China and in their
presence announced a $20 million interest-free loan.239 In an apparent
gesture of thanks, the government of Mauritania co-sponsored the 1971
Albania Resolution that seated China in the United Nations and unseated
Taiwan. In 1974, China pledged $37 million in aid to Mauritania to build
a deep-water port in Nouakchott, a road (that had been started by another
financier), and a sports stadium. Other aid projects were mentioned, but
the amount of aid promised and the conditions were not announced. The
port, which was not scheduled for completion until 1984 and received more
funding later, was said to be China’s second largest aid project in Africa after
the Tan-Zam Railroad.240
In October 1971, Emperor Haile Selassie of Ethiopia traveled to China

shortly after the two countries established diplomatic relations and visited
Mao and other top leaders. His specific purpose was to obtain foreign
aid, and he was not disappointed. The Chinese government pledged an
$84 million interest-free loan said to be for facilitating the development of
agriculture in Ethiopia.241 However, it was also reported at the time that
the loan was for a larger amount, perhaps as much as $150 million.242 In
addition, shortly after this China promised to purchase $2 million worth of
Ethiopian coffee to adjust their trade balance that favored China.243
Counting only the loan and assuming it to be for $84 million it was
still one of the largest pledges of foreign aid China had given to an African
country up to that time. The aid was also generous in terms of its grant
factor.244 Funds were delivered soon after the aid was promised as indicated
by the arrival of a Chinese survey team and aid personnel to launch various
projects, including road building, electrification, and hydropower. 245
Ethiopia establishing formal ties with Beijing and the foreign aid that fol-
lowed had special significance since Ethiopian leaders were anti-Communist
and had expressed fears of a Chinese presence in their country. Changing its
position on China’s presence in Africa influenced the views of other African
countries. Chinese leaders were probably also motivated by the fact that
the United States had cut it aid to Ethiopia and the Soviet Union could not
make any inroads into Ethiopia due to it helping Somalia (which was at odds
with Ethiopia) at the time. Finally, the aid may have been given (assuming
it had been discussed before the date it was officially announced) to obtain
Ethiopia’s support for China entering the United Nations. Haile Selassie had
influence on other African nations that ultimately played an important role
in China being voted into the United Nations. Incidentally, China appeared
to have had no interest in Ethiopia adopting a socialist economy or following
the Chinese economic model.246
In 1971, China also made aid pledges to Equatorial Guinea and Sierra
Leone for the first time. Chinese specialists were soon seen in Equatorial
Guinea.247 However, there were no announcements of the amounts or
conditions of any aid. China’s foreign aid to Sierra Leone consisted of a
$30 million loan.248 This aid was for medical teams, rice stations, a sta-
dium, and two bridges.249 In 1972, China announced aid for the first time
to Burundi, Mauritius, Rwanda, Cameroon, Togo, Nigeria, Malagasy
Republic, and Dahomey.250 It was later reported that China had promised
Burundi $20 million.251 This aid took the form of a loan and seemed con-
nected to Burundi’s resumption of diplomatic relations with Beijing.252
China’s aid pledge to Mauritius was for $31.5 million and was a loan. 253
Reports indicated that it was to build an airport.254 China’s aid to Rwanda
was an interest-free loan for $22 million for building a road linking Rwanda
and Tanzania and for a cement factory.255 China’s aid to Cameroon took
the form of a $73 million interest-free loan repayable over a period of ten
years.256 There was mention in the press that it may be for a dam, but there
was no subsequent evidence of this.257 China’s aid to Togo was a $45 million
interest-free loan that may have been connected to the two countries estab-
lishing diplomatic relations.258 At this time there was mention in China
and elsewhere about China’s foreign aid activities in Nigeria, but neither
the amounts of aid nor conditions were stated save mention of a $3 million
loan.259 China’s aid to Dahomey reportedly consisted of a $45.1 million
loan.260 Diplomatic relations with China were established at the same time,
so the two seem linked.261 This was a large donation for such a small recipi-
ent, suggesting China had other aims—perhaps making Dahomey a special
friend.262 China’s aid to the Malagasy Republic was said to be $9 million.263
It was later reported that the aid went to complete a hotel stated by South
Africa but not finished.264
In July 1973 China established diplomatic relations with Niger and
pledged $1 million in aid.265 That year China also promised Upper Volta a
loan to the tune of $50 million.266 In addition, China pledged $50 million
to Chad.267 In 1974, China made no aid promises to any African coun-
tries that had not received aid before. In 1975, China made aid pledges to
Morocco and Mozambique; both were new recipients. But in neither case
were details of the aid made available.268
In 1977, China delivered foreign aid to twenty-nine African countries,
but only three of these received aid in a significant amount (meaning over
$5 million): Sudan, Zaire, and Tanzania. China added no new nations to its
list of African recipients.269
In 1978, China extended foreign aid to 31 African countries, two more
than in 1977. Four received aid for the first time: Botswana, Seychelles,
Surinam, and Liberia. Aid to Ghana also seemed to be put back on track.
Most of China’s aid was in the form of projects.270 Road and bridges were
among the larger projects. China extended aid to Cameroon and Chad for
an amount of $16 million to build a bridge over the Chari River between
the two countries. The agreement also included a road in Cameroon. China
pledged aid to Madagascar to build a 223-kilometer long road that was an
extension of a foreign aid sponsored road in 1976.271
The only important instance of China providing significant military
assistance at this time was to Zaire; this consisted of new arms and supplies,
likely in significant amounts.272 However, China sent some arms to guer-
rillas operating in and against Rhodesia.273 China’s lower level of activity
in this realm suggested that its policy of supporting national liberation was
waning. China’s foreign aid was more anti-Soviet in its tenor and appeared
linked also to Beijing’s desire to lead the Third World bloc. China’s aid was
also noticeably anti-Cuban and was given in a number of cases to counter
Cuban influence in Africa, especially in Southern Africa, because Cuba was
supporting Soviet goals.274 Meanwhile China showed a greater willingness
to give aid to countries receiving assistance from Western countries.
In 1979, China granted or delivered foreign aid to 23 African countries;
in 1980, China pledged aid or delivered aid to 25 nations. Most of the recipi-
ents got only small donations, though China also promised or provided arms
and some emergency aid.275 Cape Verde, Mali, Mauritius, Upper Volta, and
Zambia were the most important recipients of new aid projects during 1979.
Burundi, Madagascar, Mauritania, Senegal, Sierra Leone, and Tanzania
were the major beneficiaries of new projects in 1980.276
The amount of China’s foreign aid declined markedly leading up to and
after 1979 due to the new Deng regime’s focus on China’s own development,
its need for capital at home, and the belief that China had been too generous
in giving financial help to other countries during the Mao era. Agricultural
aid and medical aid increased during 1979–80 because they were not expen-
sive for China. However, China showed less willingness to announce its aid
and may have given more than it or its recipients announced.277
China’s Aid to Liberation Movements

An analysis of China’s foreign aid to African countries during period one of
its aid giving would not be complete without further assessment of China’s
arms aid and its financial and other assistance to support what it labeled
as “wars of national liberation.”278 However, there is one caveat: no serious
effort will be made to provide the dollar amounts of either China’s arms aid
or its financing revolutionary or insurgent movements as neither China nor
the recipients have provided useful figures on such aid.279 However, some
scattered data will be cited on the number of recipients and some estimates
given on the costs of some donations.
China’s aid in these two categories—arms aid and other aid to revo-
lutionary movements Africa—overlaps. (China’s military aid is discussed
elsewhere in this book.) Both had considerable impact; yet they were cer-
tainly less than the reactions to them would suggest. There are three reasons
for this: One, China wanted the movements it supported to be self-reliant;
thus China’s aid was usually not large. Two, other countries often reacted
in a big way to China becoming a new player in Africa and China’s aid was
perceived to threaten the interests of the West (and later the Soviet Union)
more than it, in fact, did. Three, much of China’s assistance to revolutionary
movements was given in the form of military training and small arms and
supplies that were not very expensive.280
That said it was China’s policy to heartily support revolutionary move-
ments. China aided them almost without question.281 Beijing even helped
rivals of groups it supported.282 China was almost indiscriminate in its aid
giving to such movements because Beijing sought to establish its antico-
lonial, anti-imperialist, anti-Western credentials.283 As a matter of record
China gave help to more insurgency groups in Africa than to anywhere else
in the world. According to one writer, China provided money, arms, food,
or medicine, to nearly all of the liberation movements in Africa.284 Its aid
to revolutionary groups had impact on the politics of many African nations
and often proved to be costly for the United States and several European
countries and subsequently the Soviet Union to counter.285
While China did not spend a lot of money in this category of aid, its
help to revolutionary groups in most instances connected to other aid it
gave. Good government-to-government relations, often built on aid rela-
tions, frequently provided the prelude for China to support revolutionary
movements. China thus gave considerable “regular” aid (nonmilitary aid)
in order to “set the stage” for aid to insurgent groups that it thought were
pursuing a war of national liberation. In many other cases these two kinds
of aid were in conflict.
What were China’s rationale, motives, and goals? As noted in Volume 1,
Chapter 2, Mao’s view of the world was highly influenced by the fact that
he subscribed to Lenin’s thesis on imperialism, especially the notion that
the Third World was ripe for revolution because workers in the advanced
countries had been bought off by their capitalist classes using huge profits
gained from exploiting workers in overseas colonies. This combined with
Mao’s successful efforts to engineer a revolution in China against Chiang
Kai-shek and seize power this way, and his belief that (one might say in
the vein of past Chinese leaders that China was the font of experience that
applied universally) his teachings on guerrilla warfare and revolution could
be put to use in Africa.286
Initially, China’s support for wars of national liberation, as was the
case with its other aid, showed a preference for aiding groups that were
pro-Moscow or had socialist or Communist leanings.287 Or, if there was a
choice, China picked groups that were more radical but that were generally
not hostile toward the Soviet Union. This, of course, changed in the 1960s,
due to the downturn in Sino-Soviet relations and occurred at a time when
self-determination became popular in Africa.288
Unlike the events of 1960 causing China to change its aid policies gener-
ally, the takeoff point for China regarding its support of national liberation
was Moscow’s change of mind regarding the Cuba crisis in 1962. China
interpreted this event as Moscow backing down in the face of US threats,
in other words cowardice on the Kremlin’s part.289 At the tenth Chinese
Communist Party plenum that year, Mao produced a list of national lib-
eration struggles, from one promoting the independence of Egypt to the
armed struggle in South Vietnam, to prove that the international situation
for revolution was excellent and that the Soviet Union was not doing its
job as leader of the Communist Bloc. As Sino-Soviet relations deteriorated
further, Mao spoke of the importance of the global “intermediate zone” in
order to counter the notion the Kremlin propagated that because of China a
“great disorder” had taken place, which the imperialists could exploit.290
China’s support for wars of national liberation increased again as a result of
Mao’s decision to try to regain political power (he had lost in 1959 as a result
of the failed Great Leap Forward). (During the violent stage of the Cultural
Revolution [1965–69], in fact, he won that struggle.) Thus the role of Mao’s
ideology grew. Other Chinese leaders called him a “post-revolutionary theo-
rist.” Mao’s supporters referred to him as the “Lenin of the present era.”
They contended that his ideas were applicable not only to China but to the
rest of the world as well.291
That year Lin Biao published his work Long Live the Victory of People’s
War in which he divided the world into two camps, poor and rich, or “coun-
tryside and city countries,” and advanced the thesis that the former would
engage in struggle and prevail over the latter. This thesis became the offi-
cial ideology in China when Mao and other Chinese leaders declared these
“principle contradictions” (a Maoist way of assessing the world) to be played
out in the anti-imperialist struggle in the Third World.292
Looking beyond the “logic” of China’s aid efforts the most salient ques-
tion to ask was: Was China ultimately successful in promoting the causes of
anti-imperialism and anticolonialism through supporting wars of national
liberation? The answer to that question is both is yes and no. Arguing for
China’s success most of the nations of the African continent felt that they
had been exploited as a result of colonialism. Many believed that imperial-
ism was a nefarious force in world politics and they were victims. Many felt
the oppression by white race nations. China claimed to have suffered from
both colonialism (or pseudo-colonialism that was worse) and imperialism.293
Chinese leaders (and its aid personnel) were also quick to point out that
China was not a white nation. This worked. African leaders were receptive
to a new player—China. Most thought it would be a good thing to have bet-
ter relations with China. China was a fresh wind, many African leaders said.
Its aid was welcomed. It was not Western imperialist aid. It was aid given to
create reforms and revolution.
But whether or not China was ultimately a winner (or generally suc-
cessful) in supporting wars of national liberation is another matter. China
provided aid, including arms and training and certainly moral support, to
a large number of revolutionary groups in Africa. This began in the 1950s,
before China was formally or meaningfully in the business of giving foreign
aid to African countries. Beijing recognized Algeria’s National Liberation
Front in 1958 and forthwith supplied it with arms. China provided help
to Robert Mugabe’s Zimbabwe African National Union for some time.
In 1960, China provided training for rebels from Guinea-Bissau. China sup-
ported the African National Congress and subsequently switched to help the
Pan-Africanist Congress as Soviet influence prevailed in the former.294
China spent more effort in Africa than anywhere else supporting lib-
eration movements. The Congo, Angola, Mozambique, and Zimbabwe
were the important ones. In the case of Zimbabwe, China’s help to Robert
Mugabe’s Zimbabwe African National Union was linked in policy terms
to China’s considerable foreign aid to Zimbabwe then and later.295 China
reached agreements with Tanzania, Ghana, and Congo-Brazzaville to train
revolutionaries on their territory. A number of them received arms instruc-
tions and other training in Tanzania. China coordinated military training
for guerrillas with the Organization for African Unity (OAU). By 1971–72,
China provided 75 percent of OAU’s arms.296
The most successful of China’s efforts to spark wars of national libera-
tion were against the former Portuguese colonies in the 1970s. In the case
of Mozambique, China offered support in both arms and training to the
nationalist liberation organization FRELIMO (Mozambique Liberation
Front) and a number of its splinter organizations. In some cases Chinese
experts fought alongside local guerrillas.297 When Mozambique gained
independence, China celebrated the event with great fanfare and offered
official foreign aid to the new government—the first country to do so.298
But China also experienced a number of setbacks. Many of its defeats,
it needs to be noted, were rendered by the Soviet Union through its aid
to competing groups.299 In addition, after 1965 the Cultural Revolution
moved China toward radicalism and more aggressive, often impetuous, and
without much forethought, foreign policies. In Africa, this fueled suspicions
of China trying to spread Communism. It resulted in Tunisia breaking off
diplomatic relations, Kenya expelling the Chinese charge d’affaires, and the
number of African delegations visiting China dropping from 116 in 1966 to
just 12 in 1968.300
Assessing China’s success or failure in the realm or category of wars of
national liberation, however, requires noting that China espoused a rather
narrow definition of this term and usually denied that it was supporting a
revolution, certainly not a Communist revolution. This precluded (by defi-

nition) China losing. Also when giving aid, China insinuated that it would
be able to do more in the future as it developed economically; thus its aid
would be limited now. Moreover, Chinese leaders insisted that such wars be
self-motivated. Finally, Beijing often mentioned hope for nations that had
yet to become independent.301 Thus many of China’s instances of giving
help to revolutionary movements were considered trials, and setbacks were
to be expected.
When China suffered a defeat in its efforts to instigate a revolutionary
war in the Congo, it asserted that it had not correctly defined the neces-
sary conditions for a war of national liberation. Thus, one can say (maybe
only cynically though) of the revolutions that China supported all suc-
ceeded. There were certainly successes (if only temporary): Angola (1974),
Mozambique (1975), Zimbabwe (1980), and South Africa (1994, with the
transfer of power from the white regime).302
How much China spent on supporting liberation wars, as noted earlier, is
difficult to impossible to say. However, some data are available on the scope
of training China provided to guerrilla group. Between 1956 and 1977, one
writer states that 3,075 “trainees” from various countries went to China;
2,675 were from Africa.303 According to another source, China trained 2,673
military personnel from African countries in China, with Tanzania lead-
ing (1,025) followed by Congo-Brazzaville, Guinea, and Sudan.304 China
provided military training to more than a 1,000 Tanzanians between 1955
and 1975. Beijing even provided training to its navy personnel beginning in
1969 and pilots in 1971. Zambia was also a main recipient country.305 Some
trainees provided instructions to others when they returned home, some-
times along with Chinese advisors (Tanzania, Zambia, and Ghana being
good examples of this practice).306 China offered more training when it pro-
vided more sophisticated weapons.
In all, China provided military and/or political training to potential
combatants from around 20 Africa countries.307 While this was probably
less than 10 percent in value of that provided by all Communist countries at
the time, it did have an impact. Chinese training was considered useful and
effective, and Mao’s theories on guerrilla warfare were with some caveats
proven to work.308
Looking at China’s arms aid also gives some evidence of the scope of
China’s total foreign aid to support revolutionary causes; but this is diffi-
cult to measure since China expended considerable funds on military aid to
African countries about which Beijing has never published figures. Still the
data should be looked at as a reflection of what China did and the policies
that led to its actions.
One source put a value on China’s arms aid to African countries at

$42 million from 1961 to 1971.309 Another put it at $142 million form 1967
to 1976, stating that it was just under 3 percent of the total of arms aid given
to African countries.310 Tanzania was the largest recipient ($75 million) fol-
lowed by Zaire ($21 million) and Congo-Brazzaville ($10 million).311 These
figures are estimates and seem quite low in view of the fact China provided
some of these countries costly weapons including patrol boats and MiG
fighter planes, tanks, and gunboats.312 On the other hand China’s sophisti-
cated arms aid in most cases may be, and often was, categorized as support-
ing friendly governments rather than wars of national liberation.
There are some other pieces of information on China’s “revolutionary”
arms aid. Up to March 1966, it was reported China had sent 11,000 tons
of arms to African liberation movements.313 The next year the Kenyan
government seized 75 tons of Chinese arms en route from Tanzania to the
Congo.314 This had an impact on the conflicts in the Sudan, the Congo,
and Biafra.315
While initially most of China’s arms aid to support wars of national lib-
eration took the form of small weapons and ammunition, this changed in
the mid-1960s as China had heavier weapons to supply to its friends and,
notably during the Cultural Revolution, had greater motivation to support
liberation wars. Another reason was that the value of China’s arms aid before
the mid-1960s was small since it did not take much to support the groups it
favored as the Soviet Union provided the heavier weapons. Yet another rea-
son was that most of China’s arms to liberation movements were dispatched
to friendly national governments and then transferred.316 Thus they “got
lost in the shuffle.” Tanzania, the Congo (Brazzaville), and Algeria were the
main transfer countries, though arms to support revolutionary movements
were also sent through the Afro-Asian Solidarity Fund.317 This seems to
confirm that some, considerable at times, of the foreign aid to these coun-
tries was in fact arms aid that went to insurgent groups.318
By way of a final analysis, China’s support for wars of national liberation
generally appeared to be a failure notwithstanding the travails and costs
to Western countries and later the Soviet Union. Despite a few victories,
Beijing suffered a large number of setbacks while its victories were not very
important to China pursuing its national interests. Hence China’s policy of
supporting wars of national liberation was abandoned at the beginning of
the Deng era. In 1978, at a meeting of the Chinese Communist Party, at
which time Deng wrested the mantle of power from Hua Guofeng, he stated
that China would avoid supporting revolutionary movements and focus on
domestic economic development. This for all intents and purposes marked
the end of China supporting wars of national liberation.
Conclusions
The amount of foreign assistance China pledged or provided to African
countries during period one of its aid giving was by many accounts modest.319
It was considerably less than the amounts given by a number of Western
countries and the Soviet Union. It was small compared to the aid given to
other geographic areas of the world during those years. It was much, much
less than what China extended during period two (as will be shown in the
next chapter).
It has been estimated that China’s total “regular” or economic aid pledged
during period one was around 2–3 billion, of which probably a little over
half was actually delivered.320 China’s total economic aid to African coun-
tries was half of that given by Eastern European countries during period one
and less than a third of that extended by the Soviet Union.321 China sent
only a fraction of the number of technicians to Africa that the Soviet Union
and Eastern Europe sent and for a time only slightly more than what Cuba
provided. The same can be said about China’s military technicians, military
training offered in China, and its supporting African students to study in
China.322 China’s military aid to African countries is said to have totaled
somewhat over $1.1 billion.323
China’s aid was even less competitive when compared with Western aid
(meaning Japan, the United States, and Western Europe). In the recent
decades they extended development aid to countries in Africa totaling more
than $1 trillion.324 China’s foreign aid to African countries was thus small
compared to the aid provided by Western countries.
However, China’s aid was also in many ways worthy of praise. China
delivered a slightly higher percent of its aid promised than either the Soviet
Union or Eastern European countries and most of its aid was in the form of
grants (15 to 20 percent) or in interest-free loans with long grace periods.325
China’s aid was less expensive in terms of administrative overheads and
other charges. Its workers were much less expensive; China charged only
$100 per month for most of its medical personnel.326 As frequently noted
China’s aid was without conditions and it was efficient in terms of fostering
economic development.
China promised aid to a large number of African nations. In fact, China
pledged foreign aid to more African countries, around triple the number,
than to nations in any other region.327 The large number of countries in
Africa and the fact China’s aid donations and its projects were small explain
this. China’s large recipients in Africa were Tanzania, Zambia, Somalia, and
Zaire (in that order); they got around half of China’s total aid to the region.328
China’s aid to these countries was competitive with other aid givers.
More important than the value of its aid or the number of recipients in
assessing China’s foreign aid diplomacy vis-à-vis African countries is under-
standing why and how China launched its foreign aid giving to African
countries, how and why it changed, its successes and failures, and how it
comported with China’s view of the world and its larger foreign policy objec-
tives. Finally, how did African nations respond? These matters tell the real
story of China’s early aid to Africa.
Upon establishing the People’s Republic of China, Chinese leaders sought
to promote Maoist policies of opposition to colonialism and imperialism.
This applied to China’s Africa policy more than to other areas of the world.
Subsequently, Mao developed a plan called the “United Front strategy” to
defeat Western imperialism and neocolonialism. He defined Africa as the
most important region where the global struggle between the East and the
West would play out.329 China’s foreign aid was thus very anti-West and
especially anti-United States in its tenor.
Early on China targeted the West African states of Ghana, Guinea, Mali,
and the Congo. They gained their independence earlier than other African
countries and were seen in Beijing as anti–status quo countries that China
could approach.330 They were the first to receive Chinese aid. Cultivating rela-
tions with these countries aid proved an effective tool of China’s diplomacy
for a while at least.331 Meanwhile, China rendered aid to “progressive” African
organizations such as the Afro-Asian People’s Solidarity Organization, the
Chinese-African People’s Friendship Association, the Afro-Asian People’s
Solidarity Council, and the Afro-Asian Journalists Association. In 1960,
China established the Sino-African People’s Friendship Association to estab-
lish better relations including diplomatic ties with African countries.332 In
the ensuing years China provided aid and other support to a host of regional
organizations, which Beijing did not do in other regions of the world.333
China continued to support and finance these and other African
regional organizations. In some important ways this laid the groundwork
for Beijing to pledge massive amounts of aid to the Forum on China-African
Cooperation during period two (in 2000 and after) and to a number of other
organizations, as we will see in the next chapter.
After 1960 China’s hostility toward the Kremlin played out more in
Africa than elsewhere. Like its views of competing with Europe and the
United States in Africa, Chinese leaders perceived China had the advan-
tage of not being a Western, white country. They felt China’s development
experience had special application in Africa and thought they could do bet-
ter in helping poor African countries. They knew that their aid personnel
would work in unstable and hostile environments and ensure that the aid
projects succeed.
Chinese-Soviet aid competition reached a crescendo in 1965 with both

trying to influence the Afro-Asian Conference to their advantage and to the
detriment of the other. The aid contest with Moscow continued after that
and throughout period one of China’s aid giving. It motivated China’s aid
giving, which was in many ways effective in undermining Soviet foreign
policy and its aid to African countries.
Meanwhile, in the late 1950s and early 1960s, China sought to break
out of its isolation that was in large part self-imposed but also orchestrated
by the United States and other Western countries (through with the help of
the United Nations). Thus China employed foreign aid to win diplomatic
ties with Third World countries throughout the world. Africa was of special
interest in this realm simply because African countries were mostly small
and thus there were many of them. By the 1970s this effort had clearly
facilitated China’s efforts to begin to win the diplomatic war with Taiwan
and gain membership in the United Nations.
In the late 1960s China’s geopolitical strategy toward Africa changed.
The West African colonies got their independence earlier and were more
radical; thus China’s aid efforts at first focused there. But, as noted, Beijing
experienced a number of setbacks. Also the attention of Chinese leaders
refocused to East Africa (the littoral countries especially). East Africa was
closer to China and to China’s Third World competitor, India. Later China
had another reason for shifting its aid to Eastern Africa: It was strategically
more important given that it was adjacent to the oil lifeline from the Middle
East to East Asia. Finally, it afforded better access to Southern Africa (where
white regimes ruled), which became a Chinese target.334
Chinese leaders found that even though its foreign assistance was not
large, China could use it effectively to gain friends and influence. African
leaders were honored that China had an interest in them. No other impor-
tant or big country regarded them so highly or treated them so well. China
offered an alternative to seeking aid from Western countries, the Soviet
Union and international organizations. Finally, African countries needed
financial help.
African leaders praised China. Chinese leaders appreciated African coun-
tries’ compliments and support. Mao feted them during their trips to China.
There were photo ops that afforded pictures the Chinese media duly used.
In this way Mao cultivated his reputed internationalism. He presented an
image at home of how other countries liked his “new” China. This strength-
ened his governance (harking back to the way tribute bearers gave the
emperor face and a stronger mandate to rule).
China made a special point of demonstrating its aid generosity toward
African countries. Chinese leaders portrayed their country as poor, but
willing to help. They characterized China as an underdeveloped country

like African countries. All this resonated with the public in African coun-
tries. Premier Zhou Enlai told Medico Keita, president of Mali: “We have
the same worries you have.”335 Chinese leaders claimed they had a better
understanding of African problems because China was like them in terms
of economic development. China studiously advertised the fact that its aid
personnel did not take high salaries and they instead adopted a standard
of living akin to that of the African people. China promised that its aid
workers would follow local standards of living and made it part of its “aid
principles.” Chinese technicians were paid approximately one-third of those
from the Soviet Union and Eastern Europe and even less when compared to
US and Western European experts.336 African leaders noticed this.
Mao even seemed to think he could push the United States and the
Soviet Union out of at least some African countries. When he spoke of an
intermediate zone (of non-superpower industrial countries such as France,
Germany, Italy, Japan, and the United Kingdom) that might link up with the
Third World under Chinese leadership, he specifically mentioned Africa.337
Africa thus played a special role in Mao’s worldview and this was conveyed
to African leaders.
China’s efforts to break out of its diplomatic isolation and its desire to
defeat Taiwan on the recognition front were successfully advanced by its
relations with African countries. Regarding the latter, to accomplish this,
Beijing made acceptance of its one-China policy almost mandatory—
usually the only condition China put on its aid in Africa. Most African
countries did not mind. In fact, China’s efforts to isolate Taiwan were more
successful in Africa than elsewhere. Furthermore, Beijing created a kind of
bandwagon effect or a situation wherein granting China diplomatic ties and
abandoning Taiwan was equivalent to opposing the Western powers (since
the United States supported Taiwan).
China’s aid giving to isolate Taiwan is assessed in detail in Volume 2,
Chapter 4. Suffice it to say here the numbers tell the story. In 1968 only
18 African countries had diplomatic ties with Beijing; by 1980 the number
was 49.338 China giving aid to African nations and they establishing formal
diplomatic ties with Beijing were, in a host of cases, closely related; or China
aid was a reward. Any way the cause and effect relationship was obvious.339
The same situation obtained regarding Beijing’s bid to get the China
seat in the United Nations. Twenty-seven African countries voted for the
Albanian Resolution to grant Beijing the UN China seat. African countries
accounted for more than one-third of the votes China received. It seemed
quite apparent that China’s aid made the difference.340 Certainly it looked
as if this view was confirmed when the delegation from Tanzania (China’s
largest aid recipient in Africa) danced in the aisles of the UN General

Assembly after Beijing was given the China seat in the UN.
China won the support of African countries on a number of other issues
important to China. Most African countries took China’s side on its going
nuclear (and violating the Nuclear Nonproliferation Treaty in doing so),
China’s continued nuclear testing, national sovereignty, human rights, gov-
ernance, etc. One can say that China’s aid made a difference; though on
many of these issues African countries agreed with China.
In the process of winning over Africa, China became a spokesman for
developing nations. After all approximately half of developing countries in
the world were African. As the only developing country that was a per-
manent member of the UN Security Council (and having veto power over
many United Nations issues) China, it was said, was the poor countries’ rep-
resentative. Beijing’s views on commodity cartels, support for a new interna-
tional economic order, giving developing countries some of the profits from
exploiting resources on the oceans’ seabeds (through the United Nations or
some other international organization), and more aid to restructure poor
countries’ economies won the support of African countries. China thus
enhanced its global image by promoting itself as at once the Third World’s
advocate in the UN and the only major aid giver that was also a developing
country.341 When Chinese leaders spoke of China’s aid and investments as
building “South-South friendship,” Africans heard.
Related to this, it seems counterintuitive, but China demonstrated very
little interest in promoting Communist parties in Africa. Mao and his col-
leagues knew this would likely have evoked a backlash; in any case Chinese
leaders felt Africa was not ready for Communism. As a matter of record China
did not officially try to set up a single Communist party in Africa.342
China’s support of the Tan-Zam project and its aid to Algeria, Mali, and
Guinea indicate that China gave much of its foreign assistance to countries
that opposed the international order, even though African countries’ views
were often not consistent with China’s ideological views. But early on there
was one commonality: China was anti-status quo and so were most African
countries. This, of course, changed. By the mid to late 1960s (perhaps due
to Chinese leaders’ negative view of the Cultural Revolution) China saw
that its revolutionary model did not apply to Africa. China thus adopted a
different and more patient strategy to impede expansion of the superpowers’
global presence and influence (with which Africans agreed).343
Did China improve its global image and enhance its status as a big power
through its aid to Africa? The answer is generally yes. China had a number of
advantages. It was not a player in Africa before it began giving aid to African
countries. It was not seen as an imperialist or colonialist power, and it was
not associated with most of Africa’s ailments or perceived ailments. China’s

successful revolution against the pro-Western Chiang Kai-shek impressed
African countries, as did its hostile stance toward Western imperialists and
their world order. China thus had the respect of African nations.
China gained a favorable reputation for opposing imperialism, colo-
nialism (and neocolonialism), and also racism. China stood quite consis-
tently against all of them though its stand against racism was more lasting.
Opposing the white colonial regimes, China, in fact, stood out. China was
not identified with the former European colonial regimes in the minds of
Africans. The United States, Europe, and the Soviet Union were the “guilty
nations” according to the Africans and China played the race card well. The
Chinese propaganda machine portrayed the United States as racist due to
the problems that blacks encountered there. In their dealings with African
countries, Chinese officials often cited their common situation, mentioning
our “black and brown-skinned brothers.”344
Chinese leaders, both for reasons of prestige and the fact that they per-
ceived China’s economic experience applied to Africa, gave aid. Using aid
China also promoted its economic model in Africa. This worked well in
some ways; in some it did not. Advancing agricultural productivity in cer-
tain countries and at certain times it was a resounding success.345 However,
trying to teach African countries either the theory or the implementation of
China’s Maoist economic model failed. After the Great Leap Forward and
later with a self evaluation of its disappointing economic performance dur-
ing the Maoist period, African leaders found less to emulate.346
China’s foreign aid to African countries was intended to foster trade and
other commercial relations. In a number of cases China’s trade with these
African countries increased at the time it began giving foreign aid and con-
tinued after.347 Aid was clearly critical in fostering increases in commerce
with some countries. Tanzania, Mali, Uganda, and Sudan witnessed mean-
ingful trade increases with China as a result of aid.348 Yet China’s aid to
other countries, such as Algeria, Somalia, the Central African Republic, and
the Congo, did not do much to stimulate trade relations.349 Overall it seems
fair to say that China’s foreign aid was only marginally successful in pro-
moting trade. China gained a bigger piece of the Africa trade pie, but still it
hovered around little more than 2 percent of Africa’s trade up to the second
period in China’s aid giving.350
It should be noted that the effect of China’s aid on building trade rela-
tions was greatly helped by the fact that China provided a considerable por-
tion of its aid in the form of Chinese products. Otherwise trade would not
have increased as much as it did. Thus it is fair to conclude that China’s for-
eign aid helped China diversify its trade, as Beijing sought to do especially
after the break with the Soviet Union in 1960.351 China’s foreign assistance
obviously developed markets for its products in Africa. Quality was less
a concern in most African countries. This was on the minds of Chinese
leaders during period two of its aid giving when they found that market-
ing Chinese goods helped keep unemployment at bay and helped maintain
social stability in China.
How about China’s large aid projects? There were very few of them; per-
haps only one. Nevertheless China demonstrated to Africa and the world that
it had the funds, technology, and the will to build a huge aid project when
it undertook, and finished, the Tan-Zam Railroad. It demonstrated vividly
China’s commitment to Africa and a determination to gain a foothold from
which the Soviet Union could not dislodge it. Yet, as noted, China experi-
enced problems in doing the project. It did not prove economically profit-
able, though arguably this was not China’s major consideration. Chinese
leaders were no doubt pleased with their decision to build the Tan-Zam
Railroad at the time. Yet Chinese decision makers turned down requests to
build other big projects: a railroad between Guinea and Mali and a dam on
the border between Mali and Senegal.352
China showed an interest in Africa’s wealth of resources: copper, cobalt,
uranium, and industrial diamonds, to name a few. It wanted to deny these
to the West and get what it needed for itself.353 However, due to China’s
slow economic development, the reactions of Western countries, competi-
tion with the Soviet Union, and for a number of other reasons it did not suc-
ceed to any degree in this effort. That would be left to phase two in China’s
foreign aid giving.
Did China give aid to too many countries and spread itself too thinly?
By the early 1970s, China had aid projects in 45 African countries.354 By
1975, China had more aid programs going in Africa than the United States
did.355 Certainly Chinese leaders were torn between trying to do a lot to
establish a good reputation in Africa as opposed to concentrating efforts and
establishing bases of operations.356
What are the special lessons to be gleaned from this period of China giv-
ing foreign aid to African countries? Especially noteworthy are general ideas
about China’s aid that grew during this time that have application to the
next phase of China’s aid and investment diplomacy.
One is that China forged its early foreign aid principles largely in the
context of it aiding African countries. The principles were both anti-West
and anti-Soviet in their tenor. China wanted to make a statement that its
aid was different: without conditions, not exploitative, generous. Chinese
leaders wanted to also publicize the fact that they paid their aid advisors
and workers according to local standards and required them to live in the
same conditions as the residents. China did not want to involve itself in
the domestic affairs of recipient countries and did not want to encroach on
their sovereignty or preach to them. This created quite an impression among
Africans. These principles have to a considerable degree stuck.
Another is, as noted, in the course of its aid giving China initially favored
African countries that were socialist or socialist inclined. But this did not
last. As China’s views about economic development changed after Mao’s
death and it pursued a free market, free trade path to growth, so its views
changed about foreign and and investments. It was also obvious to China’s
foreign assistance decision makers that the African countries that pursued
socialist policies were the least successful economically. In fact, it has been
said that China’s African experience may have been a factor in China’s sup-
port for socialism waning both at home and abroad. Finally, China pursued
advancing its global footprint and its international image and power with
aid. Its aid thus needed to register successes. As will be seen in the next
chapter, during the Deng era, China shifted completely away from promot-
ing socialism, or even larger public sectors, in African countries.
Last but not least, China’s general poor economic performance during
phase one was recognized as an impediment to its giving more aid and its aid
having a larger impact. This situation changed during phase two of China’s
aid giving as will be seen in the next chapter.357 Chinese leaders came to
fully understand that the amount of its aid mattered.
CHAPTER 2

Diplomacy to African Nations—II
Introduction
In the late 1970s, China dramatically reduced its foreign assistance to nations
on the African continent and did not restart its giving in a meaningful way
until the 1990s and after. The cutback in aid to African nations was much
starker than other regions mainly because Africa was more distant and hence
China’s security and other interests there were less vital. In addition, China’s
support for wars of national liberation, which had earlier motivated China’s
aid giving in Africa more than other areas, was ended. Finally, China no
longer wished to help socialist regimes of which there were many in Africa.
When China reignited its foreign assistance to African countries its
guidelines (or approaches) and goals were vastly different from phase one.
Foreign assistance agreements became much larger, especially investments.
Much more aid was pledged for the purpose of gaining access to energy and
natural resources and for opening markets to Chinese products.
However, compared to period one, China’s arms aid declined markedly in
importance. Also after 2008, China was less interested in isolating Taiwan
(having already accomplished that). Yet getting support for China’s foreign
policy in the United Nations and elsewhere remained important; in particu-
lar Beijing wanted support for its positions on governance, human rights,
economic development, and some other issues. African countries were gen-
erally receptive. China purveyed some assistance through international
organizations; however, most of it was given bilaterally or through regional
organizations wherein China was involved. China’s dealings with Africa saw
these changes apply.
Unlike China’s foreign aid to African countries during period one, much
of China’s foreign assistance in very recent years (especially if aid is seen to
include investments) has consisted of huge pledges that do not specify coun-
try recipients. In many cases the details were to be worked out later. Large
amounts of Chinese money went to create economic zones. In addition, con-
siderable aid has been given in the form of debt cancelation. Finally, China
lowered its tariffs to African countries to allow them market access to facili-
tate their economic development and/or to reduce serious trade imbalances.
China’s foreign assistance has facilitated economic growth in recipi-
ent countries in Africa much more than was the case during phase one. In
fact, observers credit China’s aid and investments with the unprecedented
economic growth Africa has witnessed of late. Meanwhile, China has been
competing with the West in the financial help it has offered African coun-
tries; in recent years it has been much more competitive by it not only being
generous and giving aid without conditions, but also its magnitude has out-
paced others. No longer is China “run out” of African countries by larger
donations from the United States or the Soviet Union, or any other country.
China is seen as a big donor—by many, as the biggest.
Western countries and various international bodies have been critical of
Chinese aid to Africa more than elsewhere, to some degree out of resentment
of China being a newcomer with large financial resources, but also because
China has not abided by their rules. In some cases because China has set its
own rules. Or because China eschews policies that link assistance to human
rights and governance. China is also big risk taker in extending aid and
investments to gain resources and to build projects where there are serious
obstacles and risks.
African countries, especially their leaders, have praised China’s foreign
aid and investments, often profusely, saying that China has truly helped
countries on the continent to develop economically, that its financial help
is unencumbered by unreasonable delays and conditions, and is, in short,
more efficient. Local citizens have expressed gratitude for Chinese aid, but
have also, at times (more frequently than their leaders), found fault with it.
China’s New Africa Policies and Foreign Aid

Before examining China’s foreign aid and investments extended to African
countries during period two, it is instructive to look at China’s new and
much changed Africa policy that evolved prior to and during this time.
This will serve as the basis to understand China’s revised foreign assistance
policies: its large but vague aid pledges (that have to be taken seriously as
they are being fulfilled and no doubt will continue to be); how its aid and
Aid and Investment Diplomacy to African Nations—II ● 45
investments have worked in tandem and/or are linked; and how China’s
growing need for energy, resources, and markets has impacted its economic
relations with African countries. One also needs to consider China’s African
aid and investment policies in Beijing’s search for security and its global
ambitions.
As noted in Volume 3, Chapter 1, both China’s interest in Africa and its
foreign aid extended to African countries declined at the end of phase one
of its aid giving. The prelude to this was the Cultural Revolution (1966 to
1976), which resulted in extremism in China’s foreign policy and consequent
blowbacks in various parts of the world—including in Africa.1 During the
early years (the violent phase) of the Cultural Revolution, China tried to
promote Maoist-style revolution in some African countries. This was not
well received and resulted in China’s foreign relations experiencing a number
of setbacks.2
There were other explanations for China’s reduced interest in Africa.
After 1969 China changed its policy toward the United States and sought a
rapprochement with Washington. In this context, power, or strategic rela-
tions, became more important (as good relations with the United States were
used to counter the Soviet threat). In addition, its rapprochement with the
United States perforce made China less an anti–status quo power opposed
to the existing international order.3
Even more important, China, under Deng Xiaoping (after 1978), focused
on its own economic growth. China thus allocated capital, which might
otherwise have gone to foreign assistance, to its domestic development. The
scaling down of Beijing’s interest in African countries at the onset of the
Deng era was also predicated on the reality that Africa’s economic develop-
ment was not proceeding successfully. Hence, to China’s new leaders, Africa,
more than other places in the world, was not relevant to its economic plans.4
Meanwhile, Maoist tenets of China’s foreign policy, especially helping Third
World countries in order to undermine Western imperialism, were scrapped.5
Finally, as noted in the previous chapter, when Deng came to power Mao’s
policy of supporting wars of national liberation forthwith ended.6
Yet another cause for China’s fading interest in Africa was that by the
mid-1980s, Chinese leaders perceived that there was no longer any point in
trying to undermine Soviet policy in the Third World (including Africa).7
China’s anti-Soviet policies had not worked very well in the sense Beijing
had not accrued much benefit in furthering China’s national interests. The
“Soviet factor” in China’s foreign aid giving thus fast diminished.
Meanwhile, China’s extensive borrowing and taking grants from global
financial institutions and investments from Western countries hurt African
countries more than underdeveloped countries elsewhere and engendered
more displeasure with China.8 China also had some difficulty relating to
African countries in view of its rapid economic growth compared to African
countries that were not doing well.
Putting its set of new foreign policy guidelines in perspective, one writer
described China’s new policy toward Africa as shifting from intense activ-
ity in the 1960s and into 1970s followed by a decline in interest to outright
neglect in the 1980s.9 This is no doubt an accurate description. In response,
African leaders began to change their views (meaning they became less posi-
tive and less friendly) toward China.10 There were even some incidences of
open hostility.11
Overall, however, China’s diminished concern with Africa did not result
in a commensurate loss of image or influence.12 China enjoyed a gener-
ally good reputation with most African leaders based on its earlier policies
of supporting African independence, its stance in opposition to the white
regimes on the continent, and its expressions of help for African causes
in the context of a decline in US and European commitments to African
countries.13 African countries also now admired China for its ability to
engineer rapid economic growth and create prosperity. Furthermore, China
continued to give aid, if in much smaller amounts.14 Then, in the 1990s,
China “rekindled” its interest in Africa. However, it was not until 2000
and after, especially in 2005 and 2006, when China’s current “African aid
offensive” began.15
It is important to point out that there were some important positive
changes in China’s Africa policy made before this that helped China to suc-
cessfully pursue a new, vastly different, and largely fruitful Africa policy.
One was the fact that China abandoned the ideological basis of its for-
eign policy; it was replaced by pragmatism (as was discussed in Volume 1,
Chapter 2). This saw its application to China’s relations with Africa in late
1977 when the Chinese Communist Party Politburo decided to deal with
various political parties in Africa, not just Leftist or Communist parties.16
Relations with Africa’s various political parties grew quickly after that.17
Two, during the early 1980s Beijing undertook a major reassessment
of China’s foreign policy in Africa. Chinese leaders were encouraged
by Zimbabwe’s gaining independence in early 1980, seeing it as a water-
shed event and one that encouraged neighboring countries’ struggles for
independence.18 After 1982, when China proclaimed a foreign policy of
“independence and nonalignment” (toward either of the superpowers),
Chinese officials reiterated their stand that China is a Third World country
and focused on Third World issues. African leaders noticed and appreciated
this and the fact that China expressed more concern about global economic
development.19
In late 1982 and early 1983, Premier Zhao Ziyang visited 11 African coun-
tries. Not since Zhou Enlai’s trips in the 1960s had a Chinese premier gone
to Africa. Zhao’s visits were especially important because they happened
in the context of China recalibrating its foreign policy to adopt a neutral
(cum fulcrum) position in relations with the United States and the Soviet
Union.20 As Beijing ended its feud with the Kremlin and shifted from a less
pro-American posture China sought with even greater élan to improve rela-
tions with many more African countries.21
When Zhao was in Africa, he set forth what he called the Four Principles
in Economic and Technological Cooperation. The principles were: 1. China
attaches no conditions to its cooperation and demands no privileges. 2.
Development projects should yield good economic results with less invest-
ment. 3. Contracts should be observed, the quality of work guaranteed,
and friendship stressed. 4. Economic and technological cooperation should
contribute to self-reliance on both sides.22
Not mentioning foreign aid or investments and instead citing self-reliance,
it was apparent that China was not going to spend much money to help
Africa. China would give some aid, but Beijing hoped to maintain good
relations and even build better ties, without offering much aid. Foreign aid
figures indeed indicated China had downgraded Africa in terms of its geo-
political interests; though some observers argued that this was not signifi-
cant as China was simply biding its time as its economy grew and with that
also its foreign exchange.23
In the mid-1980s, pragmatism became even more evident in China’s
Africa policy: Chinese leaders spoke to African countries about equality and
partnership, but did not offer much foreign aid.24 Chinese leaders warned
African leaders about embracing socialism as a development model.25 At this
time few Chinese leaders visited Africa.26 China, however, did maintain an
aggressive policy, verbally at least, against South Africa while offering sup-
port of various kinds to the African National Congress and the Southwest
African People’s Organization (SWAPO) and in other ways backing change
in southern Africa.27
Following the Tiananmen Square “incident” (generally called “mas-
sacre” in the West) in June 1989, the United States and European coun-
tries assailed China for its human rights abuses. Most African countries
did not. The West imposed sanctions against China; African countries did
not. Notably some African leaders openly expressed sympathy for Beijing’s
way of dealing with the pro-democracy advocates. Angola’s foreign minister
expressed support for the Chinese government’s “resolute actions to quell
the counter-revolutionary rebellion.”28 Namibia’s president Sam Nujoma
sent a telegram to the Chinese government congratulating China’s army.29
China received messages of support for dealing with its “problem” success-
fully from the chairman of the South-West African People’s Organization
and from Algeria’s Pan-Africanist Congress.30
Chinese leaders were pleased with African leaders’ reactions, especially
when contrasted with Western countries that responded so negatively.
In fact, Beijing began looking at Africa quite differently at this juncture.
Shortly after the Tiananmen events, Foreign Minister Qian Qichen made
an African tour and received a warm welcome in the countries he visited.31
Qian said that during his trip he explained the situation as one of China
“putting down a counter-revolutionary rebellion”; African leaders, he noted,
expressed an understanding of the necessity for this.32 China’s media sub-
sequently spoke of “sympathy and support” from Third World countries
and suggested China would put more efforts into “developing relations with
these old friends.”33
Post Tiananmen, China indeed saw Africa in a new light. Chinese lead-
ers thus decided to try to further develop deeper relations with African
countries.34 In fact, it has been said that China’s optimism about its rela-
tionship with Africa may have, at this critical juncture when China seemed
on the verge of turning inward, had a positive influence on China’s decision
to keep its open door policy and its economic development plans based on
globalism on track.35
In any event, in the 1990s China began paying much more attention
to Africa. China’s foreign assistance influence in Africa in relative terms
increased during the 1990s because the Soviet Union’s aid declined markedly
with its collapse in 1991. In fact, Soviet aid almost disappeared in Africa.
Meanwhile, the end of the Cold War removed one of the main motives
for Western nations to give aid, while at the same time “donor fatigue”
had set in in the West. Overseas development aid fell from 0.38 percent of
Western countries’ GDP in 1982 to 0.22 percent in 1997. In dollar terms,
the aid African countries received from developed countries fell from a
high of $17 billion to $12 billion in 1999. Private investment made up for
some of this loss, but Asian and Latin American countries were the largest
beneficiaries—not African countries.36
In 1995, Zhu Rongji, who became premier three years later, visited Africa.
Zhu was told about the problems the Tan-Zam Railroad had encountered
and he promised to do something about it.37 President Jiang Zemin toured
Africa the next year at which time he set forth a “five point proposal” for
development and cooperative relations between China and Africa. President
Jiang also mentioned a China-Africa summit conference.38 Reading the
details of these pronouncements there was a clear shift in China’s African
policy away from ideology.39
In October 2000, at a summit meeting held in Beijing with 45 African

leaders present, President Jiang launched the Forum on China-Africa
Cooperation (FOCAC). FOCAC embodied the principles of mutually ben-
eficial economic development, trade cooperation, improved political rela-
tions with Africa, and South-South cooperation.40 One of the main themes
Chinese leaders expressed at the meeting, which was quoted widely in the
Chinese media, was that “Africa is the region with the largest number of
developing countries, China is the largest developing country in the world.”41
In the next few years more than a 100 African leaders visited China while
top Chinese leaders visited 35 African countries.42
In 2003, the second FOCAC meeting was convened in Ethiopia. The
gathering was held in conjunction with a Sino-African business conference.
China put forth a foreign aid action plan promising to work with Africa in
the areas of infrastructure development, health care, human resources, and
private sector agricultural development.43 That year President Hu Jintao
visited Africa and set forth his “six pillars plan” to set the stage for more
extensive relations with Africa. In 2005, he added what became known
as the “Three Principles” in China’s relations with African countries.
Hu called on the international community to pay more attention to Africa
and promote “fairer” aid that China was more serious about.44
In January 2006, China’s Ministry of Foreign Affairs published the coun-
try’s first ever policy paper on Africa titled “China’s African Policy.” The paper
noted that China’s interests lie in promoting peace and development, which it
read are the “main themes of our times.” It advanced the ideals of friendship
and equality, mutual benefit and support, and learning from each other in
pursuing development. The authors of the publication pledged more Chinese
efforts to increase trade, invest in Africa, and provide economic assistance.
Regarding foreign aid specifically, it said: “In light of its own financial capa-
bility and economic situation, China will do its best to provide and gradually
increase assistance to African nations with no political strings attached.”45
The document mentioned specifically certain kinds of economic help
such as agriculture, infrastructure, resources, debt reduction, and tourism.
It cited the Forum on China-African Cooperation and its role in promot-
ing China-Africa relations. It lauded the African Union.46 The policy pro-
nouncements in this paper reflected an effort on China’s part to be humble,
suggesting that China’s economic approach was one of cooperation and
mutual benefit; yet it was also open-ended reflecting China’s now favor-
able, cum large, foreign exchange position. China seemed poised to increase
markedly its financial help to Africa.
In mid-year President Hu Jintao visited three African countries. Shortly
thereafter Premier Wen Jiabao made a trip to seven countries. In November
China invited almost fifty heads of state from African countries to a sum-
mit to celebrate fifty years of China’s relations with Africa. President Hu
spoke at the meeting, mentioning the struggle against subjugation, freedom
and liberation, human dignity, and economic development.47 At this junc-
ture Beijing announced establishing the China-Africa Development Fund
that would provide $5 billion to encourage Chinese companies to invest in
Africa. From 2006 to 2007 President Hu visited seventeen African countries.
No other world leader had ever done this.48 Meanwhile, Foreign Minister
Li Zhaoxing visited the Comoros Islands in 2004 and Cape Verde in 2006;
these countries had seldom received attention from a major world power.49
Wu Bangguo, the head of China’s legislature, visited Madagascar and the
Seychelles in 2008.50
In 2009, Hu Jintao traveled to Africa for the sixth time since he became
president. Previous to this the Western media had characterized Chinese
leaders’ visits to Africa as missions to get natural resources and had often cited
China’s relations with undemocratic nations. Hu stopped in Mali, Mauritius,
Senegal, and Tanzania. Noteworthy, none of these countries was a major
target in China’s search for natural resources; all were more democratic than
most African countries. Mauritius was located strategically relative to China’s
effort to increase its influence in the Indian Ocean.51
In 2010, various high-ranking Chinese officials visited African countries.
They offered additional support for FOCAC, strategic alliances, and more.
Vice President Xi Jinping, slated to assume the top position in the Chinese
leadership in 2012, visited South Africa and spoke of advancing ties with
the African continent.52 In early 2014, Xi, in his very first trip abroad as
president, went to Africa. This vividly underscored China’s commitment to
the continent. Observers around the world noticed.
It was also noteworthy that prior to President Xi’s visit China sent 170
combat troops to the UN peacekeeping mission in Mali. China also engaged
in activities in South Sudan to bring about mediation of a conflict there. In
January 2014, China’s foreign minister Wang Yi publicly called for an end to
hostilities. He also traveled to Ethiopia at the invitation of the government
to dampen or end the fighting there. All of this led to speculation that China
was abandoning its policy of noninterference to protect its overseas economic
interests.53
China Renews Its Financial Help to Africa

As noted, during the early years of period two, China’s foreign aid giving mir-
rored major shifts in its domestic economic policies. Chinese leaders focused
on China’s own development. They needed capital at home for this. China’s
new economic development strategy, which was essentially capitalism (as

discussed in Volume 1, Chapter 3), meant that Chinese leaders had little
sympathy for socialist policies or socialist-leaning countries.54 Meanwhile
foreign aid setbacks in Albania and Vietnam discredited China’s foreign aid
giving in the minds of Chinese leaders. Many felt Mao had been overly gen-
erous toward other countries; foreign assistance thus was unpopular. All of
this affected China’s thinking about giving aid to African countries.55
In the late 1970s and 1980s, China’s foreign aid giving to nations in
Africa diminished to a trickle. According to one writer, between 1976 and
1982 total Chinese aid pledges to the continent fell from $100.9 million
annually to just 13.8 million.56 From 1979 to 1981, China announced only
eight new loans. Chen Muhua, China’s minister for culture and the official
most often cited concerning foreign aid giving, said that China would be
“spending less . . . ”57
At one point China even cut back on its medical missions. Between 1978
and 2003, China sent few doctors (a cheap form of aid) to Africa and report-
edly sent none in 1979 and 1980.58 As aid dropped off Chinese officials
talked of South-South cooperation and locals contributing to the upkeep of
projects and providing spare parts. Chinese officials said they had less time
to visit Africa.59 China’s aid policy during this time was described as the
“maintenance of political influence with minimal financing . . . ”60
Very noticeable during these years were instances when China turned
down requests to provide aid to African countries. For example, Beijing
declined a proposal to build a railroad connecting Guinea and Mali and
a dam on the border between Mali and Senegal. Apparently, China did
not want to undertake any large projects or make any commitments that
could prove expensive.61 China gave very little aid to Nigeria, the biggest
(by population) and arguably the most important country in Africa.62
As mentioned China also eschewed getting involved in civil conflicts
in Africa. In earlier years China would have readily defined a civil con-
flict as a war of national liberation and rendered aid. China did little more
than express concern during the civil war in Liberia in 1990. A few years
later, during a domestic conflict in Chad, China stopped supplying arms
and instead backed unity policies. Beijing supported the Organization of
African Unity on mediation of disputes such as that between Senegal and
Mauritania, instead of getting involved in it. In a conflict between Namibia
and Angola, China backed UN Security Council actions. China approached
the hostilities on the horn of Africa in a similar way. In short, China wanted
to see conflicts dampened or resolved to avoid any involvement in them.63
As China’s new leaders made plans to restart China’s foreign aid giving,
they began to think in terms of the advantages foreign aid might accrue to
China in its drive to develop economically. The models they looked to were
Japan and the West.64 Both had tailored their foreign aid giving to their needs
for energy and natural resources and their desires to market their products
abroad to reduce unemployment at home. In fact, China’s government-run
news agency said in 1980 that China would use foreign aid funds to “boost
production and exploit natural resources.”65 There was some debate about
ending foreign assistance; but that was ruled out. Instead, Chinese leaders
said aid would be set at “realistic levels” and that there was a moratorium on
extravagant projects.66
In 1982, Premier Zhao Ziyang visited Africa as noted in the previous
section. He spoke of the “path of South-South cooperation.” He set forth
four principles to serve as the basis for China’s relations with developing
countries. None of the principles mentioned foreign aid. Zhao did not even
use the word “aid.”67 One of the principles that Premier Zhao cited dur-
ing his trip was getting practical results. Accordingly, that year when the
Liberian government asked China to rehabilitate a sugar cane plantation
and a factory, China, rather than pledging aid, sent a study team. The
team reported the project would require a $3.6 million annual subsidy to
make it operate efficiently and suggested Liberia look for “more profitable”
ventures.68
Yet Zhao on his trip spoke of the need for debt forgiveness. Following
up on this idea, China cancelled 10 percent of Zaire’s $100 million debt.
Zhao also oversaw the transfer of another 10 percent of Zaire’s $100 million
debt owed to China into a debt-equity swap with China holding shares in
joint ventures. This “privatization” of debt was done in part by Chinese
companies leasing former aid projects and restoring them.69 China also gave
Tanzania and Zambia a reprieve from paying their $500 million debt for ten
years.70 Later the government sent “aid funds” directly to Chinese corpora-
tions (that incidentally made bids on aid projects).71 At this time China also
agreed to repair, renovate, or recondition some aid projects that were not
working or needed attention. In fact, the ratio of fixing projects compared to
starting new ones was three to one. In Tanzania, China pledged to renovate
36 former aid projects.72
Another new policy for China vis-à-vis Africa was its recognition that
Africa suffered not only from economic problems per se, but a brain drain
due to talent poaching by Western countries and global economic aid orga-
nizations. Chinese leaders reckoned that China could help deal with these
problems. Most important, this aspect of China’s help to African develop-
ment could be done without China spending much money. Beijing at this
juncture promised more training for Africans, focusing on sending medium-
and higher-level officials for longer periods of time.73
Another innovative Chinese policy, but one that many African leaders
were hesitant to support because of their desire to control patronage jobs,
was having Chinese managers put in charge of or placed in positions to
influence local state-run enterprises. The rationale was to keep projects via-
ble and working; many were not.74 China’s ideas worked very well in some
cases; Sierra Leone and Mali were good examples.75 Chinese officials also
talked about, and in some cases put into operation, barter trade deals in lieu
of aid.76
The amount of China’s aid remained small through the mid-1980s.
In 1983, China’s State Council convened the sixth National Foreign Aid
Working Conference. The main ideas enunciated at that meeting were:
China should give aid according to its capabilities and should do its best and
that Chinese aid to the poorest countries should be grants and with others
projects and technical aid.77 Indeed China’s aid was helpful in terms of its
conditions; but it remained frugal in the amounts of aid given. In 1984,
according to the Organization for Economic Cooperation and Development,
China ranked number eight in the world in foreign aid giving to sub-Saha-
ran Africa—below Norway.78
But soon China’s aid began to increase substantially.79 Part of the reason
related to the global situation at the time, which gave Chinese foreign policy
makers opportunities. At this juncture the Soviet Union was in economic
trouble and showed a diminishing interest in giving aid, especially to Africa.
The West in the meantime had come to see the African continent as hope-
lessly in chaos and foreign aid not very effective in changing this situation.
Thus China had more and better opportunities to gain influence with for-
eign assistance.80
The first sign of China launching more dynamic foreign aid giving in
Africa was food aid China provided in response to the terrible draught in
Africa in 1984–85. China immediately sent 120,000 tons of maize fol-
lowed by 170,000 tons more.81 China subsequently rendered much more
agricultural aid to African countries. China had recently made technologi-
cal improvements in agriculture at home and did not mind sharing these.
China’s aid reflected what China could do well. By the close of the century
more than 10,000 Chinese agriculture experts working in African countries
had built 200 new projects, including farms, and conducted agricultural
training programs and the like.82
Following up on the sixth National Foreign Aid Working Conference,
by the end of the decade China had provided aid for 2,600 projects in all—
more than a host of Western countries combined. Though the projects were
small the huge number showed that China was once again significantly
playing the foreign aid game.
Another big step forward in China’s financial aid giving to Africa came
after the Tiananmen “event” in 1989 as detailed in the previous section.
Beijing learned that the African countries were not critical of China on
human rights grounds as were Western countries. As a result, perhaps in
gratitude, China’s aid to African countries increased markedly. Specifically
China’s officially announced aid commitments grew from $60.4 million in
1988 to $223.5 million in 1989, to $374.6 million in 1990, and remained
about the same amount in the next two years. The number of recipients
increased from 13 in 1988 to 24 in 1989 and 48 in 1990. It was reported
that around half of the countries receiving financial assistance from China
at this time were in Africa.83
In the next few years China concluded loan agreements with 23 African
countries.84 Among the largest were an oil exploration project in Sudan, two
textile factories in Tanzania and Zambia, a railway renovation project in
Botswana, and a cement factory in Zimbabwe. This aid, one writer opined,
was aimed at stimulating China’s exports.85 In any event, they were done
quickly and efficiently and were well received.
One of the most popular forms China’s aid giving took at this time
was debt relief. During period one China often cancelled or delayed pay-
ment of recipient nations’ loans. During period two Beijing did this again,
except in much larger amounts. As noted earlier, after Premier Zhao’s trip
to Africa, China cancelled part of Zaire’s debt and gave Tanzania and
Zambia a reprieve on their $500 debt. In 2000, China reduced or wrote off
a total of $1.2 billion in debt owed by African countries.86 In 2003, China
wrote off another $750 million.87 This was tantamount to giving a huge
amount of economic assistance. It also had a ripple effect: Some observers
at the time said China’s cancelling African countries’ debts put pressure on
Western countries to do the same.88 In 2002, China provided 1.8 billion in
development aid to African countries. In 2006, China signed trade deals
worth $60 billion. Meanwhile, between 2000 and 2005, China’s foreign
investment to Africa reached $30 billion. As of mid-2007 its investments in
African countries totaled $100 billion.89
It needs to be noted that China’s investments were made using the same or
similar conditions as its aid promises and that the main reasons for employ-
ing the word “investment” for China’s financial help was that the govern-
ment was sensitive to domestic public opinion that was negative concerning
Chinese foreign aid (as noted in Volume 1, Chapter 1).
In 2007, China pledged new loans to or signed technical cooperation
agreements with every country in Africa that it had diplomatic relations
with (except Angola, Equatorial Guinea, Mauritania, and Lesotho, the
former three having received a commitment the previous year).90 In 2008,
China signed bilateral aid agreements with 48 of Africa’s 53 countries and

loan agreements on favorable terms with 22.91 China did not disclose very
many details on its aid to most countries keeping in mind the sensitivity of
the issue if other countries in Africa might make comparisons with the aid
they were receiving.92
It was reported at this time that China had cancelled the debts of African
countries amounting to $1.3 billion, had sent 16,000 medical personnel
to 47 African countries, where they had treated 240 million patients, that
China had provided 18,000 scholarships to African students, had imple-
mented 151 cultural exchange programs, while 110,000 Chinese tourists
visited African countries in 2005 (double the previous year).93
In the later part of the second phase of China’s foreign aid giving, Beijing
was motivated in its aid giving increasingly by its fast growing need for energy
and natural resources. (See Volume 1, Chapter 4.) Africa had both. China thus
pledged both foreign aid and investments (often indistinguishable) to finance
exploration and extraction. (The details are discussed later in this chapter.)
China also sought to sell its products. Africa was a promising market. China’s
foreign aid very much abetted Chinese businesses to sell their wares.
Beijing likewise gave financial assistance to African nations to improve
China’s security. In fact, for Chinese decision makers their drive to improve
China’s national security took on a new dimension: China needed to diver-
sify its sources of oil and other energy and find new and more sources of
various raw materials. This would make China less dependent on certain
areas of the world. Foreign assistance helped fulfill these objectives as will
be seen in the following sections.
Summing up, by the turn of the century China had provided aid to more
African countries than to nations in any other region of the world. China
provided more financial help to Africa than elsewhere if one uses a narrow
definition of aid (to not include military aid and investments). But invest-
ments were growing fast. After 2000 and especially after 2005, many of
China’s investment pledges were very large. Many, especially huge ones,
were made to Africa generally rather than to specific African nations and
did not specify whether China was promising aid or investments as China
did not define either clearly.
Large Aid Pledges to Africa (Not Country Specific)

Beginning in 2000, China made a number of large, some extremely large,
pledges of financial help to Africa. The meetings of the FOCAC were the
main venue. The nature and functions of this organization and the foreign
assistance pledges made at its conferences thus deserve special attention.
FOCAC was established in October 2000 to serve as a platform where

China and friendly African countries could engage in collective consulta-
tions and dialogues on South-South cooperation. One writer described the
organization as an avenue for China to “promote diplomatic relations, trade,
and investment.”94 China subsequently announced most of its very large
promises of financial assistance to Africa at FOCAC meetings.95 China’s
pledges were broad and sometimes open-ended with the details to be worked
out later; but they were very serious and, in retrospect, very generous and
very successful.
The initial meeting of FOCAC was a ministerial conference held in
Beijing from October 10 to 12. President Hu Jintao and Premier Wen
Jiabao of China, a number of African heads of state, 80 ministers, and rep-
resentatives of 17 regional organizations attended. At the conference two
documents were produced. One was the Beijing Declaration of the Forum
on China-Africa Cooperation, which centered on the two sides’ desires to
establish a new international political and economic order and commit to
a long-term partnership to promote equality and mutual benefit. The sec-
ond, the Program for China-Africa Cooperation in Economic and Social
Development, focused on cooperation in the areas of economy, trade, agri-
culture, tourism, science, education, culture, health, and the environment.96
Decisions were also reached to hold follow-up meetings to evaluate decisions
made at previous meetings and to form future agendas for FOCAC.97
More pertinent to this study, at the first conference Chinese officials
announced the cancellation of $1.21 billion in debt owed to China by the
poorest African countries.98 This was the first extension of foreign assistance
(as defined in this study) to Africa of more than a billion dollars. Something
else happened at the same time: Sino-African annual trade passed the
$10 billion mark. Both attracted attention around the world.99 This may
have been a landmark event for yet another reason: President Jiang Zemin
declared at the time that this “should form the political basis for a new
international order.”100
The founding of FOCAC, on the other hand, created further confusion
about how to define China’s foreign aid. China’s aid included what Western
aid officials called grants, interest-free loans, state loans, concessional loans
(commercial in nature), debt forgiveness, currency swaps, tariff reductions
or elimination, and business investments. As noted in Volume 1, Chapter 1,
China’s very broad definition of foreign aid and its use of various terms in
connection with aid giving do not comport with the vocabulary of Western
officials. It has been suggested that China does not want to fit the mold
in aid giving, including even using the standard terms (correctly at least).
Perhaps China could not do so even if it so desired.101 The problem of fitting
its aid into a Western definitional framework was difficult to impossible.

It is even harder in the case of China’s aid to Africa than its aid elsewhere for
a variety of reasons, including the fact that its pledges were sometimes vague
and broad in nature and were to be implemented later. China’s foreign aid
decision-making processes were also another reason for this being difficult.
Finally, African recipients often wanted to change the vocabulary.
Another factor was that China used FOCAC as its primary organiza-
tion for across-the-board financial interaction with African countries. Since
it virtually controlled the organization Beijing could, and did, direct the
discussions of other issues at hand from other bodies to FOCAC. It did
this with the New Partnership for African Development (NEPAD) created
in 2001. NEPAD’s agenda included promoting democracy, transparency,
a free press, independent judiciaries, and rule of law. China supported the
organization, but did so through FOCAC, where it could lead or guide the
debate.102 In other words, China did not seek to isolate or narrow the dis-
cussions over aid; in fact it did just the opposite. Furthermore, Beijing did
not want to tie aid, as was the practice in the West to better governance,
especially to democratization and human rights conditions.
Meanwhile, China put a considerable portion of its aid, medical aid for
example, under the auspices of FOCAC. In 2002, FOCAC conducted a
Sino-African forum on traditional medicine and pharmaceuticals attended
by 21 African nations. In 2003, China sent medical teams to 34 African
countries. China even dispatched medical units with its UN peacekeepers.
China’s “health diplomacy,” as it is called, specialized in treating malaria
and AIDS; by the early 2000s, sending over 15,000 doctors, China had
treated 180 million African patients suffering from HIV/AIDS.103
The second meeting of FOCAC was held in Addis Ababa, Ethiopia, in
December 2003. The theme of the conference was “Pragmatism and Action-
Oriented Cooperation.” Premier Wen Jiabao attended the meeting, as did
ministers from 44 African countries, representatives of the African Unity
Commission, and even the UN Secretary General. A document issued at the
end of the meeting, called the FOCAC Addis Ababa Action Plan (2004–
2006), set forth a program for China-Africa cooperation in trade, social
development, and other areas for the next three years.104 This constituted a
holistic approach to foreign aid.
At this gathering China announced an even larger amount of debt can-
cellation than at the previous meeting: $1.27 billion. Chinese leaders also
pledged zero tariffs to some African countries for their exports to China. In
addition, they announced that China would train 10,000 African personnel
and increase scholarships to African students for study in China. Finally,
they promised China’s support for African countries seeking membership in
the World Trade Organization. In return, 17 Chinese companies were given

the green light to sign a total of 20 contracts worth $460 million. African
participants likewise agreed to push their governments to simplify regula-
tions that applied to Chinese companies operating in Africa.105
If the above-discussed two meetings were important in setting the stage
for improved Sino-African relations and setting forth China’s foreign aid
commitments to Africa, the gathering held in November 2006 in Beijing
was a watershed event. Prior to this meeting China’s ambassador to South
Africa outlined China’s foreign aid contributions through FOCAC up to
that time. He stated that China had fulfilled its debt relief promises made in
2000 covering 31 countries, had provided tariff exemptions on 191 items for
30 African countries, and approved 17 countries as “tourist destinations” for
Chinese. He added that China would give Africa a top priority in influenc-
ing the UN Security Council in ways to help developing countries.106
Further, at the meeting, which was reportedly the largest international
event ever held in China (attended by 48 African delegations and 41
heads of state), President Hu Jintao announced a “strategic partnership”
with Africa under the rubric of FOCAC.107 In ratifying the partnership,
Hu pledged that China would double China’s foreign assistance by 2009,
which specifically included the following: provide $3 billion in preferential
loans and $3 billion in preferential buyers credits to poor African coun-
tries, establish the China-Africa Development Fund with $5 billion, build
a headquarters for the African Union, cancel all interest-free government
loans owed at the end of 2005, increase the number of duty-free items to
enter China from Africa from 190 to 440, create 3–5 trade and economic
zones in Africa by 2009, set up 10 agriculture technology centers in Africa,
build 30 hospitals, provide $40 million for antimalarial drugs, erect model
treatment centers, send “peace corp-like” volunteers to Africa, and double
the number of scholarships for African students to study in China from
2,000 per year to 4,000.108
China’s commitments to Africa made at this meeting were so large in
scope that newspapers around the world were filled with stories about the
meeting and China’s “enormous” pledges. Think tanks and universities held
conferences and seminars to assess what it meant.109 Six months after the
meeting, Li Ruogu, head of China’s Exim Bank, predicted his organization
would commit $20 billion to African countries over the next three years
(World Bank loans to African nations for a three-year period at this time
totaled less than this—$17 billion).110 The meeting held such importance
that it was described by various observers as “the end of the Washington
consensus” and the creation of a paradigm of globalization that favored
China.111
Because China’s financial commitments were so large and so generous

some observers called all of China’s Africa commitments foreign aid.112
The amounts of China’s “aid” (broadly defined to include what are nor-
mally called investments) were exaggerated in the Western media. There
were reports that China’s aid to Africa amounted to three times that of the
rich countries and that China’s loans were triple that of the World Bank.113
There were other inflated claims. This was perhaps natural given the large
and unprecedented scope of China’s aid, its potential for promoting change,
and the likelihood of China giving more based on its bourgeoning foreign
exchange reserves.
Other writers, however, did not exaggerate in calling the 2006 FOCAC
meeting a milestone in China-African relations. Chinese leaders promoted
the five principles of peaceful coexistence and its one-China policy and
both were supported enthusiastically in Africa. China appealed to African
nationalist sentiment that favored more equitable terms for African coun-
tries’ participation in the global system. China also offered “aid without
conditions or strings attached” and “aid that advanced recipients’ national
development without delay.”114
In any event, it was anticipated at this time that China’s foreign aid
pledges would result in China-Africa trade increasing to $100 billion annu-
ally by 2010.115 The next year, in 2007, it was reported that China had erased
the debt of African nations by more than $1.5 billion. By early 2008, the
Ministry of Commerce said that China had honored all of its promises made
at the 2006 FOCAC meeting.116
In addition to the funds promised through the FOCAC, in May
2007 Premier Wen announced a $1 billion capitalization (by the China
Development Bank) of the China-Africa Development Fund (CADFund),
and a total goal of $5 billion to back equity investments and business deals
in Africa.117 According to the CADFund’s chairman, the purpose of this
sovereign fund was to facilitate the Sino-African New Strategic Partnership
and demonstrate China’s “going out” or going abroad strategy.118
According to Bloomberg, the Fund’s investments ranged generally
from $5 million to $25 million and by early 2009 had facilitated around
$400 million in investment in Africa, including such projects as a cotton
planting and processing facility in Malawi, a power station in Ghana, a glass
factory in Ethiopia, and trade zones in Egypt and Nigeria.119 In early 2010
NASDAQ reported that the China-Africa Development Fund had invested
nearly $540 million in 27 projects in Africa and anticipated $3.6 billion
more in investments by Chinese companies.120
In late 2009, the fourth FOCAC conference was convened in Sharm
el-Sheikh, Egypt. At this meeting China announced new measures the
Chinese government would take to strengthen Sino-Africa cooperation for

the next three years. Backing up its promises China pledged $10 billion in
concessional loans plus support for Chinese financial institutions to set up
a fund of $1 billion to help small- and medium-sized African businesses.121
Following up on its aid promises, China provided specific information on
the nature of its financial help. This included aid to agriculture in the form
of technology demonstration centers and technicians. China even allocated
$30 million to the UN Food and Agricultural Organization to set up a fund
to support cooperation between China and African countries. Monies were
also earmarked to build schools and help African nations deal with their
brain drain problem. Part of the pledge included financing to promote trade
and tourism, to deal with natural disasters, to increase cultural contacts, and
much more.122
In 2010, looking at the ten-year history of FOCAC, a Chinese source
reported that the organization comprised China and 49 African countries.
Owing to the scope of financial aid dispensed and various other activities
of the organization China-Africa trade reached $108 billion in 2008, sur-
passing the $100 billion goal ahead of schedule. In 2009, China became
Africa’s largest trading partner. Meanwhile FOCAC provided an alternative
to Western aid and trade and helped promote the Chinese model of devel-
opment; in particular it boosted Africa’s international profile and allowed
African countries to diversify their foreign relations.123
The fifth ministerial meeting of FOCAC was held in Beijing in July
2012. President Hu Jintao addressed the meeting and announced five new
measures in China-Africa foreign assistance relations: expanding investment
and financing to support sustainable development in Africa, increasing other
assistance to Africa, supporting the African integration process and helping
enhance the capacity of overall development, enhancing people-to-people
friendship, and promoting peace and stability in Africa. Two documents
came out of the meeting: The Beijing Declaration and the Beijing Action
Plan. The former was a political document that assessed China-Africa rela-
tions and policies on regional and international issues by the two sides. The
latter laid out cooperative programs for the next three years.124
Hu announced China would provide $20 billion in new credits to African
countries (as part of the Beijing Action Plan.125 The credits were earmarked
for helping agriculture and infrastructure and supporting the development
of small- and medium-sized businesses over the ensuing three years. The
pledge was double the amount of China’s help promised at the last FOCAC
meeting in 2009. Jacob Zuma, president of South Africa, praised China’s aid
and said it was preferred to the help Africa got from Europe. One American
writer noted that no country had ever launched anything like FOCAC.126
Most observers expected China to continue to provide Africa large doses

of aid and investment funds through FOCAC. The next FOCAC meeting
was scheduled for December 2015.
China’s Support for Economic Zones in Africa

China’s aid pledges made within the framework of FOCAC included build-
ing economic zones in Africa; this took considerable funding and were
quite effective in promoting economic growth. For Chinese leaders the idea
was this: China had built what it called special economic zones or SEZs
in China as part of Deng Xiaoping’s reforms in the late 1970s designed
to attract foreign capital and foster economic growth.127 These SEZs had
been a resounding success in stimulating economic growth utilizing private
initiatives based on profits (which to China was now the preferred method
for economic development).128 Building such zones abroad would expand
China’s trade opportunities and in the case of Africa facilitate China’s
domestic industrial restructuring to move up the value chain.129 Chinese
leaders saw their experience as constituting a model applicable for helping
other countries develop.130
In 2006, as part of China’s eleventh five-year plan and comporting with its
“going global” or “going out,” Chinese leaders said China would help estab-
lish “economic and trade zones worldwide.” At the FOCAC meeting held
in November that year, Chinese leaders promised that three to five would
be located in Africa. Chinese leaders saw Africa as an especially appropriate
place for them.131 This effort, in fact, took a large portion of the foreign assis-
tance that China promised during the FOCAC meeting in 2006.
China’s plans seemed very ambitious, perhaps even grandiose. The zones,
Chinese officials said, anticipated the economic integration of East Africa,
the Middle East, and Asia not seen since the arrival of the Portuguese in the
fifteenth century. They would create thousands of jobs and would alleviate
poverty in Africa. At the time Chinese leaders talked about building dams,
roads and railroads, even a rail line that would cross the African continent.132
The zones, if successful, would justify these and other projects.
Beijing, of course, had various other motives for promoting and financing
economic zones. These included dealing with the risk of a backlash in the
form of protectionism against China’s exports, helping Chinese enterprises
penetrate undeveloped markets, minimizing the general risks to Chinese
firms operating in Africa, and clustering enterprises.133 The zones were also
intended to help China’s domestic economic restructuring (in recognition
of rising labor costs in China) since the zones would allow China’s labor-
intensive but now less competitive industries such as textiles, leather, and
building materials to move offshore.134 China also sought to use the zones
to facilitate its search for energy and natural resources.
Ten African countries immediately expressed an interest in hosting one
or more of the zones. China’s Ministry of Commerce meanwhile decided
that Chinese companies would take the lead and bids were opened that
year and in 2007. More than 120 Chinese companies proposed projects.
Seven zones were picked in African countries: in Algeria, Egypt, Ethiopia,
Mauritius, Nigeria (two), and Zambia. Some countries applied but were not
accepted—because only the best tenders were selected.135
The first SEZ was established in Zambia in 2007. One of the main rea-
sons China chose Zambia as the site for its first African economic zone
was China’s previous aid to Zambia. China had extended extensive foreign
aid to Zambia during phase one of its aid giving as noted in the previous
chapter, including China’s largest project during that time, the Tan-Zam
Railroad, plus considerable funds for developing mines. In 1982, China’s aid
to Zambia was put in high gear once again. Chinese technicians launched
one of China’s biggest projects ever: a 2,804-meter long bridge in central
Zambia. In 1983, China built a 60,000-ton maize mill and rescheduled
$7 million in debt Zambia owed China.136 In 1984, China provided money
to build a party headquarters in Zambia.137 Aid continued to flow through-
out the late 1980s, though in lesser amounts.138
In 1989, after the Tiananmen Square incident China provided more
foreign aid to Zambia. This included a $1.2 million brick factory, a medi-
cal clinic, and some other projects. In 1993, China pledged $2.0 million
in hospital supplies and engineering equipment.139 Beijing sought support
to repair its global image after June 1989 and Zambia could help. In fact,
Foreign Minister Qian Qichen visited Zambia in July (the next month
after the event). The Zambian government welcomed him and not only
did not criticize China over Tiananmen but accepted China’s interpreta-
tion of what happened. The following summer Zambia’s prime minister
even expressed satisfaction that the political situation in China remained
stable.140
President Kaunda, one of China’s closest friends, lost reelection in 1991;
nevertheless China-Zambia relations remained on track. China continued to
provide aid that was effective and won praise from the Zambian government.
With international agencies pressing the new government to work toward
more rational economic policies, China proposed joint ventures (instead of
foreign aid). In July 1995, Premier Zhu Rongji, when visiting Zambia, sug-
gested a textile mill that China had built with foreign aid funds in the 1980s
be turned into a jointly owned company and provided $1.5 million dollars
for overhaul costs. China took a 66 percent share.141
China also invested heavily in Zambia’s copper mines that had not been
doing well. In 1997, China Non-Ferrous Metal Mining Company purchased
the Chambishi mine for $20 million.142 In 2003, China put $150 million
into the mine.143 In 2004, it was reported China had invested $170 in coal
mining in Zambia. China also showed an interest in Zambian manganese.144
In 2006, China agreed to cancel $211 million of Zambia’s debt.145
In early 2007, President Hu Jintao visited Zambia and formally announced
the establishment of an economic zone called the Zambia-China Economic
Trade Cooperation Zone.146 The zone was to be located in Chambishi in the
heart of Zambia’s copper mining area indicating that the focus of the pro-
ject was to be copper mining, although cobalt, diamonds, tin, and uranium
were also mined in the area and were of interest to China.147 China allocated
$800 million in investment credits to the project, including $250 million for
copper smelters. The project was expected to create 60,000 jobs for Chinese
and local citizens.148 President Mwanawasa stated at the time that China
had long helped Zambia improve its economy and the economic zone would
contribute to further growth.149
In 2009, the Zambian government reported that 13 companies had set
up operations in the zone, which Zambians called a “multi-facility eco-
nomic zone,” and that there had been investments in the zone totaling
$800 million over the past two years creating 4,000 jobs for Zambians. The
minister of trade, Felix Mutati, lauded China’s help.150 It was later reported
that the China Non-Ferrous Metals Company in mid-2009 had purchased
another Zambian copper mine for $50 million and announced plans to
invest up to $400 million in Zambia’s mining sector.151 At almost this same
time the China Non-Ferrous Metal Mining announced it planned to invest
$600 million in the copper sector and the China Development Bank agreed
on a $5 billion loan to companies involved in Zambia’s mining sector.152
In 2010, Zambian foreign minister Kabinga Pande visited China and
signed agreements on geology, road construction, an industrial park, and
technical cooperation, and obtained a $1 billion loan.153 In 2011, Zambia’s
new president, Michael Sata, who had been a strong critic of China’s invest-
ments in Zambia, said he wished to maintain strong ties with China.154 This
was evidence work on the zone was going well as seen by both sides.
The second African Chinese–sponsored zone was announced in mid-
2007 and was to be located in Mauritius, an island country off Africa’s
southeast coast. Mauritius was a very different country from the others in
which China had shown a major interest. It was small. Its per capita income
was higher than China’s. It did not possess natural resources. It was demo-
cratic. Beijing obviously had some different motives in offering it a major aid
package, though it had aided Mauritius in the past and Mauritius was not a
major beneficiary of Western aid. It is also worth noting that the Mauritian
government had earlier expressed an interest in Taiwan’s export-processing
zones and had received investment money from Hong Kong to start several
zone enterprises.155
In any event, China allocated $500 million for a manufacturing zone
that would host 40 Chinese companies and provide employment for 5,000
locals and 8,000 Chinese. The China Development Bank was the main
conduit for the financing.156 Among the projects mentioned were a fishing
port, a dam, and a road. Manufacturing plants, to include light industrial
goods, medicines, textiles, and electrical products, were also cited. It was
projected that Mauritius would earn $200 million a year from its exports of
these products.157
China’s intentions in supporting this zone in Mauritius was obviously
very different from China’s aid to build zones in Zambia. In fact, the ques-
tion arose: What exactly were China’s goals? China could strengthen its
financial influence in the Indian Ocean region as Mauritius had extensive
ties in both Africa and South Asia. China could thus gain a foothold in an
area that was part of India’s political and commercial sphere of influence.158
In fact, Mauritian prime minister Ramgoolam said that China had gained
a “springboard for entry into Africa.” It may also have been relevant that
Mauritius is the home of a sizeable ethnic Chinese community and has
attractive investment laws. Hence the undertaking promised to be a suc-
cess. Finally, Mauritius was experiencing economic worries as a result of the
European Union ending its preferential sugar quotas.159 China would thus
gain kudos for coming to the rescue of another country and thereby improve
its global image.
Chinese leaders may have had some other things in mind as well. China
had hurt Mauritius’s textile producers and may have wanted to provide it
compensation for that. Huawei Technologies, one of China’s flagship com-
panies, moved its research, finance, and administrative centers to Mauritius
and reportedly viewed it as a “cyber island.” Thus China may have been
looking for a base for promoting its technology in Africa.160
Nigeria was the site of China’s third economic zone, or rather zones (there
were two). The situation here was also very different from the other zones
that China selected. Here much of the work to create the zones had already
been done and both Nigeria and other countries were heavily involved in
both financing the zones and getting participants. China’s relations with
Nigeria had likewise been very different from China’s relations with the
other countries that it picked to support an economic zone or zones.
First the background. Nigeria became independent in 1960s and being
Africa’s most populous country and the nation with the most oil, it should
have been of interest to China. But Nigeria supported democratic gover-

nance, maintained close ties with India, and did not support many of the
important tenets of China’s foreign policy. Nigeria did not take China’s side
during its war with India in 1962; nor did it strongly support China’s efforts
to join the United Nations. Nigeria was also displeased with China’s “inter-
ference” in neighboring Cameroon. Even more serious was China’s support
for the breakaway Biafra state during Nigeria’s civil war in the late 1960s.
China and Nigeria established diplomatic relations in 1971, but soon the
two countries were on opposite sides during the war in Angola.161
China extended foreign aid to Nigeria during period one of its aid giving,
but it was very small; in fact, it was almost insignificant given Nigeria’s large
population.162 This situation changed beginning in the mid-1990s mainly
because of China’s serious interest in Nigerian oil.163
In 2001, Nigeria’s president Olusegun Obasanjo visited China and signed
agreements on trade and investments. China subsequently sponsored a China
Trade Exhibition in Nigeria, the largest fair ever held in Africa. Forty-eight
Chinese companies participated. President Obasanjo at this time agreed to
sell China 50,000 barrels of oil per day.164 Two years later, the China Civil
Engineering Construction Corporation built the Abuja Sports Complex and
the head office of the Nigerian Communications Commission.165
During a visit by President Hu Jintao to Nigeria in 2006, several eco-
nomic agreements were signed. They provided that China would extend
$500 million in concessionary loans for infrastructure development,
$5.6 million for training Nigerian officials for malaria prevention and con-
trol, and some other projects. Also an agreement was reached whereby
China’s Huawei Technologies would develop the National Information
Communications Technology Infrastructure Backbone and China would
finance Nigeria’s railway modernization.166 Much of this funding involved,
directly or indirectly, the support of Nigerian economic zones. The same
year China’s Ministry of Commerce approved China’s support for two spe-
cial economic zones in Nigeria, the Lekki Free Trade Zone and the Ogun-
Guangdong Free Trade Zone.167
As of 2009, a total of $869 million had been committed to the promo-
tion of the economic zones that, it was said, would advance the manufacture
of transportation equipment, textiles, home appliances, telecommunica-
tions equipment, furniture, medicines, computers, and other products.168
The zones were to accommodate 100 Chinese firms.169 China’s immedi-
ate motives in financing the zones were to increase Chinese multinational
corporations involvement in the Nigerian economy, expand China’s sales
of manufactured goods in Nigeria, and expand its presence in Nigeria’s
oil sector.170
The Lekki Free Trade Zone involved cooperation between Nigeria’s

oil industry and the China State Engineering Construction Corporation
working with the Lagos Free Trade Zone and Lekki Port with support from
Singapore. Chinese development and management skills were sought, as
were Chinese investments. The China-Africa Development Fund provided
about a quarter of the investment money. The project looked for synergies
from private investments and government support. It was to be completed in
2014. The China State Construction Engineering Corporation anticipated
producing 300,000 barrels of oil a day and 500,000 metric tons of lique-
fied petroleum gas each year.171 The Ogun-Guangdong Free Trade Zone
had similar strategic plans but included more Chinese companies already
in Nigeria.172
The next country to be selected for an economic zone that China financed
was Ethiopia. As noted in Volume 3, Chapter 1, China made a significant
aid promise to Ethiopia during period one of its aid giving and delivered.
Notwithstanding tenuous relations in the late 1970s and early 80s, in 1982
China completed a 185-mile-long highway in Ethiopia that became known
as the “China road.”173
In the late 1990s Sino-Ethiopian relations improved to some degree
because of China’s arms sales during the Eritrean-Ethiopia conflict, China’s
foreign aid, Chinese companies investing in Ethiopia, and Ethiopia cochair-
ing the FOCAC meeting in Beijing in 2006. The aid was mainly technical
and agricultural aid. The Industrial and Commercial Bank of China funded
investment in a dam and the Dongfang Electric Corporation supplied elec-
trical equipment. Three Chinese companies were involved in upgrading
Ethiopia’s telecommunications services $1.5 billion. In 2009, China and
Ethiopia signed an agreement on two hydroelectric dams at a cost of $1.9
billion and in 2010 a multibillion loan agreement was signed for a rail line.
China provided funding for a Confucian Institute, technical training for
Ethiopian students and officials, and paid $30 million for the Ethio-China
Polytechnic College.174
China’s sponsorship of an economic zone in Ethiopia, therefore, must
be seen in the context of already extensive economic and commercial rela-
tions though it was a little slower to develop than the other zones that
China supported due to the fact the risks were greater.175 China initially
pledged $101 million to build an international trade area and factories to
produce steel, electrical goods, and construction materials.176 By early 2011,
however, China had delivered $364 million and contracts worth a total of
$900 million were in the pipeline.177 In addition, ZTE Corporation, China’s
second largest telecommunications equipment maker, signed a $2.1 billion
contract to build a national telecommunications network in Ethiopia.178
Assuming this deal was based in part or in total upon Chinese loans and
was related to the economic zone underway, China’s commitment became
much bigger. Subsequently, the Huainan Group, a Chinese shoe manufac-
turer with an output of 20 million pairs of shoes yearly, announced plans
to build in the zone and estimated $4 billion in exports annually within a
decade.179 Since Ethiopia had the largest livestock population in Africa and
was already exporting large quantities of leather to China, it seemed natural
to produce shoes in Ethiopia.
Ethiopia’s president Meles Zenawi visited China in 2011 and signed
loan agreements with China’s Export-Import Bank worth $550 million for
15 projects. That same year the Ethiopian Railway Corporation and the
China Railway Group signed a loan agreement worth $1.1 billion to cover
construction of a rail project while the Hong Kong–based Petro Trans
Company announced plans to invest $4 billion over 25 years to develop oil
and gas reserves in Ethiopia.180
At this time China became Ethiopia’s largest trading partner, though
the trade relationship was unbalanced in China’s favor—a problem the eco-
nomic zone was to rectify. China was involved not only in building roads
and telecommunications systems but was constructing schools, pharmaceu-
tical factories, bridges, and much more. The Chinese embassy reported that
there were 10,000 Chinese workers in Ethiopia. Ethiopia’s trade minister
said that China had become his country’s “most reliable partner.”181
In 2007, China negotiated with the government of Tanzania on an eco-
nomic zone. China was already long involved in Tanzania’s economic devel-
opment and had a major presence in the country. In any event Tanzania
was already working on economic zones and it was unclear at the time if
China was going to be involved in something new. China may have wanted
the Tanzanian government to take the lead. In any case, it is reported that
China spoke of a “logistics hub” in Tanzania.182
China subsequently helped finance what was called an economic zone
in Dar es Salaam (which linked the Tan-Zam Railroad with the port) to
expand the port and related facilities there. Ironically to some observers
Japan was also providing financial help.183 In any event in October 2014
China pledged “at least” $10 billion dollars in financing to build the port
of Bagamoyo that was said to be part of the Bagamoyo Economic Zone.184
(A framework agreement had been signed in March 2013 when President
Xi Jinping visited Tanzania.) China Merchant Holding International ini-
tially pushed the deal, but the zone also got funding also from Oman’s State
General Reserve Fund. Separately China signed deals worth $1.7 billion to
build other projects, including a satellite city and 1.2 billion to build a gas
pipeline.185
China sought to expand its trade in the area and the Bagamoyo Port would
provide access to eight countries nearby: Mozambique, Malawi, Zambia,
the Democratic Republic of the Congo, Burundi, Rwanda, Uganda, and
Kenya. It could handle 20 times the cargo of Dar es Salaam port, which was
often congested. China’s main interest in financing the port was to create
better access to raw materials it needed to buy and to ensure easier deliveries
of its exports of commercial goods to the region. There was speculation that
Beijing saw the port as having military value. China would control the port
for 40 years.186
China’s financing these economic zones sheds considerable light on its
foreign aid giving and the relationship between its aid and investments as
well as China’s search for natural resources and markets. It is interesting that
China picked nations where it would establish these zones almost solely for
economic reasons with expectations that both China and the host county
would both accrue commercial benefits. Mauritius ranked first in the ease
of doing business in Africa according to the World Bank, Zambia ranked
sixth, Ethiopia nineteenth, and Nigeria thirteenth (among 46 countries).187
Clearly China selected countries where it thought the zones would succeed
and would enhance both local development and trade with China.
Aid and Investments for Energy and Natural Resources

China’s economic growth propelled its need for energy and raw materials,
which have been sought with great vigor by China using the foreign aid
and investments it purveyed to many African countries. The basis for this,
as noted in Volume 1, Chapter 3, was China’s economy that expanded at a
breathtaking pace after 1978 in large part because of the very fast growth of
its manufacturing sector. This and the higher standards of living associated
with its economic prosperity created a huge demand for energy and natu-
ral resources. Hence, to a considerable extent China geared its foreign aid
and investments to securing sources of both. The importance of acquiring
energy and natural resources drove China to pledge large amounts of aid
and investments to African countries and hence this topic warrants special
analysis.
Africa was rich in energy and natural resources. But China found a num-
ber of other reasons to go there with its aid and investments: the quality of
its oil, its proximity to ocean transport, easier contractual arrangements,
and the fact most African countries did not belong to OPEC (which could
embargo sales and/or increase prices markedly), and that its other resources
were plentiful and many were untouched, Africa was, and is, more attractive
to China than any other place in the world.188
First petroleum. There were a number of other special or unique rea-

sons for China’s interest in African oil. One, Southeast Asia, which also
sells petroleum to China, has not been able to increase its exports much
in recent years. Two, Chinese leaders saw the Middle East, another region
that supplied large quantities of oil to China, as unstable, especially after
September 11, 2001. Three, Africa was rapidly increasing its production of
oil and had the potential to do much more. Four, Western companies con-
sidered many African countries risky; China was willing to take risks in
order to find more oil and resources and diversify the origins of its imports.
Finally, most African countries wanted China’s aid and investments and
were willing to sell or trade oil for it.189
In many instances, China’s foreign assistance laid the groundwork for
deals on developing and buying oil and other energy resources. China’s
investments were in many senses aid, or at least China did not distinguish
clearly between the two. African countries didn’t care. This was according
to plan; in 1995 the State Council mandated the Ministry of Commerce to
expand its “aid, investments, and trade.” It also directed state-owned corpo-
rations to set up trade, investment, and development centers in Africa.190
In the case of China’s search for energy its foreign aid and investments
led most clearly in two countries: Angola and Sudan. They related closely
in several other countries too, including Algeria, Ethiopia, Gabon, Kenya,
Namibia, Nigeria, and the Republic of the Congo.191 China’s aid and invest-
ments in African countries energy sectors (the nonfinancial parts) grew from
just $75 million in 2003 to $1.57 billion in 2007 (totaling $4.46 billion
during this period.192 It has been growing even faster than this since. This
translated into China acquiring oil from Africa at a very rapidly increasing
rate—30 percent annually in recent years.193
By 2006, Angola accounted for half of China’s imports of petroleum
from Africa and nearly equaled, and even briefly surpassed, Saudi Arabia, to
rank as China’s number one source of foreign oil.194 Since then Angola has
been the second largest provider of China’s imported oil.
China’s relations with Angola were strained at the onset of period two
of China’s aid giving as a result of China’s earlier involvement with orga-
nizations hostile to the government and its aid to rebel groups there (as
noted in Volume 3, Chapter 1). Differences were tentatively resolved and
in 1982 China and Angola established diplomatic relations. Nothing hap-
pened immediately, but in 1988 Angola’s president, Eduardo dos Santos,
visited China reportedly to discuss acquiring arms.195 In 1989, like a num-
ber of other African countries, Angola too did not criticize China over
the Tiananmen events and at the end of the year China granted Angola
$121 million in the form of credits to buy Chinese goods.196
Relations continued to improve, in fact quickly, and in 1992 China

agreed to build 600 flats in Luanda and donated $183,000 to help rebuild
damage in the country caused by earlier civil conflicts.197 China’s aid and
soft loans subsequently increased markedly though many of them were
not announced.198 As a result, by 2004, Angola had become China’s sec-
ond largest trading partner in Africa. Given the state of Angola’s govern-
ment finances, this could only have happened because of China’s aid and
investments.
In March 2004, Beijing’s financial help to Angola grew exponentially
when China’s Exim Bank extended a $2 billion credit line to the Angolan
government, half of it to be delivered that year and the remainder in 2005.199
This assistance was linked to China receiving 10,000 barrels of oil per day
from Angola—the first major transaction China made of this kind. In fact,
this type of deal became known as the “Angola mode.”200 The loan also stip-
ulated that 70 percent of the commercial contracts resulting from China’s
aid or investments would be awarded to Chinese companies, after which the
Exim Bank compiled a list of eligible companies.201 Thus China realized
another important goal: finding markets for its goods.
The terms for repayment of the Chinese loans were very generous and its
financial help was not conditional. In fact, this became controversial because
Angola was negotiating with the International Monetary Fund, the Paris
Club, and other Western donors who were putting pressure on the Angolan
government to reduce government corruption, clean up its financial mess,
and offer some transparency in its financial records to get additional loans.
With China’s offer in hand the Angolan government stopped talking to the
IMF.202 China’s investments also resulted in Angola’s credit rating rising
from “D” (highly risky) to “C” or better, which resulted in a number of
countries and foreign companies subsequently offering loans to Angola.203
The conditions and the risks of the loans were such that some Chinese
officials hinted that it was foreign aid rather than investments.204 It was
not classified as investments in China (but rather foreign aid) for another
reason: Chinese companies as a result of using the term aid did not have
to register with the Angolan National Agency for Private Investment. This
offered further proof for the argument made earlier in this book that China’s
aid and investments are very quite similar, sometimes the same, and there is
generally no clear distinction between the two.
By early 2006, $1.8 billion of the $2 billion China Exim Bank loan
had been spent.205 So, that June, China doubled the loan or made another
for $2 billion and cancelled Angola’s outstanding debts that were due at
the end of 1999. This loan was specified for building infrastructure and
another oil-for-aid (or investments) deal.206 In addition, $200 million was
to be “invested” in social projects.207 The China Petroleum and Chemical

Corporation (SINOPEC) made the transaction: China received 75 percent
of the oil retrieved. It was later reported that China made another oil-for-
infrastructure loan for $500 million at about this time.208
China’s aid to Angola continued, some of it unreported, while aid and
investments remained intertwined. In 2007, Angola’s president, Eduardo dos
Santos, visited China and concluded another loan agreement for $2 billion
designated for large-scale infrastructure projects.209 By 2009, according to
one observer, the Chinese government had provided or “facilitated” loans to
Angola totaling $13.4 billion and possibly as much as $19.7 billion.210
As a result there were 50,000 Chinese in Angola, most of them working
on infrastructure projects. More than 50 state-owned corporations and four
hundred private Chinese companies were observed working on projects in
Angola.211 Meanwhile more than 10,000 Angolans applied for visas to go to
China.212 China’s financial help to Angola also had a tremendous impact on
trade. Trade, which had been but a little over $150 million annually in the
1990s, reached $25.3 billion in 2008.213
Angolan leaders profusely praised China’s economic help. Yet, there
was also a different side to China’s foreign assistance to Angola. China’s
investments were said to connect to serious corruption in Angola. China
International Fund, located in Hong Kong, was reported to have been the
conduit of large amount of Chinese investment funds that were diverted
from aid projects to the pockets of Angolan officials. The process was
labeled “transparent looting.” A case in point was a $2 billion airport project
that remained on the drawing board because the financing disappeared.
It is said that the scope of diverting funds was astronomical, to the tune of
$6 billion in one year—one sixth of the national budget.214 Clearly there
has been a problem of aid and investment money vanishing in Angola.215
Yet Angola’s economy performed well and was projected to do the same in
the near future.216
In the case of Sudan, in the late 1980s China provided foreign assistance
to build a large textile mill and the Friendship Hall building in Khartoum.217
After a coup and a change of government in Sudan in June 1989, China made
friends with the new regime in part by providing it with military assistance,
including guns, mines, and other equipment. It is uncertain, however, if
these weapons were provided free or if they were purchased, or if some other
arrangements were made. In any case, in the early 1990s Chinese weapons
were observed in Sudan, even Chinese-made fighter planes.218
If China was making money on arms sales to Sudan, it was also con-
tinuing to give aid. In 1994, it was reported that China provided Sudan
with $180 million in the form of a grant.219 Shortly after this a $12 million
hospital built with Chinese aid was opened.220 The next year Sudan’s Air
Force received six more Chinese jet fighter planes (Chengdu F-7s).221 That
same year, China loaned Sudan $18 million, $13 million of which was to
help Sudan explore for oil and train engineers.222
China’s more recent aid activity in Sudan, in terms of the way it was
reported, was “aid-investing.” This followed the China National Petroleum
Company acquiring a stake in a Canadian firm operating in Sudan, after
which Beijing put serious money into oil exploration.223 At the time, Sudan
was exporting no oil. Western petroleum companies had left because of a
civil war there. The government of Sudan was in dire financial straits due
to the cost of the war and for various other reasons. In that context, in
1996 Sudan agreed to sell oil concessions to China on generous terms (no
restrictions on profit repatriation, tax exemptions, etc.).224 China acquired
40 percent of Sudan’s national oil company, said to be Beijing’s largest over-
seas investment at the time.225
In 1999, Sudan began exporting oil and much of it went to China. A
$1 billion pipeline, which China invested in and helped build (provid-
ing seventy percent of the supplies), made this possible.226 In 2001, China
became involved financially in Petrodar National Petroleum Company,
which was both exploring for and extracting oil. Investments were made by
China’s national oil company, China National Petroleum Corporation, and
by SINOPEC, China’s largest oil refiner.227 By 2005 it was reported that
China was getting 10 percent of its imported oil from Sudan and over half of
its equity oil (gotten through aid or investment deals). In total China was tak-
ing 40 percent of Sudan’s production and 65 percent of its oil exports.228
Meanwhile China built a major hydroelectric facility, a new airport in
Khartoum, and several textile plants. As a result China’s foreign aid work
became very noticeable. In 2006, the number of Chinese workers in country
reached 24,000.229 China’s foreign aid, together with its foreign investment
funds, facilitated commercial deals and in many cases the two could not
be distinguished one from one another.230 By 2007, China’s investments
in Sudan reportedly totaled $6 billion.231 This, however, did not include a
pipeline that reportedly cost around $20 billion.232 Sudan thus became one
of China’s top partners in economic cooperation and one of the top destina-
tions of China’s foreign investment.233
In 2007 President Hu Jintao visited Sudan. It was reported that he prom-
ised an interest-free loan to build a presidential palace plus aid to build a
railroad line, and that he cancelled $80 million of Sudan’s debt to China.234
The palace loan was for $13 million. Hu at this time promised additional
aid to build a number of schools, $77 million for infrastructure projects, and
$40 million in the form of a grant. President Hu also agreed to zero-tariff
status on 44 Sudanese commodities that it exported to China.235 Later in

the year, China pledged humanitarian aid to the tune of $2.6 million—said
to be the fourth such pledge given to Sudan.236
Many Western observers saw China’s assistance to Sudan as both gener-
ous and effective. China’s aid was said to be not only beneficial, especially
given Sudan’s difficult situation and its lack of bargaining power in get-
ting financial help elsewhere, but China’s buying energy and other natural
resources pushed the prices for these items up, which lessened Sudan’s debt
situation considerably.237
However, there was another side to China’s foreign assistance. After
2003, China’s aid (again defined broadly to include investments) to Sudan
became the subject of controversy due to the fighting there and increased
publicity about the genocide in the Darfur region of western Sudan. There
were a host of accusations directed at China. The most widely heard one
was that China gave foreign aid and made large investments in Sudan while
other nations and international organizations cut both to put pressure on the
Sudan government to change its war policies. China thus undermined inter-
national efforts to end the fighting and the genocide. According to Amnesty
International, China provided arms to the Sudan government ($81 million
in 2005) that were used to commit atrocities in Darfur.238 Finally, China
used its veto or threat of a veto in the United Nations Security Council to
block UN action to “end the killing” in Darfur.239
Clearly the first charge against China, that it undermined Western and
international organizations’ pressure on Sudan, was true. To explain this one
must recall that China, having been the victim of Western aggression and
encroachments, respected the national sovereignty of other countries. China
did not want to place conditions on it aid that it had long opposed and con-
nected to its own suffering because of Western imperialism in the past. In
addition, China did not feel kindly toward international organizations that
in the past had treated China unkindly.
The claims that China fueled the conflict by supplying arms were true
though exaggerated. Also there was another side to the story. China supplied
Sudan with $342 million in arms from 1981 to 2006, but the amounts were
small after 2003: $20 million that year and 14 million in 2006. The United
States and Russia were also major arms suppliers, exceeding China in most
of the years during the period mentioned above.240 Clearly Sudan was not
reliant on Chinese arms and China did not need to purvey arms to Sudan to
have access to its resources.241
One of the reasons China was so severely criticized for its role in the
Darfur situation and the media gave it the volume of attention it did was
the ethnic and religious aspects of the conflict: Arabs against non-Arabs and
Muslims against Christians. After 9/11, Christians in the United States took
an interest in the conflict, and Congress in July 2004 passed a resolution
calling the conflict “genocide” (though the UN, the African Union, and the
European Union had not used this term).242 Western religious and human
rights organizations also focused public attention on the conflict and used
the term “genocide.”
In 2007, more than 100 members of Congress wrote to China’s president
saying that the 2008 Olympic games might be jeopardized if China did not
do something to help resolve the Darfur problem. In 2008, the “Save Darfur
Coalition” was organized; it threatened to boycott the games. This had an
impact on the Chinese government even though the charges were to some
degree hypocritical inasmuch as there were other countries involved in the
Sudanese oil sector that did not pull out, including India and Malaysia, and
they were not castigated for their actions as China was.243
Also, nothing much was said about the fact that China’s aid to and invest-
ments in Sudan gave the government maneuvering room to negotiate with
the enemy, the Sudan People’s Liberation Army, and reach a peace agree-
ment in 2005. Further, Chinese funds stimulated Sudan’s economy to grow
from 8 to 12 percent of the gross national product while it cut inflation from
over 100 percent in the 1990s to 5 percent in 2005 and per capita income
rose form $280 annually to $1,080 in 2006.244 This had a very beneficial
impact on Sudan’s population.
Anyway, China altered its policy of nonintervention in Sudan, while the
Chinese media reported on atrocities committed by government forces.245
Chinese leaders came to see its strict policy of not interfering in the domestic
affairs of another country was contrary to its most important foreign policy
goal of promoting China’s economic development. China thus changed its
stance on foreign, UN (especially in the form of peacekeeping), and African
Union intervention in the crisis.246 Of special note, China used foreign aid
funds to promote its new policies, including sending humanitarian aid,
helping pay for African Union peacekeeping costs, sending its own peace-
keepers (and an engineering corps) to Darfur, and contributing soldiers to
the United Nations Mission in Sudan.247
In addition to oil China is also in need of a variety of natural resources
that are available in African countries. These include iron ore (present in
significant quantities in South Africa), platinum (mined in Zimbabwe), cop-
per and cobalt (from the Democratic Republic of the Congo and Zambia),
timber (available from Gabon, Cameroon, Congo-Brazzaville, and Liberia),
fish (Gabon and Namibia), and cotton from various African countries.248
China has made a number of aid and investment deals to make resource
acquisitions. However, China’s efforts to acquire most natural resources has
not involved large doses of foreign aid or foreign investments, as has been the
case with its obtaining oil.249 China’s aid to Zambia in the form of develop-
ing an economic zone and its other aid to acquire copper and other resources
is an exception.
This can be explained noting that it is China’s policy to help all African
countries, and Beijing has put a lot of funding into infrastructure that will
facilitate African countries’ exports (including, of course, natural resources),
and these resource exports coincide with China’s imports. Thus China’s aid
and investments generally facilitate the process of China getting the resources
it needs but it has not often specifically tied aid to resource acquisition.250
Finally, it needs to be noted that some have criticized China’s policies
regarding obtaining natural resources as lacking in morality and showing
little concern about environmental damage.251 This will be discussed in the
concluding chapter of this volume. Suffice it to say here that this is true,
but it is largely the result of China’s policy of not getting involved in the
domestic affairs of recipient countries and its inclination to provide aid effi-
ciently and quickly and ignore other matters. It also needs to be mentioned
that China’s demand for African raw materials has put money into African
nations’ coffers directly through its purchases of raw materials and indi-
rectly by causing the price of most to increase on the global marketplace,
and this has provided quite a large secondary benefit to African countries.252
Many African countries even see this as a godsend.
China Financing Infrastructure Building

China has spent literally enormous amounts of money to build infrastruc-
ture projects in Africa during period two of its foreign aid giving. In fact,
most of China’s foreign aid cum investment projects in Africa have been for
infrastructure. One source reports that it amounts to 70 percent of China’s
financial assistance. A French government study published in 2010 states
that Chinese companies control over half of the world’s market for major
construction and engineering projects.253 It is also reported that infra-
structure building accounts for a third of China’s construction firms’ work
abroad.254
Because China’s Exim Bank has financed many of China’s infrastructure
projects abroad most observers have labeled these transactions investments
rather than aid. However, the “investments” in many cases do not appear
to be based on a profit motive. Furthermore, some of the funds for Chinese
infrastructure endeavors have come from host governments, and some have
come from international agencies. China does not follow strict guidelines in
its infrastructure building.
In any case the important question is: Why do China’s foreign aid and
investment decision makers like infrastructure projects? There are many
reasons. First, China has a long and remarkable history of building infra-
structure, including dams, railroads, telecom, roads, etc.255 Second, China is
considered by many observers to have an edge over other countries in financ-
ing infrastructure projects because of its large stores of foreign exchange (as
noted in Volume 1, Chapter 3). Third, the speed of making decisions and
finishing projects and China’s lower costs as compared to competitors are
advantages.256 Fourth, Africa desperately needs more investment in infra-
structure—reportedly as much as $10 billion annually.257
On the downside there has been some controversy over the quality of
the work by Chinese construction companies; in fact, China has been often
criticized for this. But many also say China’s construction work is not much
below that of Western companies and comes at a much lesser cost. In addi-
tion, the use of Chinese labor, while controversial, is much less expensive
and the rate of absenteeism is very low (compared to generally more than
20 percent for local workers) while work stoppages and other such problems
are infrequent.258 All of this applies to China’s involvement in Africa more
than other regions of the world.
What are the facts? During period one China provided considerable aid
for infrastructure building. Its reputation in this realm was good. This con-
tinued to be so generally during period one, there being one caveat: China
accelerated its building efforts. The increases in financing that China has
made available for infrastructure projects were nothing less than phenom-
enal. China spent $0.5 billion per year during 2001–03, $1.5 billion annu-
ally from 2004 to 2005, $7 billion in 2006, and $4.5 billion in 2007 helping
build infrastructure projects.259 As of 2009, China was financing and/or
building infrastructure projects in 35 African countries. The biggest benefi-
ciaries were Nigeria, Angola, Ethiopia, and Sudan.260
What kinds of infrastructure building did (and does) China favor? And
what are the details?
China allotted $3.3 billion to build ten major hydroelectric plants dur-
ing this period, which produced 6,000 megawatts of electricity. When
completed Africa’s hydropower will have increased by 30 percent.261 The
largest hydropower project China financed was the 2,600-megawatt pro-
ject in Nigeria. The second largest was a 1,250-megawatt dam in Sudan. In
2006 China’s Exim Bank negotiated with the government of Mozambique
to build a 1,200-megawatt plant. Other projects included dams in the
Republic of the Congo, Ghana, Gabon, and Guinea. China also funded
projects to build several thermal power stations.262 By 2010 China had
signed contracts to build two more dam projects in Sudan and was in
the process of negotiating with Ethiopia for another dam. Meanwhile,

Zambia’s completed dams that enabled it to export electricity. In 2011
China had finished or was near to completing hydropower projects in
Africa worth $9.3 billion.263 In Ethiopia a dam under construction and
scheduled to be completed in 2013 was going to be Africa’s tallest, at a
cost of $2.2 billion.264
Why dams? China, home to almost half of the world’s biggest dams and
the recent massive Three Gorges Dam (the world’s largest by a number of
measures), sought to use its skills, labor, and specialized companies (where
there grew a problem of unemployment due to China having exhausted
appropriate domestic sites) to build dams elsewhere; Africa provided the best
opportunities.265
China’s efforts at dam building, however, have not been without prob-
lems. The difficulties can be traced to various faulty decisions stemming
from perceptions about the justification for infrastructure building, the haste
in getting projects finished, and decision-making processes that ignored
certain political and economic conditions.266 Some dams displaced a large
number of people and ruined parks and other natural habitats. Labor issues
and recovering the costs of projects likewise created controversy.267 One of
the reasons for too much haste was that its dam-building projects were moti-
vated to a considerable degree by Chinese leaders who were enthralled by
green energy and in many cases they sacrificed the environment, seeing the
costs in this realm as justified by creating clean electricity. In some cases
the projects were grandiose and their size alone fostered negative side effects
and/or unintended consequences. In a number of cases, as is wont to happen
in Africa, political issues got in the way and in some instances a change of
government halted the projects.
But China persisted in building dams. In 2014 China agreed to help
finance two dams in Ethiopia that will generate needed electricity—though
Egypt objects because these dams would reduce the flow of water in the
Nile River.268 Recently China proposed to build a dam in the Democratic
Republic of the Congo; this was to be twice the size of the Three Gorges
Dam. It would, if completed, harness the world’s second largest river and pro-
vide electricity to an area that has little. Some call the project the El Dorado
of China’s infrastructure projects.269
Railroad refurbishing and building have also been big items in China’s
financial assistance in Africa. In 2006, China International Fund Ltd. (a pri-
vate company in Hong Kong with links to the Chinese government) began
a $300 million refurbishment of the 1,344 kilometer Benguela Railroad in
Angola that traverses the country from the Atlantic Ocean inland and goes
on to link up with other lines in the Democratic Republic of Congo and
Zambia. The line was slated to be used among other things to ship Zambian
copper to Angolan ports.270
Up to 2007, China provided financing to the tune of $4 billion to reha-
bilitate 1,350 kilometers of railroads while constructing 1,600 kilometers
of new lines for a total of 2,950 kilometers (compared to all of the existing
railroads in Africa that totaled 50,000 kilometers). The main beneficiaries
were Nigeria, Gabon, and Mauritania.271 That year China agreed to build
the Belinga-Santa Clara Railway in Gabon for an undisclosed amount, to
be paid for with iron ore sales. China’s Exim Bank financed a 430-kilometer
line in Mauritania in 2007 at a cost of $620 million.272
China’s involvement in financing and building railroads has been even
larger in the last few years. One of the biggest deals was concluded with
Nigeria. China financed the construction of the Abuja Rail Mass Transit
System and the rehabilitation of 1,315 kilometers of the Lagos-Kano
line. China’s Exim Bank provided $2.5 billion of the project’s total cost
of $8.3 billion at a concessional rate of 3 percent.273 In May 2014, China
agreed to finance a coastal railroad at a cost of $13.1 billion. The line would
advance internal trade as well as exports and bolster Nigeria’s economy.274
At this time Premier Li visited Nigeria and spoke of China supporting
an “all-Africa railroad.”275 In 2015, Foreign Minister Wang Yi mentioned
this again saying that many of the railroad projects financed by China were
leading to such a “dream.” He cited $1.83 billion that was being expended
to finance the rebuilding of a 1,344- kilometer line in Angola and the
Mombasa-Nairobi line that would be extended to five other countries at a
cost of $13.8 billion.276
The story of China’s railroad building would not be complete without
assessing the current status of the Tan-Zam Railroad finished in the mid-
1970s. As noted in Volume 3, Chapter 1, in the 1980s the Tan-Zam Railroad
project was operating in the red and its officials encountered frequent prob-
lems keeping the trains running. One writer summarized the project as one
that was “plagued by lack of equipment, a shortage of skilled workmen, poor
management, underpowered Chinese locomotives, a slow turnover of stock,
and a severe shortage of spare parts.”277 A newspaper in China described
the problems as mainly caused by “insufficient management expertise.”278
China at this time agreed to provide funding to repair the railroad and put
the line back into good operating conditions.279
But China’s help consisted of more than just providing funds. In the sec-
ond half of 1983, China pressured Tanzania and Zambia to allow Chinese
experts to join the management of the Tan-Zam Railroad to improve traf-
fic and reduce the number of accidents. They subsequently made many
decisions on running the railroad. In August 1986, marking the ten-year
anniversary of the opening of the railroad, China provided additional aid

amounting to $5.6 million for “restoration.”280 China sent an official to the
celebration who made it clear that China did not regard it as a success story
even though the presidents of Tanzania and Zambia attended and lauded
the project.281
As noted in Volume 3, Chapter 1, the Tan-Zam Railroad Bureau imported
locomotives from Germany to improve the line’s capacity and put in place a
number of new procedures and policies. According to Chinese sources, this
resulted in making the railroad profitable so that between 1983 and 1986
the line transported 3 million tons of goods and 3.5 million people and
turned a profit of $12 million, increasing that to $5 million in the first half
of 1986 alone.282 Profit making and other commercial principles were made
part of the railroad’s operating guidelines.
Yet in the 1990s, the railroad was operating at little more than 20 percent
of capacity and was still experiencing financial problems. Part of this was
due to the political change in Southern Africa, making it acceptable for
Zambia to export its copper and other commodities through other coun-
tries. China, nevertheless, sought to keep the railroad solvent and pledged
additional money to improve it. With China’s increasing need for raw mate-
rials this made sense. In fact, it was rumored that, in addition to its need
for copper, cobalt, and some other minerals, China was also interested in
uranium found in the area. China’s new commitments also coincided with
China’s efforts to build a special economic zone in Zambia and the financial
aid given to improve the port at Dar es Salaam.283
In the mid-1990s, China’s soon-to-be premier Zhu Rongji pushed the
governments involved and the management of the railroad to make major
reforms of a capitalist nature. Zhu even called for laying off redundant
workers.284 This had some impact, though in 1999 Tanzania and Zambia
asked China for additional help to overhaul the line.
In 2006, a newspaper in Tanzania described the railroad as being “on the
verge of collapse” noting that the company was three months behind in pay-
ing its workers and most of its locomotives were out of service.285 In 2008,
the line was operating at just 40 percent capacity and it had accumulated
debts of $45 million.286 Thus, in 2010 China provided a $39 million loan to
revive Tan-Zam’s daily operations.287 In 2013, it was reported that the line
was suffering monthly losses of $1 million.288
Given China’s commercial interests in Tanzania and Zambia, its eco-
nomic zones in Zambia, its decision to modernize the Tanzania’s main port
in Dar es Salaam, and its financing the upgrading and expansion of the
Benguela Railroad (that links into the Tan-Zam line) it seems likely that
China will continue to underwrite the Tan-Zam Railroad, though there are
indications that Chinese decision makers apparently believe that this can
be done better by financing economic zones, ports, and other railroads that
will give the Tan-Zam Railroad more business instead of directly providing
economic aid.289 This appears to make sense.
China’s aid and investment policies have also favored building commu-
nications networks. China had earlier built small communications facilities
in Africa from which it gained experience and talent in this realm. Its big-
gest foray into the realm of information and communications technology
aid during period two has been a $1.5 billion project agreed upon in 2006
with Ethiopia. Construction began in 2007. When started it was projected
to double the country’s optical fiber use, triple the mobile network expan-
sion, double the rural telecom coverage, and quadruple the length of fixed
telephone lines.290 The same year, China’s Exim Bank pledged $31 million
in financing to Ghana to expand its fixed-line communications.291
China’s ZTE and Huawei (corporations) have since then bid on the
majority of the projects in information and communications. The coun-
tries involved include Chad, Democratic Republic of the Congo, Mauritius,
Niger, Senegal, Sierra Leone, Tanzania, and Zambia. These projects were for
smaller amounts and it is uncertain if all of the funds were from China and
if so whether they were classified as aid or investments.292 Again the distinc-
tion does not seem to matter.
China has also financed and built a number of roads. This was one of
China’s favorite categories of aid projects during period one and that con-
tinued to be the case during period two. In the early 2000s China spent
around $550 million of its foreign assistance on roads, mostly short ones.
The Ministry of Commerce handled most of the projects.293 China has con-
tinued to build roads in Africa and has done so successfully. However, in
recent years China has provided less aid and investment money to build
roads than dams, railroads, and communications facilities.
Finally, China has offered significant infrastructure assistance in some
other realms. China has spent around $120 million on various water and
sanitation projects undertaken by Chinese companies during period two,
not counting $200 million in Angola that was financed by the Exim
Bank.294 China has also expended considerable funds for environmental
protection and green energy.295 During period one of its aid giving China
provided foreign aid to improve agriculture and forestry in African coun-
tries in addition to building a number of hydropower projects.296 More
recently (during period two), China has financed hydropower projects in
Burundi, Cameroon, and Guinea, a biogas project in Guinea, and much
more. China is also cooperating with other countries and international orga-
nizations in this realm.297 In 2011, China initiated aid for a number of wind
farms and solar energy projects, having earmarked $100 million for “solar
energy” in 40 African countries.298 In 2015, China’s General Nuclear Power
Corporation signed a memorandum, of understanding with a partner in
Kenya to build four nuclear power plants that would generate 170 million
kilowatts of electricity by 2030. At the time only 10 percent of Kenya’s vil-
lages and 30 percent of the country was connected to grids. The cost of this
deal was not mentioned.299
Conclusions
At the onset of the new millenium China’s foreign aid and foreign invest-
ments to Africa both in general and to specific African countries took on
a new life. More countries became recipients. Only one African country,
Swaziland, did not receive financial help from China.300 China provided for-
eign aid, broadly defined, and investments to African countries in billions of
dollars every year.301 Toward the end of the period China was giving foreign
assistance to more African countries than the United States.302 Meanwhile
declining assistance by Western countries and international organizations
helped China both increase its aid and its investments’ influence.
The total amount of China’s foreign aid and foreign investment in African
countries since 1980 is difficult to calculate not only because China’s finan-
cial assistance to African countries is not transparent (like it is elsewhere)
but also because China does not want to provide thorough data and may not
be able to in any case. Again definitions are a problem.
However, some estimates are possible. Adding the amount of assistance
announced at meetings of the FOCAC (which was launched in 2000) the
total reaches into the middle double-digit billion of dollars. Some of this is
still in the pipeline but there is little doubt China that will deliver on all of
it. China’s total foreign assistance in the 1980s was a few billion; probably
it was a small few. After 1989 it increased, averaging three or four billion
yearly in the 1990s. Thereafter, China’s financial assistance to Africa “took
off.” In the early years of the century China announced the cancellation of
African countries’ debts amounting to several billion. There is no doubt this
“aid” was delivered. New aid increased markedly as well. China’s invest-
ments snowballed. It was reported that China “invested” $30 billion in
Africa from 2000 to 2005 and a total of $100 billion by 2007.303 This was
probably true. China provided financial help to build economic zones, but
information about this was quite scattered and incomplete. A few billion
dollars were announced. It was obviously much more. China’s assistance in
developing and marketing energy and natural resources was reported to be
$6 billion up to 2007. It was more.
The available data on China’s aid and investments to specific nations and
in various categories of assistance, in fact, suggest China’s financial help
was vastly larger than reported. Beijing pledged as much as $19.7 billion
to Angola in aid for oil and assistance to Zimbabwe totaling $26.9 billion
over a decade.304 China’s assistance to building infrastructure was said to
be $7 billion in 2006 and $4.5 billion in 2007. Whether this included a
$1 billion pipeline in Sudan is uncertain; obviously the total figure did not
include a $9.3 billion for hydroelectric projects. China reportedly provided
$4 billion in helping to build or refurbish railroads at this time. One prob-
lem in counting China’s financial assistance is the fact that only a fraction of
China’s aid and investments going to Africa conformed to the definition of
either by the OECD and how this was reported was often left to the discre-
tion of the individual writer. Yet this did not have much significance in the
way China’s financial help was seen on the continent: generous, efficient,
without ties, etc.305
One would surmise that the figure of $100 billion in assistance (called
investments) to African countries was not too far off the mark. Seeming
to at least vaguely confirm this number, a report by AidData, a joint pro-
ject of the College of William and Mary Brigham Young University and
Development Gateway, records that China provided $75 billion in “aid”
(though no definition is provided) between 2000 and 2011, from which
50 African countries benefited, and was involved in 1,673 projects.306 Since
this data came from open media sources and covers only a decade one might
surmise it is a low estimate and the $100 billion figure may be higher.307
Putting these data in perspective China’s financial help to Africa has
been described as “roughly equal” to that purveyed of the United States
during the period 2000 to 2011.308 The total US assistance to African coun-
tries (as elsewhere) is considerably larger since China’s assistance has been
large only in recent years; however, China has recently each year surpassed
the United States in helping Africa financially. Looking at this matter from
a different angle, China’s aid influence, in terms of promoting economic
development, is now larger than America’s given the fact that US aid and
investments have diminished with the 2008 economic downturn and owing
to its mounting debt Washington has focused its aid giving on combating
terrorism while much of its financial help has been given in the form of
humanitarian aid in contrast to China’s assistance that has been aimed at
facilitating economic growth: building infrastructure, making progress in
health, education, and culture, etc.309 Western aid, including US Foreign
assistance is also said to be “tied” to efforts to promote democracy and
human rights, which makes it less effective in promoting development and
thus less attractive to African leaders.310
Indeed China’s financial assistance to Africa is different. In fact, the

unique features of China’s aid to African countries need to be assessed in
greater detail and put in the context of China’s foreign policy goals, Africa’s
myriad problems, and the aid Africa has received and is receiving from other
sources.
Debt relief is arguably the simplest kind of foreign aid China has provided
to African countries.311 China, of course, had given debt relief in the past.
But it was not large. Beginning in 2000, Chinese leaders cancelled massive
amounts of debt owed by African countries to China. In 2005, China for-
gave all of the interest-free government loans given to 31 countries in Africa,
amounting to $1.4 billion.312 According to one author’s calculations, debt
relief amounted to between slightly less than a fourth to as much as one-
third of China’s aid, broadly defined of course, to African countries between
2001 and 2009.313 By 2009, China had written off 60 percent of the debt
owed to China by African countries—worth a total of 12.7 billion.314 China
continued to cancel debts, so the total would now be much larger.
Meanwhile a large portion of China’s financial help to African countries
has been labeled foreign investments. In fact, “Chinese investments” post-
2000 made up the lion’s share of China’s financial help to African countries.
However, one may argue, for the various reasons mentioned earlier in this
chapter, that many of these investments, or a good portion of each, should
be called foreign aid. How so? Many of the conditions of investments have
been renegotiated and the interest rate lowered to a level such that Western
donors would call them foreign aid. Further, many investment loans have
been cancelled completely, without question turning them into grants using
Western terminology.315 Suffice it to say that China’s debt relief to African
countries, since most analysts do not redefine investments (to grants or gra-
tis aid) when this happens, makes this categorization wanting. Some would
say the aid-investment dichotomy is especially meaningless in the case of
China’s assistance to Africa.316
China also provided considerable economic help to African countries in
the form of tariff preferences or reduced tariffs, or even zero tariffs, on African
exports. By mid-2010 China had provided preferences on 4,700 items. This
increased African agricultural exports to China as well as its exports of steel
and copper materials, chemical fertilizers, and electronics.317 It is difficult to
say how much this has stimulated African economies, but given how experts
have assessed the importance of the open American market in helping devel-
oping countries grow economically, it has been very meaningful and if put
in dollar terms would be vey large. Moreover, China has suggested it will
provide preferences on 95 percent of the items on China’s customs database
in the future.318
China has also provided financial help to a number of African countries

through currency swaps. In some cases the amounts have been very large, in
the double digit billions. China has also assigned certain countries a priority
in terms of a destination for Chinese tourists. Both have had a very salutary
impact on the said nation’s economic development.
Many of China’s aid and investments have consisted of very large
amounts of money pledged to Africa with the allocation of its use and
the nations to benefit to be worked out later. Most were promises made in
the context of or at important meetings, especially those of the FOCAC.
Many of China’s loans were bundled. Many of its pledges of aid and invest-
ments were subsequently allotted to Chinese companies that acquired pro-
jects through bidding.319 China’s aid/investment diplomacy in Africa in
this respect is different from and perhaps ahead of its involvement in other
regions of the world.
Unlike during period one when China avoided big projects, except for
the Tan-Zam Railroad, China has financed many huge, often billion dollar
projects, during period two. Much of that funding went to building what
would commonly be called infrastructure projects. For a number of good
reasons China favored this kind of foreign aid: Chinese leaders were very
aware that China knew how to build infrastructure. China had done it his-
torically and had done it well; China was very successful at it both at home
and elsewhere in the world in recent times; Chinese companies could eas-
ily compete with Western countries in terms of costs, speed of work, and
quality. Thus China decided to build infrastructure projects throughout the
world and Africa was a favorite spot.320 China became known in Africa and
around the world as “the builder.”
One special reason for this in Africa’s case was the fact that Africa lacked
infrastructure. Several years ago the African Development Bank declared
that Africa needed $30 billion annually over a period of ten years to fix
the problem.321 The International Monetary Fund has confirmed that this
problem persists.322 Moreover, China needed to offer help in this realm lest
many of China’s other projects, including those related to obtaining energy
and natural resources, could not be finished or made effective when done.
As noted earlier Chinese leaders also perceived that China could increase its
influence on the continent and, by extension, the global economy through
infrastructure building. China indeed found that big aid infrastructure
projects enhanced its image in Africa (and elsewhere).
Thus China put huge amounts of aid and investment funds into dams,
roads, bridges, railroads, and communications projects in Africa. It is inter-
esting to note that a meaningful portion of China’s infrastructure work was
paid for by international financial agencies—including 10–20 percent of the
costs of construction in Africa undertaken by the International Development

Agency.323 In short, China bundled its aid with other countries and some
global organizations. It was not usual for China to do this.
It has been estimated that China’s infrastructure projects in terms of
value were one-third hydro-power, one-third transportation, and around
17 percent telecommunications. By 2008, China had built 27 dams in
African countries.324 Subsequently it was many more; in fact, the number
became a matter of speculation because of a lack of a definition and other
problems.325 It used its experience at home to do this in Africa. The same
could be said of building economic zones. China had done this domesti-
cally and had done it successfully. It is thus reasonable that Chinese leaders
sought to utilize China’s own experience in engineering economic growth at
home this way and apply it to Africa.
China’s new and much larger foreign assistance has had the effect of
markedly increasing Sino-African trade. As noted China did not tradition-
ally trade much with Africa. Its foreign aid during phase one changed that,
but not a lot. In 1978, Africa accounted for less than 1 percent of China’s
total trade. As late as 1989, China’s commerce with Africa was still but a
third of that with Latin America, while Holland with a population of but
14 million people traded with China 30 percent more than all of Africa.326
In the 1990s the situation changed dramatically. From 1990 to 2000,
China-Africa trade increased by 450 percent. Trade between China and sub-
Saharan Africa grew 100-fold from 1990 to 2010.327 In one year, from 2002
to 2003, it grew over 50 percent. It had quadrupled by 2007, at which time
it lagged behind only the United States and France among Africa’s biggest
trading partners.328 By 2013 China became Africa’s leading trading partner
with $200 billion in goods changing hands each year.329
As noted in earlier chapters China needed to export to keep its facto-
ries running and workers employed lest the government face social unrest.
Chinese leaders realized that China could sell its products in Africa, which
on account of their style and quality, would not sell well elsewhere. So Africa
was a good starting place. China, its decision makers reckoned, could also
go up market later just as Japan did.330 And this has happened. In 2000,
China’s exports to African countries were mainly textiles and clothing
(28 percent), machinery and transportation equipment (27 percent), and
other manufactured goods (26 percent). In 2009 China exported signifi-
cantly more high-end capital goods: communications equipment (20 percent),
vehicles (19 percent), electronic (18 percent).331
China’s aid and investments have had a tremendous impact in other
ways. Based on the observed unique aspects of China’s foreign aid and
investments, their size, and their successes, a number of writers have used
the term the “Chinese model” for providing financial assistance. China’s
help certainly differs from Western aid. One author describes China’s com-
mercial activities in Africa this way: China builds roads, railroads, dams,
spreads its wireless networks across Africa, and when asked builds hospitals,
clinics, and orphanages. Against the backdrop of Western “colonial arro-
gance,” Chinese “can do” mentality and humility have impressed Africans.
Many praise China for economic help with such comments as perseverance,
courage, and efficiency. According to one writer, Africa welcomes competi-
tion in Africa that shakes up the Western, Lebanese, and Indian business
monopolies.332
But does China’s financial assistance really constitute a model? Chinese
leaders usually deny this. They say China has not been trying to export its
economic or political system to Africa. Rather, China has simply been utiliz-
ing African nations’ successful developmental experiences. Chinese officials
say this a lot. Some say China’s approach is simply pragmatism. Perhaps the
best way to answer the question about whether China is a model for helping
other countries develop is to look at China’s aid successes and the responses
of African leaders to China’s foreign aid.333
China has truly provided a much sought after alternative (to Western
countries and international organizations) for African countries seeking
aid and investments and wanting to expand their trade and other commer-
cial relations. China has appealed to African countries on the basis of its
policies of anti-hegemony, national sovereignty, and noninterference. These
ideals were put into a document called “China’s Africa Policy” issued in
2006—which advanced specifically the principles of independence, equal-
ity, mutual respect, and noninterference in each other’s internal affairs.”
African leaders applauded these principles or guidelines and feel that China
has lived by them.
China in providing aid and investment funds eschews strings or ties and
endeavors to keep costs down. In contrast, World Bank loans have an aver-
age of 60 different conditions and benchmarks. Senegal’s president noted
that China’s aid did not have conditions—in contrast to the “patronizing
approach” of Europe.334 In Mozambique Western aid donors paid $350 mil-
lion a year for 3,500 technical experts working in country—a sum equal to
400,000 local workers.335 China paid its workers the salaries of local work-
ers, sometimes less. It was reported that Chinese doctors working in Gambia
received only an $80 per month living allowance.336
In this connection it needs to be noted that while its national interests
were, and are, the driving force behind its aid giving, most, nearly all, of
China’s aid was directed in some way, directly or indirectly, toward advanc-
ing Africa’s economic development.337 And it succeeded. Experts have noted
that never before in history has African countries’ economic growth been
so fast. They say that China literally lifted numerous African countries out
of poverty.338 One writer states that Africa registered 5.8 percent economic
growth in 2007, in large part because of Chinese investments.339 According
to a Chinese source, from 2002 to 2008, Africa’s economy grew by an annual
average of 6 percent, 2 percent of which it attributed to Chinese aid.340
China’s aid work in Africa has, of course, been criticized for causing dis-
locations of various sorts. China not being aware of local conditions and
its companies giving aid to help themselves rather than the host country,
have been fairly common. There has been no shortage of complaints leveled
against China’s foreign assistance for other reasons. One matter has been
China’s use of its own labor. While China’s labor has not been criticized
as overpriced as the aid personnel of Western countries and international
bodies have been, China has been accused of hiring its own people and not
hiring locally; hence its aid does little to alleviate high levels of unemploy-
ment in African countries. There have even been rumors heard in African
countries to the effect that China uses convict labor to work on projects in
Africa and that China plans to “colonize Africa” by sending its workers there
who will stay.341
Only some of this bears any truth or is on balance a serious problem. It is
true that China has utilized Chinese managers and labor in many of its pro-
jects to the disadvantage of locals looking for work. But in many cases this
was necessary. The Tan-Zam Railroad case has been mentioned. Chinese
engineers and managers were needed to make the project work and gener-
ate a profit. In other cases there seem to have been good reasons. Or at least
Chinese companies have complained of local labor: lacking skills, high turn-
over rates, high absenteeism (which increases labor costs by one-fifth), etc.
In other words, it is not just the policy of Chinese aid decision makers want-
ing to hire Chinese.342 There is still another reason (not often mentioned)
for China to bring its own employees: Africa suffers from a talent problem
that includes skilled labor. A brain drain caused by Western countries and
international agencies that “poach” local talent, and has a negative impact
on local planning and economic growth has been mentioned. China has
certainly done this much less.343
China, it is said, is only interested in African natural resources and its for-
eign aid and investments are tools for exploiting these resources. Some have
even labeled China’s foreign policy in Africa as “resource based” and there-
fore lacking in morality.344 No one who studies the situation would doubt
that China seeks to obtain energy and resources; it doesn’t have enough to
fuel its industrial growth and its booming economy. It uses foreign assis-
tance to acquire them. The truth is that China has financed energy and
resource exploration and extraction projects in order to buy the resources

put into the market as a result of foreign assistance.
But, according to the World Bank, this has been obvious in only seven
African countries. Chinese officials say that among the hundreds of Chinese
aid projects in Africa, only a “tiny minority” are resource related.345 It seems
fair to say that a considerable amount of China’s aid, if investments are
counted as aid, has gone to facilitate the development of energy and
resources. But China’s aid and investments to Africa is large and what some
consider an excessive focus on resource development is a matter of percep-
tion or opinion. It is probably not an inordinately big focus for China; it may
be only 10–20 percent.346
Anyway commodity exporting is vital to the economies of at least half
of sub-Saharan African countries accounting for more than a quarter of the
total exports of most nations of this region, including Angola, Nigeria, and
South Africa—the continent’s three biggest economies. When China has
purchased less, the countries of Africa worry that they cannot sustain the
5-plus percent growth of the past decade that many credit to China.347
Another charge leveled against China’s foreign aid is that it provides
money for recipient countries to buy only Chinese products to keep China’s
factories going and its workers employed. There is certainly some truth
to this. As noted in Volume 1, Chapter 3, China’s economic development
scheme followed the capitalist model. China overproduced and the govern-
ment feared social unrest caused by unemployment if its factories closed.
Thus the charge China dumps its excess products in African countries.
Yet there was a demand for Chinese products because of their lower
prices. They have been made readily available through aid agreements
whereby Chinese companies were given contracts and Chinese businesses
were allowed to trade and sell in the host country. If one were to believe
that based on mercantilist thinking, the singular purpose of China’s aid was
to get rid of its excess production and other motives were not important,
one would expect China to maintain a huge favorable balance of trade with
Africa. This is not the case. In recent years, the balance between China’s
exports to and imports from Africa has been quite even.348
Yet another complaint is that China purveys a large amount of arms to
African countries. Unlike period one, in recent times, most of the arms
China has purveyed to other countries have been sales, though recipients
often have paid for weapons using Chinese foreign aid grants or loans. As
elsewhere China has provided only scant information about its arms aid or
sales. What are the facts we know? China was second largest arms providers
to Africa during the period 1999–2002, purveying 13.2 percent of the total
or around $500 million and from 2003 to 2006 ranked third with about
the same amount.349 This means that China delivered $1 billion in arms to
African countries in a six-year period. However, by comparison other forms
of aid dominated China’s aid activity in Africa even if all of its arms deliver-
ies are counted as aid (which most were not). Arms aid was thus in percent-
age terms only a small part of China’s aid and investments in Africa.
Finally, to assess China’s foreign aid to African countries from its national
interest perspective, one must consider how its aid and investments have per-
formed in terms of helping China realize its foreign policy objectives.
In return for its foreign assistance or simply because African leaders
liked China or didn’t like the West or at least were happy about having a
choice (it is impossible to discern the difference), China has received strong
support from African countries for many of the important tenets of its for-
eign policy. This is important for China for the obvious reason that Africa
in numbers (of nations) is large. One-third of votes in the United Nations
General Assembly and half of the Non-Aligned Movement are African.
Also bloc voting in Africa is common. Clearly it has made important dif-
ferences in China’s conduct of its diplomacy.
African nations, it might be said, unabashedly helped China deal with the
negative image it acquired in the West due to the Tiananmen Square inci-
dent. African nations did not feel it was a serious matter as it was viewed in
the West. Many felt it was an internal matter and the question of sovereignty
was at stake. They did not want their own sovereignty to be challenged.
Namibia, Zimbabwe, Angola, and Gabon all sent messages of understand-
ing to the Chinese government after the Tiananmen Square massacre. Many
in Africa felt the West was exaggerating the significance of the event and
using it to bash China.
Africa made a huge difference in China winning the diplomatic war with
Taiwan. It certainly involved “checkbook diplomacy” as many observers
called the contest. But Taiwan also did it. Did the recipients really mind?
Certainly most African countries did not. Some revelled in the attention
and the benefits this aid competition accrued to them. In any event, China
won. (See Volume 2, Chapter 4.)
Beyond the competition for diplomatic recognition Beijing also won
African support on other aspects of its Taiwan policy. As noted, in 2005,
China’s parliament, the National People’s Congress, passed a law called
the “anti-succession law” stating it would use nonpeaceful means to protect
China’s sovereignty and national territory. The law was aimed at possible
secession efforts in Taiwan or at the latter’s unwillingness to negotiate reuni-
fication over an extended period and at outsiders supporting an indepen-
dent or separate Taiwan. The African Union and 17 African countries (all
of whom had received China’s foreign aid) gave their support to the law.350
In September 2007, the United Nations General Assembly voted not to

place the issue of Taiwan’s membership in the United Nations on the
agenda. The large number of African countries supporting Beijing’s posi-
tion made a difference.351 Soon after that the votes of African countries
proved critical to the International Olympic Committee’s awarding China
the Olympics in 2008.352
China has also won strong African support for its views on human rights.
In 1983, when China proposed the principle that a nations’ history and
culture should be considered when looking at it human rights record, most
African countries agreed; this became the Bangkok Declaration. In 1997, at
the Second Asia-Africa Forum, 44 African nations reaffirmed their support
of the Bangkok Declaration principles favored by China.353 At the FOCAC
meeting in 2006, China expounded on the idea that the United Nations
Human Rights Council should respect national boundaries of sovereignty.
FOCAC nations supported China.354
In short, China’s aid and investment diplomacy has played an important
role in winning over African countries and gaining their support for many
of its foreign policy objectives. It seems likely this will continue to be in
coming years.
CHAPTER 3
China’s Foreign Aid and

Investment Diplomacy in Other
Regions—Europe, the Middle East,
Latin America, and Oceania
Introduction
China has purveyed foreign aid and investments to a number of countries
not in the blocs or regions assessed in the previous chapters. This includes
aid to several European (at the time Communist Bloc) countries, a number
of Middle East countries, some Latin American countries, and even never-
Communist European countries. The list also includes a number of mostly
small countries in Oceania.
China extended foreign aid to several Eastern European Communist
countries during period one motivated initially by a desire to advance the
struggle against Western imperialism while helping build Communist Bloc
unity, but later to compete with the Soviet Union. Albania was by far the
biggest recipient. In fact, Albania was one of China’s largest beneficiaries
of foreign aid anywhere. China’s aid to Albania, however, ended in the late
1970s. China provided aid and investments in lesser amounts, though some
were not, to some other European countries in both periods one and two.
Early on, China’s leaders viewed the Middle East as an area where it
could relate to countries that were anticolonial and anti-imperialist, where
socialism had some appeal, and where there were prospects for starting and/
or supporting wars of national liberation. China’s foreign aid to Middle East
countries was also given for the purpose of helping China break out of its
isolation and win diplomatic recognition.
During phase two of its foreign aid giving, China’s foreign assistance to
Middle Eastern countries declined both in terms of the number of recipient
countries and in total yearly amounts. Many countries did not need aid
because of profits derived from oil and those that became rich on oil sales
helped others in the region. Thus China converted much of its aid into
construction and other projects for profit while selling arms and consumer
goods. China found the Middle East a place for Chinese investment funds,
which, more than elsewhere, were truly investments. Beginning in the mid-
1990s, China took a much greater interest in Middle East oil and exchanged
construction and other projects for oil.
China provided significant foreign aid to Cuba for a while after the
Cuban revolution based in considerable part on Castro applauding the
Chinese model of revolution. But Cuba needed more aid than China could
provide and the Soviet Union became Cuba’s almost sole provider. Chinese
aid ceased. In recent years China has reestablished its aid and investment
relations with Cuba.
Early on China considered Latin America a US sphere of influence and
did not try to make inroads there, though Beijing did extend aid to a few
countries in the region at specific times and for narrow purposes. During
period two, China made large investments in countries in the region, mainly
for the purpose of energy and resource acquisition. In some cases foreign aid
provided the entrée. China also sought to market its products.
China has given foreign aid to a host of countries in Oceania. The most
salient motive for China giving aid to these countries was to undermine
Taiwan’s diplomatic status. However, Beijing has also viewed the area as
strategically important and has shown an interest in the natural resources
in some countries.
China’s motives for giving foreign aid to countries in the geographic
regions not covered in previous chapters vary considerably. This is natural
given that its relations with the recipient countries mentioned here are very
different. However, as is the case elsewhere, China has used foreign assis-
tance to enhance its security and its global image and has called much of its
financial help to countries in this other category “investments.”
Aid to European Countries, I

China first extended foreign aid to a European country in 1954 in the form
of a gift to the Albanian government for $2.5 million to commemorate
the nation’s tenth anniversary.1 Not long after this Beijing gave Albania
20,000 tons of wheat, 100,000 meters of cloth, 2,000 tons of rice, 2,000
tons of sugar, and some other commodities. In December that year, China
Europe, the Middle East, Latin America, and Oceania ● 93
signed an aid agreement with the Albanian government for a loan amount-
ing to $12.5 million at 0.5 percent interest to be used during the period
1955 to 1960.2
China extended aid to Albania mainly to promote Communist Bloc
solidarity.3 Also Beijing sought to help a Communist nation when it was in
need. At the time Albania was under severe economic strain due to a drop in
food production following the collectivization of agriculture. It is probably
also relevant that Albania was a small country and the poorest among the
Eastern European bloc countries, making it possible for China’s assistance
to have an impact.
In 1959, China pledged further aid to Albania in the form of a loan
worth $13.75 million earmarked for the purchase of industrial equipment
during the period 1961 to 1965.4 In this case China was motivated by differ-
ences with the Soviet Union rather than seeking to promote bloc unity. The
Kremlin had taken punitive actions against Albania for adopting a stance
similar to that of China on ideological matters, bloc affairs, and relations
with the West. Added to the mix of motives, Chinese leaders may have had
an interest in Albanian chromium or in acquiring a base of operations there.
Finally, Beijing wanted to send arms aid to Algeria and possibly some other
countries in the area and needed a transit point.5
In any event, in 1960 when Sino-Soviet differences escalated, Moscow
assailed China for “factional activities” and cited Albania in the charge.
Soon the feud devolved into an “economic war” with China providing
Albania sufficient economic aid to keep it as an ally.6 Chinese leaders later
called it an event of “great historical significance” since, as Chinese leaders
asserted, the Soviet leadership “no longer tolerated the slightest criticism of
its errors.”7
Thus, in April 1961, China promised a much larger foreign aid donation—
$123 million—in the form of a loan to facilitate Albania’s new Five Year
Plan.8 This was one of China’s largest aid pledges. The package included
funds for capital goods, agricultural machinery, and commodities. China
also sent technicians and 2.2 million bushels of wheat that it purchased from
Canada (since China was short of food at home). The amount of the loan
was large enough to supplant the aid that Albania had been receiving from
the Soviet Union and other Eastern European countries.9 China had appar-
ently decided to ensure that Albania was not affected by the sudden termi-
nation of Soviet aid and saw the Kremlin’s action as similar to it stopping aid
to China in 1960, for which it sought retribution. One might say also that
in view of famine conditions in China, Chinese leaders were determined to
demonstrate to the world that China could get along without Soviet aid and
that it could even compete with Moscow’s aid giving.10
Chinese leaders reckoned that they had to fill the gap caused by the
pullout of Soviet aid (including even stopping tourists from going there).
Otherwise Moscow might force Albania to succumb to its economic pres-
sures and change its policies toward China.11 Beijing’s foreign aid to Albania
reflected clearly the degree to which Sino-Soviet relations had devolved.
In fact, Beijing made it clear to Albania that China would replace Soviet
aid. Chinese leaders also took the opportunity to say publicly that Soviet
aid was not generous and Albania, like China, could get along without it.
In addition, Chinese leaders wanted to look both generous and principled
in their aid giving to Albania, declaring that China’s economic cooperation
with Albania would be based on internationalism, on being practical and
realistic, and on helping to overcome difficulties. Zhou Enlai stated that if
Albania had any difficulty paying back its no-interest loan, payment would
be deferred or the debt cancelled.12
The aid that China promised it delivered. This included the construc-
tion of 37 industrial enterprises in the areas of mining, metallurgy, electric
power, farm machinery, chemical fertilizer, paper mills, timber, radio, tele-
communications, and a number of other projects.13 In 1965 China extended
another loan to Albania, though neither the amount nor the conditions was
disclosed.14 In 1966, an agreement was signed between the two countries
regarding assistance to Albania’s petroleum industry, but again no details
were provided.15 In 1967, China disclosed that it had built two radio stations
in Albania, that a nitrogen fertilizer plant constructed with Chinese aid was
recently opened, and that work had started on a $30 million textile mill.16
This was ample evidence that Chinese aid was being used and was having
an impact.
After the Soviet Union’s invasion of Czechoslovakia in 1968 and the
Kremlin announced the Brezhnev Doctrine (which Chinese leaders took to
mean that the Soviet Union assumed the right to protect friendly regimes in
other Communist countries and that it might try to change China’s leader-
ship that was hostile to the Kremlin), Beijing sought to solidify its relations
with close friends.17 Chinese leaders announced that China would assist
Albania in the event of a military threat and subsequently signed an arms
assistance agreement with the Albanian government.18
Soon after this China leased four naval bases from Albania for 66 years
and sent a number of its navy’s ships there for deployment.19 Subsequently
it was reported that China had built some missile bases in Albania and had
equipped the Albanian military with jet aircraft and submarines.20 Some
observers said that China was seeking to “outflank” Moscow.21
In 1970, China and Albania signed another agreement that included
Chinese military assistance. Soon it was reported that China had provided
Albania with patrol boats, MiG-21 fighters, and armored personnel carriers.22
Mao ostensibly hoped to create a “second front” following a serious esca-
lation of tension on the Sino-Soviet border in 1969. Beijing also sought,
it appeared, to gain a foothold in Eastern Europe, as it lacked a good base
of operations for supporting revolutionary activities in the region. Grateful
for China’s aid and angry at Moscow, Albania proposed a resolution in the
United Nations that read that China be granted membership in the world
body and “spoke eloquently” about justice in the proposal and China’s sta-
tus as an important world power.23 It was this Albanian Resolution that
passed the United Nations General Assembly in 1972 whereupon China was
admitted to the world body.
However, at this time China’s relations with the United States began to
change. Initially the Albanian government did not respond, presumably
because it was seriously dependent on China’s foreign aid. Albania’s presi-
dent Enver Hoxha is reported to have said that he was “giving his silence in
not assailing China for consorting with the enemy.” Mao responded by giv-
ing more aid.24 In fact, China continued to provide aid funds to Albania,
the total of which in 1977 reportedly ranged from $200 to $400 million
(though this was obviously a low estimate and did not include military
assistance).25 Notwithstanding, that year the dispute between the two
countries got worse and China disenrolled 50 Albanian students studying
in China. In response, Albania requested China call home its aid personnel
said to number between 700 and 2,000.26 In 1978 China terminated its aid
to Albania.
According to one source, China had up to that point agreed to build
142 enterprises in Albania, 92 of which were completed and 23 were close
to being done and had dispatched 6,000 technicians to Albania.27 China’s
aid had made possible the production of steel, chemical fertilizers, caustic
soda, acids, glass, copper processing, plastics, and even arms. China had
helped expand various other Albanian industries including electricity, coal,
petroleum, machine tools, textiles, building materials, and communications
and broadcasting.28
Clearly China’s financial help to Albania was vast. China declared at the
time of ending its aid that from 1954 up to that time it had provided Albania
with more than $5 billion in aid (no doubt a large portion of which was mili-
tary aid). Beijing also mentioned that it had trained 2,000 Albanian cadres
and that it had provided Albania with the newest tanks and fighter aircraft,
even before the Chinese military got these weapons. Beijing also stated that
all of the military aid it had provided to Albania was free.29
China’s foreign ministry blamed Albania for the deterioration of rela-
tions between them and China severing aid, saying that the Albanian
government had suddenly refused to accept invoices for goods that were
delivered by China in violation of their aid agreements, thus making it
impossible to continue work on aid projects.30 The Chinese government
also said that the Albanian government “decided to pursue an anti-China
course, had deliberately abandoned the agreements signed between the two
sides concerning Chinese aid . . . and sabotaged their economic and military
cooperation.”31
There were, of course, other causes for the break. Albania assailed Mao’s
Three Worlds view as “regarding my enemy’s enemy as my friend” thus
making it possible to be “bedfellows” with reactionary regimes such as the
Shah of Iran and Augusto Pinochet of Chile. Albania also regarded the
United States, China’s new “friend,” as its enemy. Finally, China’s economic
reforms, from the Albanian perspective, turned China to the right politi-
cally and economically and into a capitalist country with which Albania
could not be friends.
From China’s perspective there was no longer any point in helping Albania
with money it could use at home for its own development given China’s new
economic goals. Also, China’s foreign policy makers were now pragmatic in
looking for friends who would help China oppose Soviet expansionism in
more matter-of-fact ways, and in that context ideology played a less impor-
tant role.32
China extended foreign aid to seven other European countries during
period one of its aid giving. Five were Communist countries (Hungary,
Romania, East Germany, Czechoslovakia, and Poland), plus Malta and
Cyprus. In no case was China’s aid very significant. China’s aid to all of them,
however, gave some indications of China’s foreign policy goals at the time.
China pledged economic assistance to Hungary after the anti-Soviet
revolt there in 1956. This consisted of a grant for $7.5 million and a loan
for $50 million at 2 percent interest.33 Beijing gave this aid to maintain
bloc unity. Mao wanted to preserve the Sino-Soviet Alliance and thus sup-
ported the Warsaw Pact. He may have also taken a strong interest in help-
ing Hungary in view of the fact what happened there may have portended
trouble for him at home. Mao saw a relationship between the intellectual
ferment in Hungary and that in China. It was even reported that avoid-
ing a “Chinese Hungary” was the reason for Mao’s decision to launch the
Hundred Flowers Campaign, which he did shortly after this.34 Another fac-
tor was that Hungary had suffered economic dislocation at this time and
other bloc countries were sending aid; China wanted to join in helping.
In any event, stability was restored in Hungary and it remained loyal to the
bloc. The Soviet Union maintained its controlling influence over Hungary
and China did not continue to provide aid.35
Thus it might appear that China got little for its aid, which merely
helped relieve a conflict involving an Eastern European country far from
China. But the case was more complicated. While helping the government
of Hungary, China took a tough stance against the revolt and in doing so
supported Stalinists in the Soviet Union who were critical of Khrushchev’s
leadership and who propounded a harder foreign policy line.36 China’s aid
to Hungary also demonstrated that Beijing’s foreign aid was going to be
expanded in scope, which it was.
China first provided foreign aid to Romania in early 1970 with a
$21 million grant given for flood relief.37 Romania was suffering consider-
able flood damage at the time. In any event, China followed this up with
another, bigger, pledge at the end of the year. Neither side gave details on
this aid, but other sources said it was probably a grant in the range of $200
to $300 million.38 China also provided Romania with arms aid in the form
of patrol boats, torpedo boats, and hydrofoil boats. Some of these were later
produced in Romania—one of the few cases at this time of Chinese weapons
being manufactured in another country.39
China was motivated to give this aid because of its strained relations
with the Kremlin. As in the case of China’s aid to Albania, Beijing sought to
help Eastern European Communist countries pursue greater independence
from Moscow.”40 However, there was also speculation at the time that China
sought Romania’s help in facilitating China’s efforts to attain better rela-
tions with Yugoslavia. Another factor was that Romania had played a role in
facilitating President Nixon’s visit to China. Finally, China may have been
interested in Romanian oil exploration technology.41
China’s foreign aid to Romania was not continued for a variety of rea-
sons. First, China could not compete with the much larger Soviet aid dona-
tions. Second, China decided not to continue to vie with the Kremlin for
influence with these two countries, the main factors being their proximity
to the Soviet Union, the importance of the Warsaw Pact to them, and other
Eastern European countries cooperating with the Kremlin to keep Romania
in the Warsaw Bloc. Finally, as mentioned earlier, there was sentiment in
China that it should keep its money at home to use for its own development
and Beijing should not give aid to nations with significantly higher stan-
dards of living than China.
In addition to Albania, Hungary, and Romania, China provided some
food aid to East Germany, Poland, and Czechoslovakia in the 1950s and
early 1960s. The dollar values were not significant, though China’s extreme
sacrifices to do this and its efforts at building bloc solidarity and winning
support from some Eastern European countries were. (For further details see
Volume 1, Chapter 4.)
In April 1972, China extended foreign aid for the first time to a non-
Communist European nation—Malta. Malta’s prime minister visited China
and returned with the promise of a $42 million loan.42 The loan was repay-
able over a period of 20 years and had a grace period of 10 years.43 The aid
was designated to build a dock that could accommodate ships of 300,000
tons and glass and chocolate factories.44 This aid was given at the time dip-
lomatic relations were established with Malta and China’s motivation for
giving aid can be seen as related to that.
However, according to one writer, China won satisfaction in giving aid
to European countries, Europeans having treated China as a colony in the
past and having expressed condescension about China’s level of economic
development.45 Chinese leaders no doubt also saw Malta as strategically
located and its foreign aid possibly giving China a presence there. In the
agreement was a provision for China to provide technicians, who arrived in
August that year.46
In 1972, China provided Malta a long-term interest-free loan of $13 million
for the construction of seven whole plants and two “technological cooperation
projects.” In 1975, China made another aid pledge to Malta worth $36 million
and three years later signed an agreement on aid, though the details were not
made public.47 In 1985, China helped Malta build the Marsaxokk Breakwater
though it is uncertain how much funding China provided.48
China extended foreign aid to Cyprus during the late 1970s reportedly
worth $200 million.49 Neither side, however, gave any publicity to this aid.
Beijing may have pledged the aid in connection with the two countries
establishing diplomatic relations in 1971. Or China viewed the instabil-
ity and ethnic unrest in Cyprus as an opportunity to increase its influence
there. Alternatively China may have seen the situation as a chance to support
United Nations peacekeeping; in December 1981 China for the first time
voted to extend a peacekeeping operation there.50
In any event China did not continue to purvey aid to either Malta or
Cyprus. Chinese leaders felt they needed the money at home and also had
other places to send its foreign aid.
Foreign Assistance to European Countries, II

During phase two of its giving foreign assistance China extended meaning-
ful foreign aid and/or investments to Macedonia, Moldova, Ukraine, and
Belarus. It also provided Greece investment funds. Most of China’s financial
help to these countries was labeled investments, though the term was often
vague and it generally did not conform to the Western definition of foreign
direct investments.
In 1991, Macedonia, a former part of the Yugoslav Republic, gained

independence and established diplomatic relations with Beijing. However,
in 1999, Macedonia broke off diplomatic ties with China and established
relations with Taiwan, a decision made by the new government following
an election in Macedonia and apparently based in considerable part upon
Taipei making a large offer of foreign aid. Chinese leaders were naturally
upset over this move by the government of Macedonia and took punitive
action by breaking off relations with Macedonia and vetoing a UN resolu-
tion to extend the mandate of the UN Preventive Deployment Force there to
defuse an ethnic conflict. Hence, UN peacekeeping in Macedonia could not
be resumed. This, incidentally, was one of the few times China had used the
veto in the United Nations. (See Volume 2, Chapter 4 for further details.)
However, China’s actions did not have lasting consequences.51 In June,
Macedonia switched diplomatic relations back to Beijing due to China’s
reversal of its position on peacekeeping and its offers of economic aid. China
at the time promised the government of Macedonia a US$83 million loan
to build a hydroelectric project.52 In 2003, according to a Chinese source,
a dam that was part of the project, was storing water.53 In 2004 and again in
2007, China announced foreign aid to Macedonia. Beijing did not provide
information on the 2004 promise; regarding the 2007 pledge it said it was
a 2 million Eurodollar (around $2.74 million) grant.54 It may be that China
pledged more aid or investment funds that were not announced or Macedonia
assumed that such would be forthcoming. In any event, Macedonia did not
break off diplomatic relations with China again.
In the ensuing years China financed a number of aid projects in
Macedonia including school reconstruction, providing computer supplies,
and more. However, no details were provided on the value of this assistance.
In 2011, a Chinese company provided Macedonia with 23 school buses at
a value of $1.6 million. There subsequently occurred an accident with one
of the buses hitting a truck and 23 people getting killed. There was some
criticism of China for the deaths and some blowback in China with neti-
zens saying that the buses were better than those used in China and that
many Chinese students did not have buses to ride.55 Though China was not
deemed at fault the incident reflected the Western media’s penchant for criti-
cizing China. In any event, in 2012 Macedonia’s prime minister presented a
case for Chinese investments to representatives of Chinese companies, call-
ing his country a springboard for economic relations with Europe where
Chinese companies did not have to worry about burdensome regulations nor
face any impediments in exporting to other European countries.56
In early 2009, China signed a memorandum of understanding with the
government of Moldova to provide a loan reportedly for $1 billion.57 In
June, China signed an agreement formalizing a loan for that amount at a

rate of 3 percent repayable over 15 years with a 5-year grace period.58 This
was a huge enlargement of its foreign aid (though some wanted to call it
an investment) on China’s part, not only in terms of the amount but also
considering Moldova’s size. Moldova’s gross national product at the time was
only around $8 billion and its government budget $1.5 billion.59 The aid was
also double the amount of a recent agreement-in-principle loan by the Soviet
Union to Moldova and bested funding from the US Millennium Challenge
Account by even more. (Moldova had used less than $25 million of the latter
aid, which had a $300 million limit). The money from China’s loan was to
be channeled through Coven, a large Chinese construction company, and
was used for energy modernization, water systems, treatment plants, and
agriculture.60 The Chinese government also reportedly said that it would
“guarantee financing” on projects considered necessary and justified by
Moldova over and above the $1 billion loan.61
There followed considerable debate as to Beijing’s motives in giving
such a large loan to a country far from China that never before aroused
Beijing’s interest and that lacked natural resources. One explanation was its
timing: China was experiencing growing unemployment amid a downturn
in exports, and therefore the loan was intended to create jobs and stimu-
late China’s economy.62 (As noted in Volume 1, Chapter 4, this is one of
China’s important concerns that affected its foreign aid giving.) Another
reason suggested was that Chinese leaders wanted to relocate some of its
huge store of foreign currency that was mostly in US dollars.63 Beijing, of
course, also wanted to demonstrate that it could project its influence into an
area heretofore controlled by Moscow and thus compete with Russia using
its financial power to make gains in a proximate area or show its displeasure
with Russian leaders. Moldova was regarded in Moscow as within its “near
abroad” area (or sphere of influence).64
Alternatively, Chinese leaders may have made the loan to keep Moldova
from moving into the Western camp and joining NATO. At the time of
granting the loan there was friction with the United States over US influ-
ence in Central Asia, Washington’s alleged fanning of the flames of Islamic
opposition to Beijing, oil, and other issues, not to mention what appeared to
be a general decline in US-China relations.65 China may have also seen this
as an opportunity to gain significant influence over a poor European coun-
try that was in financial trouble, and thereby eclipse Western and global
institutional donors. Finally, Beijing may have simply wanted to diversify its
investments abroad and expand its trade and other global ties.66
In any event relations remained cordial and in mid-2013 China announced
another donation of foreign aid to Moldova to the tune of $8 million in
addition to 1,200 computers and 200 printers for Moldovan students.67

China ostensibly sought to maintain good relations with Moldova as a place
to invest, do business, and connect with Europe.
China began to extend significant foreign aid to Ukraine following a visit
to China by the new president Viktor Yanukovyche in late 2010 and a return
visit by President Hu Jintao a few months later. China subsequently granted
financial assistance worth a staggering $3.5 billion, $1 billion of which
was to be used to build a rail line from the capital Kiev to Boryspil (where
Ukraine’s main airport is located). The rest of the money was not designated.68
Heretofore China had granted only minor aid to Ukraine though China had
become involved commercially with Ukraine in 1998 with the purchase of
an unfinished aircraft carrier for $20 million that Ukraine had bought from
the Soviet Union in 1991 and had been unable to complete.69
Not long after the 2010 agreement was reached, the China Development
Bank extended Ukraine an $85 million loan to upgrade a coalmine. It was
later reported that China would provide further funding of as much as
$1 billion for the purpose of extracting coal. Also at this time the National
Bank of Ukraine signed a currency swap agreement with China’s central
bank worth $2.4 billion.70 Shortly thereafter China pledged $43.7 million to
Ukraine to finance the transition from (Russian) gas to coal and $372 million
to finance the development of agriculture.71
By 2012, China had granted a total of $7 billion in financial help of
various kinds to Ukraine plus the $2.4 billion currency swap mentioned
above.72 The latter assistance China pledged in the context of European
Union countries and the United States labeling Ukraine a nondemocratic
country and their aid thus being cut.73 In any case, both Europe and the
United States were not able to offer significant aid in view of their financial
problems.74
China had some other not mentioned motives for its large investments in
Ukraine. Chinese leaders sought to market China’s products in Ukraine and
reportedly wanted access to Ukraine’s technology.75 This included the fol-
lowing: materials science electrodynamics, thermal physics, machine con-
struction, and pharmacology, not to mention Russian military technology
that Ukraine possessed.76 China’s automaker Geely (which had purchased
Volvo) also wanted to set up operations in Ukraine.77
But China’s real motives seemed primarily geopolitical: China sought
influence over Ukraine’s economy while weaning Ukraine away from Russian
influence by making it less dependent on Russian gas. Beijing may also have
calculated that it could block the expansion of the European Union. Ukraine
being a buffer zone or a vortex nation in terms of Russian-European relations,
China perceived it might gain some leverage over both through its inroads
into Ukraine. Chinese leaders may have reckoned that as a big power China
should, and would, influence distant (but important) events.
In 2013 it was reported that Ukraine had become China’s new strate-
gic partner and that in addition to the $10 billion in investment China
had extended earlier Beijing was offering an additional $8 billion. It was
reported tersely that this money was to go to the “development of Ukraine’s
economy”—although discussed at the time was a deep-water port on the
Crimean Peninsula, the only such port on the Black Sea and an important
transportation link between China and Eastern and Western Europe.78 Cited
also in the context of the offer were China’s seeking quicker and cheaper
routes for its products to get to Europe and China’s desire to project it com-
mercial influence.79 Finally, it seemed relevant that China showed an inter-
est in Ukraine’s agricultural products and even buying land there. Three
months after this investment was announced it was reported that China
was helping Ukraine with an investment of $2.6 billion to increase food
production.80 Whether this was a new extension of financial help or part of
the earlier agreements was not certain; what was certain was that China was
interested in obtaining Ukraine’s foodstuffs.
When the crisis broke out in the spring of 2014 over Russia’s aggressive
actions against Ukraine, China was a major beneficiary. The events caused
a severe deterioration in US-Russian and European Union-Russian relations
and accelerated Moscow’s need for closer ties with China. Hence China
improved its negotiating position as a buyer of energy and resources from
Russia and much more. China’s relations with Russia became closer but
Russia was, in the eyes of some analysts, a “junior partner” in the relation-
ship.81 After this the United States had little hope of causing a split between
Russia and China. Tension with Moscow also diverted US attention away
from Asia and weakened its “Asia pivot” while prompting Moscow to create
a “Russian Asian pivot.” Importantly Chinese investments were not put in
danger by the conflict as Ukraine needed Chinese funds more than ever. In
any event, trade flourished and China appeared to be a peacemaker82
In March 2015 China offered Ukraine another huge loan, $15 billion,
reportedly for housing construction to revive its collapsing property market.
Also mentioned at the time were Ukraine’s aeronautics industry and its infor-
mation technology sector that was a growth industry and needed capital.83
China may have still been interested in Ukraine’s agricultural exports. Its
exports of corn to China surpassed that of the United States at this time
while Ukraine’s’ agricultural trade with China had increased 56 percent
since the Russian annexation of Crimea in 2014. This may have been the
loan included for an arms-for-agricultural deal between China and Ukraine
or this was a part of another loan.84
In the late 1990s and the years that followed, China provided finan-
cial help to Belarus in sizeable amounts as reflected in the growth of
trade between the two countries, increasing from $34 million in 1992 to
$2.5 billion in 2010. However, at the time few details were provided either
on China’s aid or its investments going to Belarus.
In 2009 it was reported that China provided a currency swap agreement
amounting to $3.2 billion ostensibly to help Belarus cope with financial
problems due to the global recession.85 In June 2011, China agreed on a loan
to Belarus for $1 billion to build a cellulose plant.86 Other projects followed.
In 2011, it was estimated that Beijing’s total financial help to Belarus had
reached $15 billion.87 In late 2011 Belarus president Lukashenko confirmed
that amount or more when he mentioned that China had provided $15 billion
in commercial loans, several billion of that on preferential terms.88 In 2012,
it was reported that the total was $16 billion of which $6 billion had been
allocated.89
Some details on China’s financial help to Belarus were gradually made
public. Part of China’s money went to build an industrial park ($3 billion),
an airport for Minsk, funds to refurbish the Chernobyl area, and other
projects.90 Also funds were used for cement plants, electrification of rail-
roads, a highway, a national satellite communications system, a hotel, and
aid to food and agricultural industries.91 China, it was said, had provided
the funds for 20 large projects in Belarus.92
China’s motives for providing this large amount of money to Belarus
were a matter of speculation. Relations between Belarus and the United
States were strained over an agreement on returning enriched uranium to
Russia and owing to Washington’s condemning the undemocratic nature of
President Lukashenko’s 2010 reelection. Relations were also strained with
the European Union and Russia. Finally Belarus was experiencing severe
economic problems.93
Clearly Beijing could not see much point in helping Belarus for its energy
or other resources. Commercial cooperation and profits for Chinese com-
panies were likewise limited. China’s motives thus appear to be purely of
a political and/or strategic nature. In 2009, China supported Belarus to
become a partner in the Shanghai Cooperation Organization—the only
European nation invited. President Lukashenko was very supportive of vari-
ous tenets of China’s foreign policy, lauded China and its financial help, and
visited China frequently.94
In mid-2013, Lukashenko visited China again; this time he sought
financial help to prevent another devaluation of his country’s currency.
Several agreements were signed, but data on any aid or investments were
not made available. China’s intentions were unclear though it was said that
Beijing might have sought access to the Russian market through Belarus,
which had membership in a customs union with Russia.95 However, most
often mentioned as China’s motives in providing aid to Belarus (and also
Moldova, and Ukraine) were Beijing wanting to help countries in financial
straits due to the 2008 global recession and in that way win praise for its
economic growth while other countries (including the United States and
Europe) were floundering. It was mentioned that China needed an outlet
for its huge foreign exchange reserves often cited to be around $3 trillion.96
Finally, Beijing’s generosity seemed to reflect its drive to enhance its
global image and its plans to build trade routes, including the Silk Road,
to Europe.
In 2008, Cosco, China Overseas Shipping (Group) Company, invested
$620 million for a 30-year concession in the Greek port of Piraeus. Some
observers considered this at least partly foreign aid since Cosco overpaid by a
considerable amount—some observers said as much as five times the market
value.97 In 2009 as Greek politics turned to the left the dockworkers union
launched a strike that paralyzed the port. Thus China’s investment looked
like a poor decision. Notwithstanding what appeared to be a setback for
China’s investment Cosco reached an agreement whereby it hired workers
through a nonunionized employment ageny and put more money into the
venture, raising its investment to $1 billion with suggestions it would put
in more money. In a few years container traffic soared and the port became
Europe’s busiest for passenger traffic, and both officials and the media were
saying that it was a resounding success.98
In 2014 and 2015 China met with Greek and other European leaders
about investing more in Greece. To some observers Chinese money seemed
the only solution to the “Greek problem.” China was investing heavily in
the European Union and because of this and China’s plan for the new silk
road, it appeared China was interested. On the other hand, Chinese lead-
ers expressed caution about getting involved in a nation on the verge of
economic collapse that might leave the European Union and that had not
seriously undertaken needed economic reforms.99
Aid to Middle Eastern Countries, I

China’s first foreign assistance to a Middle East country went to Egypt in
1955. China proposed buying $10 million worth of Egyptian cotton and
President Gamal Nasser accepted the offer.100 This obviously was a kind of
aid donation as Western countries were purchasing less Egyptian cotton and
China sought to help Egypt; certainly it had the same impact as aid. China
also agreed to sell Egypt 60,000 tons of steel at a price 20 percent lower
than the world market price at a time when steel was desperately needed
at home for China’s Five Year Plan.101 One writer said these transactions
showed China’s willingness, in the manner of the ancient tribute system, to
sacrifice its own economy for political relations.102
Zhou Enlai had met Egyptian president Nasser at the first Afro-Asian
Conference held in Bandung, Indonesia, that year and China’s aid offers
followed from that. Chinese leaders viewed Nasser as an important world
leader and a fellow opponent of imperialism. Beijing also recognized the
prominent role of Egypt in the Middle East—with more than a third of the
world’s Arab population residing there.103
China first extended official or formal foreign aid to Egypt in November
1956 in the form of a loan in foreign currency for $4.7 million.104 This
may have been gratitude for Egypt extending diplomatic relations to China,
which Western countries disapproved of since China was labeled a rogue
nation during and after the Korean War. In addition, Nasser had proven his
credentials as a militant anticolonialist by his actions during the Suez War
that year, which China lauded.105
A credit of 20 million Swiss francs (US$18.8 million) followed the
next year.106 The purpose of this aid was to help the Egyptian government
deal with the economic shock caused by severing ties with several Western
countries after the Suez Crisis. To further show China’s support for Nasser,
Beijing offered to send volunteer soldiers to Egypt, though this may have
been more a symbolic gesture than serious.107 In any event, China’s leaders
liked President Nasser and felt he would play a central leadership role in the
Middle East and gave aid in part to support his presidency.108 Beijing also
favored Egypt’s progressive, socialist government.
China was not disappointed with the results of its aid: Egypt influenced
other countries in the region to grant diplomatic ties to China.109 Egypt
supported China’s stance on neocolonialism, Taiwan, and a number of other
issues. Cairo subsequently became a base of operations for China to make
contacts with a number of Middle East and African countries.110 The loan
also facilitated trade. In short, China made considerable foreign policy gains
with a fairly small amount of foreign assistance.111
However, there were limits to the gains China could make. Nasser
opposed Communist influence in Egypt and Communist movements in
the region. He disagreed with China’s position on the revolution in Iraq
and some other matters. In 1958, Moscow agreed to build the Aswan Dam
and committed $335 million to the project and as result Soviet influence in
Egypt grew at a time when Sino-Soviet relations were turning sour. Hence
China began to look elsewhere, in particular to Algeria, as a more promising
friend in the region.112
Nevertheless, in 1964 China made another aid pledge to Egypt in the

form of an $80 million loan.113 These funds were to be used to build textile
mills, sugar refineries, and some other projects. In addition China sent
250,000 tons of corn to Egypt when US food aid was cut.114 China may
have hoped that Cairo would support its view on the Afro-Asian Conference
or that it could use Egypt as a base of operations to support its involve-
ment in the Congo crisis. China failed in its first objective and the crisis in
the Congo soon ended. China may also have hoped to influence Egypt’s
relations with Yemen and Iraq and dampen Egypt’s support of India dur-
ing and after the 1962 Sino-Indian War.115 China did not succeed here
either. With the Cultural Revolution starting soon after this and Egypt
moving closer to the United States and the Soviet Union and becoming
more dependent on both for aid, it is questionable whether much the aid
China promised was used.116
It is of interest that there were reports at this time, notably after China
successfully did its first nuclear weapon’s test in October 1964, that China
might assist Egypt in building a nuclear weapon.117 This seemed credible
in view of the public statements Mao and other Chinese leaders had made
to the effect that the more countries that had nuclear weapons the better
because the imperialist countries would no longer have a nuclear monopoly.
In addition, Zhou Enlai, in reply to Nasser’s message of congratulations on
its nuclear test, said (about nuclear technology) that China would share its
knowledge with everyone.118
In fact, Egypt sent a delegation from its government’s nuclear author-
ity to China. Later it was said that China did provide Egypt some help in
the nuclear realm that it did not extend to other nations.119 However, the
Egyptian government subsequently said that China had refused to share its
nuclear technology with Egypt.120 In the end China’s nuclear help to Egypt
probably was of little or no consequence.
When the June 1967 war broke out with Israel, China immediately sent
150,000 tons of wheat to Egypt and promised a $10 million loan in hard
currency with no date of repayment set.121 China complemented its assis-
tance with statements indicating that its aid’s purpose was to cement better
relations with other Arab countries. That goal was in some measure real-
ized, but China’s aid to Egypt did not become significant because China
could not fulfill Egypt’s aid needs or compete with the aid Egypt was receiv-
ing from other countries.122 In addition, as Sino-Soviet relations worsened,
Moscow made pointed efforts to undermine Chinese influence in Egypt.
However, after a rupture in Egyptian-Soviet relations later that year,
China responded to an Egyptian request for aid and agreed to provide in the
form of a gift of 30 jet engines and spare parts for Soviet-made MiG fighter
planes in the Egyptian Air Force.123 This was followed by a promise to sup-
ply parts for Soviet-equipped factories and a protocol agreement to provide
$50 million (apparently in aid) in strategic raw materials.124
In 1976, President Anwar Sadat abrogated a treaty of friendship with the
Soviet Union, giving China a clear opening to improve relations with Egypt.
Beijing forthwith provided the Egyptian government with more MiG air-
craft engines and various spare parts for its other weapons. Egyptian offi-
cials offered to pay for the help, but China replied, “We are not weapons
traders,” apparently meaning the aid was a grant.125 Not long after this, then
vice president Hosni Mubarak visited Beijing and signed a military protocol
agreement with China. This represented another success in China’s diplo-
matic rivalry with the Kremlin.126 In 1977, China provided the Egyptian
government with ground-to-ground rockets.127 During the period 1979–80,
China delivered F-6 fighter planes to Cairo, reportedly at a low cost, while
taking a Soviet MiG-23 in return (to examine and extract technology) as
partial payment.128
In 1958, China was reported to have provided some weapons to the
Algerian National Liberation Front (FLN).129 In any event, in 1959 China
made a pledge to provide arms aid worth “around $10 million.”130 After that
China continued to funnel weapons to the FLN until Algeria won inde-
pendence from France in 1962 and the FLN became the ruling party in
Algeria. FLN leaders expressed gratitude for China’s aid, though they were
apprehensive that too close a relationship with China might prompt US
intervention.131
China’s main gain from its aid to the FLN came from it burnishing its
reputation for supporting anticolonial struggles or wars of national libera-
tion. In fact, Algeria’s liberation struggle was considered the most important
of any that China supported.132 FLN leaders said publicly that they fol-
lowed Mao’s model of revolution. Meanwhile, the Soviet Union did little to
help the FLN. Not of a small consequence of China’s aid, Algeria, after the
revolution succeeded, provided Beijing with an alternative (to Cairo) base of
operations.133 Finally, Algeria immediately extended diplomatic recognition
to Beijing.134
In mid-1962, shortly after establishing diplomatic ties, China gave
Algeria 3,000 tons of wheat, 3,000 tons of laminated steel, and 21 tons of
medicine.135 In October 1963, China offered Algeria formal aid in the form
of a $50 million loan repayable over a 20-year period.136 The aid was allocated
for small industries, land reclamation, and road building. In 1964, China
provided Algeria with a commercial ship and four transport planes, presum-
ably part of the previous year’s aid pledge.137 Meanwhile China continued
to provide Algeria arms aid, much of it aimed at training revolutionaries in
or to go to Angola, Mozambique, Portuguese Guinea, and South Africa.138

In 1965, guerrillas trained by Chinese advisers in Algeria tried to overthrow
the government of Morocco and did influence the war in the Congo.139
But the Algerian government needed much more to make its economic
development plans succeed; thus it sought and got extensive aid from
the West and the Soviet Union. In fact, from 1962 to 1965, Algeria was
reportedly the third largest recipient of Western aid in the world, totaling
$1 billion.140 China’s aid was overshadowed. Still Beijing retained good rela-
tions with the Algerian government.
China gave economic aid to Algeria to influence its decisions on the sec-
ond Afro-Asian Conference scheduled to be held there. This aid had a dis-
tinctly anti-Soviet tone as noted in Volume 1, Chapter 4. However, that year
the Ben Bella government in Algeria was overthrown and China’s aid efforts
came to naught, as did its hopes to construct a Third World group that
China could dominate.141 Then the Cultural Revolution enveloped China.
Beijing made friends with the new Algerian government, but the former
close relationship, which its aid had facilitated, was not restored.
China may have given Syria aid when it was part of the United Arab
Republic (with Egypt) in the context of establishing trade ties in 1955
and diplomatic relations the following year. If so, it was probably not
large.142 In any event, in 1963 China extended Syria an interest-free loan for
$16 million repayable over ten years.143 Chinese leaders were likely motivated
to help Syria because (1) of a strong Communist movement there, (2) as it
was one of the most hostile countries toward Israel, and (3) it was a prospec-
tive base of operations for China in the region. There were also signs that
Syria was disappointed in Soviet policies in the Middle East, especially its
stance toward Israel. In any event, the government was overthrown shortly
after China’s aid initiative and little if any of China’s aid was drawn.144
In 1966, Chinese aid to Syria was put back on track and some of it
was used for a cotton-spinning mill that was completed in early 1967.145
However, after the Six-Day War, during which Syria suffered a serious deple-
tion of its arms and extensive war damage, it needed much more aid and the
Soviet Union became the major provider. Still Chinese aid was delivered as
reflected in an increase in the volume of their trade.146 China also provided
the Syrian military a $15 million gift of weapons, which may have been
instrumental in the army’s overthrow of the government in 1969.147 It was
likewise reported that China gave aid to champion the struggle against US
imperialism.148
In 1971, China signed another aid agreement with the Syrian govern-
ment providing for a loan of $36 million.149 The next year China made yet
another aid pledge to Syria; this one was worth $40 million. The funds
were designated for building two yarn factories and expanding one already
under construction. Also mentioned was a stadium.150 Few other details
were provided concerning either of these promises except that they were
loans.151 Anyway fighting broke out again and Syria turned to other coun-
tries, including France, for aid; thus it was doubtful if much of China’s aid
was actually delivered.
In 1958, China made an aid pledge of $16.3 million to Yemen in the form
of a loan for the construction of a road (the Sanaa-Hudayda highway, the
first modern road in the country), a cigarette factory, a glass factory, some
“goods,” and technical assistance.152 Soon there were 800 Chinese workers
in Yemen and not long after that it was reported there were more Chinese
personnel in Yemen than in any other Middle East country.153 China’s aim
in giving this aid was probably to establish a presence where it perceived
there was a revolutionary situation. Chinese leaders could build a reputa-
tion for China’s anticolonial stance (Yemen was recently independent) and
its anti-Western foreign policy. In addition, Yemen was also a poor country
where a small amount of aid would have an impact.154 Finally, Chinese lead-
ers were also no doubt grateful to Yemen for it granting diplomatic recogni-
tion to China early (one of the three Middle East countries, Egypt and Syria
being the other two, to do so) and advocating other countries follow its lead
and for Yemen’s favorable votes (for China’s position on various issues) in the
United Nations.155
In early 1959, China sent 10,000 tons of wheat to Yemen to alleviate a
food shortage there.156 In 1964, China pledged $28 million more in aid to
Yemen in the form of an interest-free loan to build another road and pur-
chase consumer goods.157 As a consequence China seemed quite hopeful of
establishing a foothold in Yemen. The aid may also have been motivated by
an effort to compete with the Soviet Union for influence. The Kremlin had
just offered Yemen $72 million for road building, obviously to compete with
China. China’s aid too, judging from its timing, may have been related to
the upcoming Afro-Asian Conference. Finally Beijing was obviously driven
to some degree by its desire to build good relations with the new govern-
ment. The new president of Yemen visited China at this time and a treaty of
friendship was concluded that included a provision for arms aid.158 In any
case, Chinese workers were seen in following months working on a road
and a textile mill. It was reported that the number of Chinese in Yemen at
this time numbered 3,300.159 Some of them were reportedly involved in the
conflict going on at that time in Yemen.160
In 1970, China sent 5,000 tons of wheat to Yemen to help deal with food
shortages caused by a local drought. China also sent more arms.161 Some of
the arms went to the Palestine Liberation Organization.162 In 1972, China
reportedly offered a new loan to the government of Yemen for $20.2 million,
putting China’s aid to Yemen ahead of that of the Soviet Union.163
In the fall of 1968, China announced that it was providing the govern-
ment of Southern Yemen with a loan worth $12 million for building a road
and wells along the road.164 Southern Yemen, or the People’s Republic of
Yemen, had declared independence the preceding year breaking its colo-
nial ties with Britain, at which time the United Kingdom terminated $60
to $70 million in foreign aid.165 Worse, civil war followed independence.
Chinese leaders sought to influence the conflict, which they considered was
a people’s war in a geopolitically critical location (on the southern coast of
the Arabian Peninsula).166 China also supported a guerrilla movement in
Dhofar (the southern province of Oman) via Southern Yemen.167 Finally,
China perceived that the Soviet Union’s relations with Southern Yemen were
problematic.168
In July 1970, China extended another loan to Southern Yemen; it was for
$43 million and was interest free. It was allocated for building three more
roads.169 China wanted to compete with the Soviet Union and sought a larger
local presence in view of the fluid situation there. By 1971, it was reported
there were more than 400 Chinese aid workers in Southern Yemen.170 It
was also said that China had sent arms aid and Chinese personnel (many
military officers) to provide training to the Southern Yemeni Army. Last but
not the least China’s aid had an impact on trade between the two countries,
especially on China’s exports (which grew by over 70 percent in 1971).171
In 1972, China and Southern Yemen signed an agreement on economic
and technical cooperation, and China extended another loan free of interest
in January the next year worth $22.7 million allocated for buying Chinese
products.172 This brought China’s aid to South Yemen to $78 million—
making it the second largest recipient of China’s foreign aid of any country
in the region while reportedly putting China’s financial help at four times
what the Soviet Union had offered.173
In 1972, China pledged $40 million in aid to Tunisia and an undis-
closed amount to Morocco.174 China’s motives were unclear but gratitude
for granting diplomatic relations may have been a factor. China also sought
closer relations with the two countries in the context of it expanding its
presence on the world scene. In any event both nations voted for the Albania
Resolution in 1971 to admit China to the United Nations.175 However, it is
uncertain if much of this aid was used.
China provided foreign aid to what it called the “Palestinian nation” in
1960 when it sent funds through Syria to help Palestinian refugees.176 Beijing
gave strong verbal support to the Palestine Liberation Organization (PLO)
after it was formed in 1964, seeing that the organization was influential in
the fast-evolving politics of the Middle East.177 In fact, China was the first
non-Arab country to grant it recognition and did so even before most Arab
governments.178
China began providing arms aid to the PLO in the mid-1960s, at first in
the form of old rifles and light machine guns made in the Soviet Union.179
By 1967, China was reportedly sending the PLO new weapons, and after the
Six-Day War with Israel, Kalashnikov guns made in China were found in
PLO arsenals in the Gaza Strip.180 It was later reported that China provided
the PLO with free arms aid worth $5 million between 1965 and 1970 and
that the Palestinians had fought almost exclusively with Chinese weapons.181
In the mid-1970s PLO leaders declared that China’s “material support” to
the organization was larger than Soviet support and when training was
considered (which Beijing was providing in China) the ratio was three to
one.182 However, China’s support consisted mainly of small arms because
nearby Arab countries opposed China providing heavy weapons and, on
one occasion at least, seized some Chinese tanks.183 China’s help also went
to the more moderate Fatah leadership. However, its arms aid to Fatah was
opposed by some Arab governments, including Iraq, Syria, and Egypt.184
China’s aid to the PLO experienced other problems. Chinese leaders
viewed the Palestinian struggle as a Maoist-style war of liberation, which
explained China’s arms aid. However, the Palestinians did not agree on this
count; they viewed their struggle as a conventional war.185 After the Six-Day
War, China could not provide the quantity of weapons the PLO wanted,
which gave the Soviet Union the upper hand.186 Still, in 1970, Yasser Arafat
visited China to get more arms aid, some of which went to Jordan, where it
may have had an impact during the Jordanian Civil War, though PLO influ-
ence waned as a result of that conflict.187 Meanwhile, in 1971 China’s rela-
tions with the United States changed dramatically. As a consequence Beijing
no longer saw the Palestinian conflict in the same light and lost interest in
supporting it.188 China did not break with the PLO, but its help after that
was mostly in the form of verbal statements of support.189
Aid and Investments to Middle East Countries, II

China nearly ceased giving foreign aid to Middle Eastern countries in the
1970s. There were several reasons for this. First, China cut its aid giving over-
all at this time. Second, a number of Middle Eastern countries became rich
as a result of the Organization of Petroleum Exporting Countries (OPEC)
pushing the price of petroleum much higher after the global oil crisis in
1973. Many Middle East countries that did not get rich from oil received
grants and loans from those that did Third, China’s relationship with the
United States changed dramatically. Accordingly, Beijing accepted the pri-

macy of America’s interests in the Middle East and generally chose not to
challenge Washington’s policies.190 Fourth, China’s main interest in the area
shifted from supporting wars of national liberation to finding sources of oil
and securing markets for Chinese goods.191 Finally, following the fall of the
Shah in Iran (with whom China had good relations) in 1979 and the assassi-
nation of President Sadat in 1981, coupled with problems in Muslim areas in
China, Beijing came to see a danger in Islamic extremism.192 This required
new policy thinking on China’s part.
Pursuing its own economic growth and its need for capital to do that,
in a number of cases in the Middle East, China turned its aid projects
into for-profit business arrangements. China also shifted most its arms
aid into arms sales.193 Some of China’s activities in both categories, invest-
ments and commercial ventures and arms sales, deserve attention. Some
had an aid component in the sense that China offered special prices and/
or financing. In other cases the recipients could not find other countries,
often for political or security reasons, willing to deal with them and pur-
vey them arms.194 In one case, notably Iran, Tehran could not readily
obtain nuclear technology or help to build a nuclear weapon from any
other country.195 Finally, in terms of China’s objectives and the conditions
for its sales or “investments,” they frequently resembled aid. These cases as
well as China’s real foreign aid (China did not cut its aid to Middle Eastern
countries completely) deserve analysis.
Much of its foreign aid that China turned into investments and com-
mercial ventures focused on oil procurement. As noted in previous chapters,
after 1993 China became a net importer of oil. This happened because of
its rapid economic growth driven by its very fast-growing manufacturing
sector. China’s need for energy grew quickly. The Middle East was China’s
main source; in fact, by the mid-2000s around half of China’s imported oil
came from the Middle East.196 To pay for this oil China needed to export
goods to Middle Eastern countries and/or find commercial projects to build
there. It did both. In 2009, China became the world’s largest exporter of
commercial goods to the Middle East (surpassing the United States).197
Also the Middle East became a very large market for China’s military
hardware.198 In the 1980s, Middle Eastern countries were spending $30 to
$40 billion a year on arms (including, of course, Iran and Iraq during their
war in the early 1980s). As a result most of China’s $8 to 10 billion in annual
arms exports went to Middle Eastern countries, the most important being
Iran, Iraq, Egypt, Syria, and Libya.199
Notwithstanding its new focus on commercial relations and its turn-
ing aid into sales for profit, during period two China extended foreign aid
to some countries it had aided during period one. It also added new ones.
However, most countries, especially the large recipients, that became bene-
factors of China’s foreign assistance got aid in the form of advantageous
commercial deals and/or arms sales that the recipient could not obtain else-
where and sometimes at “friendly” prices that can be considered to have an
aid component.
In the case of Egypt, Chinese leaders perceived, as during period one, that
they might influence other countries in the area through Cairo. They also
found Egypt under Hosni Mubarak cordial. In 1983, President Mubarak
traveled to Beijing to buy weapons and reportedly purchased $80 million
worth. This was a sale, but was at “preferential prices” extended to China’s
friends. China also rescheduled Egypt’s debts worth $100 million.200 During
the period 1982 to 1985, China provided Egypt with 80 F-7 fighter planes,
13 fast attack ships and frigates, 6 submarines, and various other weap-
ons.201 Because of the favorable prices and conditions for repayment (includ-
ing doubts that there would be repayment) these transactions must be seen
to have had added to a large element of aid.
In 1990, President Mubarak paid his fourth visit to China, at which time
Chinese leaders agreed to reschedule repayment on Egypt’s $167 million
debt to China.202 In 1997 China provided military aid to Egypt in the form
of a gift that included parts for Soviet-built MiG-17s and MiG-21s and other
weapons.203 Chinese leaders at the time sought to help Egypt parry Russian
pressure that had resulted from Egypt’s policies toward Somalia and its sup-
port for the Eritrean independence movement.204 It was later reported that
during the period 2002–05 China had provided Egypt with $400 million
in arms.205
Subsequently, in 2005, China’s Exim Bank extended a $16.3 million loan
to Egypt to refurbish a polyester factory and a $20 million loan to renovate
the Cairo International Conference Center and build a hotel.206 Although
China referred to this as an investment it seemed to differ little, if at all,
from previous aid loans that China had extended to Egypt.207
This was also true, though perhaps less so, of money China provided
to build an economic zone in Egypt, discussions of which started in 1994.
Then, in 1998, the two countries agreed on a joint effort to build an “indus-
trial zone” just below the southern entrance to the Suez Canal. TEDA
Investment Holdings in China, the developer of one of China’s most suc-
cessful SEZs, handled the transaction on China’s part.208
Soon after the project was started it was learned that the Egyptian part-
ners had embezzled a large amount of funds from the project.209 China did
not make an issue of this and TEDA went ahead with the project alone.
By 2009 the zone was operational and an opening ceremony was held that
was attended by Premier Wen Jiabao. Chinese companies had invested

$180 million in the project.210 Though it had the markings of a commercial
venture on China’s part there were no known attempts by China to retrieve
the money lost from the embezzlement. Meanwhile, the Egyptian govern-
ment organized an international tender for its proposed North-West Suez
Special Economic Zone and in March 2009 TEDA won the bid.211
Thus the makeup of China’s assistance to Egypt was murky as was the
amounts. In any event, by 2006 it was reported that China and Egypt had
signed joint venture agreements worth $2.7 billion. These Chinese funds
brought 150 Chinese companies to Egypt to do business. Indicating there
was no clear distinction between foreign and aid investments, China built
a marble recycling plant in Egypt that was not labeled an investment.
Elsewhere, a Chinese company acquired a 20 percent stake in a container
port in Port Said, while the Chinese Harbor State Company built a sec-
ond container facility there for $220 million. China also put Egypt on the
“friendly country list” for Chinese tourists and in 2009, 90,000 Chinese
visited Egypt.212
China’s foreign assistance to Egypt clearly brought results. An opinion
poll showed that 52 percent of the Egyptian population espoused a favorable
view of China; only 17 percent had a similar view of the United States.213
By 2011, China surpassed the United States in exports to Egypt. However,
that year, due to the chaos and violence in Egypt associated with the Arab
Spring movement, Chinese aid and investment activities were disrupted and
a number of Chinese advisors, technicians, and workers had to depart. Yet,
there was no serious anti-China protest and Beijing pledged continued eco-
nomic support for Egypt. China ostensibly wrote off a considerable part of
its financial losses.214
The setback did not discourage Chinese leaders. In 2013 China reported
that its investments in Egypt increased by 60 percent over the last two years.215
Mention was made of electrification and Chinese companies establishing a
presence near the Suez Canal and in Egypt’s economic zone. Later it was
reported that China’s investments in Egypt had “hit $10 billion in 2013.”216
While China did not officially provide economic aid to Iran during
period one, its arms sales at special prices and conditions were well known,
as was China’s involvement in building infrastructure and other construc-
tion projects. During the Iran-Iraq War, or the first Persian Gulf War,
which began in 1980 and lasted till 1988, China became the world’s largest
supplier of munitions to Iran.217 Although this was in considerable part or
perhaps entirely sales; much of it constituted weapons in exchange for oil.
Iran did not have other good sources of arms because the United States,
European countries, and most other countries would not sell to Iran or sold
less. For China the amounts of its sales reached hundreds of millions of dol-
lars annually from 1982 to the end of the war, peaking at $625 million in
1987. Arms sales continued in large amounts until after 1996 ($323 million
that year).218 China, it was reported, supplied 41 percent of Iran’s weapons
purchases.219
This situation continued. China supplied sophisticated weapons, valued
at $200 million between 2001 and 2004, to Iran after the Iran-Iraq War
ended.220 This included Chinese Silkworm missiles plus anti-ship and
surface-to-air missiles. Some Chinese weapons ended up in the hands of
Iranian-backed terrorist groups such as Hezbollah, which prompted the
United States to place sanctions on Chinese companies.221 Many of the sales
were at “friendly” (discounted) prices. Most were paid for with oil.
China also undertook a variety of commercial projects in Iran during
period two. By 2005, China had more than a 100 construction projects
underway in Iran, including the Tehran subway system and a $3 billion oil
refinery. This is not to mention numerous deals to help with oil and gas
exploration, drilling, and pipelines, which were paid for with Iranian oil
exported to China.222 These were for-profit undertakings, not aid; but again
some of them only China would have undertaken. The refinery deals had
special significance because putting restrictions on Iran obtaining gasoline
was one means used by the United States and other Western countries to
ensure that sanctions against Iran work to force it to halt its nuclear weapons
program.223
China’s involvement in Iran’s efforts to go nuclear is also noteworthy.
In the mid-1980s China trained Iranian nuclear technicians and supplied
Iran with subcritical or zero-yield nuclear reactors in accordance with the
guidelines of the International Atomic Energy Agency (IAEA). 224 In 1991
and 1992, China agreed to sell Iran three Chinese reactors, one research
reactor, and two pressurized water reactors. China, however, subsequently
cancelled the first deal. In any case, the United States criticized China for
the sale of the other two reactors.225 It was reported that China signed a con-
tract with the Iranian government in 1995 worth $800 to $900 million to
assist Iran in the nuclear area and that thereafter China received $60 million
annually in payment for this.226
In 1997, however, China pledged that it would no longer assist Iran with
its nuclear program. In fact, the promise was made by China’s foreign minis-
ter Qian Qichen and was accepted by the US national security advisor to the
president, Sandy Berger.227 Nevertheless, in 2006, the BBC reported that
China continued to help Iran develop nuclear capabilities suggesting it did
so illegally; China responded that it had provided help only in accordance
with the Nuclear Non-Proliferation Treaty and IAEA guidelines.228
Since Iran was not able to acquire assistance to build its nuclear program
or obtain such weapons (though Russia also provided considerable amounts
of arms to Iran) China in a sense “gave aid” to Iran. However, China was
careful to avoid being seen as a proliferator of nuclear know-how or, as some
charged, a provider of such weapons to terrorists, so whether any of its offi-
cial actions were in technical violation of any agreement was uncertain.229
Subsequently it became known or at least perceived that China in some
critical ways undermined the sanctions against Iran, though it was also plain
that China did not help Iran by continuing such relations as much as it
had or could. The situation may be described as one wherein China needed
Iranian oil and saw the “Iranian problem” a convenient distraction to the
United States and Western Europe; yet it did not want to go too far and
upset Washington given the importance of US trade and other relations.
Moreover, it found Saudi Arabia (which is not on good terms with Iran)
a more reliable and bigger source of oil.230
In 2012 China’s investment in Iran plummeted, as did their bilateral
trade—87 percent and 18 percent respectively as a result of the sanctions
placed on Iran by the United States and Europe and China’s cooperation to
make them work. Still China was one of four nations (Japan, South Korea,
and India were the others) that purchased most of Iran’s oil and gas.231
In other words, China was cooperating to make the sanctions work, yet not
completely. It is also noteworthy that China was criticized in the United
States much more than the other countries for weakening the sanctions.
In any event, with the United States tentatively reaching an agreement with
Iran to halt its nuclear weapons program China made plans to forthwith
increase by double its investments in Iran.232
Iraq also purchased weapons from China. During the Iran-Iraq War, China
sold arms to both sides—as did the two superpowers. China sold weapons to
Iraq at “preferential rates” as it did to Iran; so the sales may have been partly
aid. Another factor was that Iraq, like Iran, had difficulty buying arms.233
At the time Iraq reportedly acquired 17 percent of its arms from China.234
Since China denied selling weapons to either side, the amounts of the
sales (like sales to Iran) have not been officially disclosed. However, US
intelligence sources reported in 1983 that China had become a major source
of weapons for Iraq, and its sales were said to “balance” its sales to Iran.
(Incidentally it was considered US policy to maintain a balance between the
two side and thus to prolong the war.) China provided light arms, artillery,
and ammunition.235 It was later said that China had purveyed to the Iraqi
government 260 Type-69 tanks (China’s newest).236
Iraq also received significant amounts of “investment” money from China.
In 1997, China National Petroleum Corporation reached an agreement with
Iraq’s national oil company worth $1.2 billion to develop oilfields in al-Ahdab
in southern Iraq. The expectation was that the fields would produce 90,000
barrels of oil a day. China’s opposition to sanctions against Iraq at that
time helped make the deal possible.237 In any event work was stopped and
Chinese personnel left before US forces invaded in 2003. In 2007, the deal
was renewed after China agreed to cancel Iraq’s debt to China, which was
said to be a whopping $8 billion.238 It appears that this debt cancellation,
which was originally called an investment, but now could be seen as aid,
paved the way for important new commercial deals.
In any event by 2013 China was reportedly investing $2 billion a year in
Iraq and was purchasing half of its oil exports. Some obervers described the
situation as one in which the United States paid the cost of the war there, but
China reaped the benefits.239 However, this was not entirely true as China
financing the development of Iraq’s oil sector resulted in big increases in
production that kept the world price of petroleum lower. Also China worked
with Exxon and other US companies in the efforts.240 However, due to vio-
lent conflict in Iraq in 2014 China had to evacuate a number of its people;
though, since China’s presence was more in the south where the conflict was
less intense, it kept many of its operations going. Anyway, China disclaimed
talk that it might use its financial clout to dampen the conflict.241
China provided some agricultural aid to Libya in the 1980s.242 But the
results were minimal. However, this aid may have afforded the prelude for
China to put huge amounts of money into construction projects in Libya in
2008 and also provide funds for oil exploration and extraction. That year
China signed contracts for engineering, construction, and services worth
$10.05 billion that employed 36,000 Chinese workers.243
It was later reported that in 2008 Libya was among the top three locations
for Chinese investments and by 2011, 26 Chinese companies had invested
more than $20 billion in Libya. This included 5,000 housing units started
in 2009 and vast infrastructure projects. In 2011, when the internal conflict
started in Libya, China abstained from the UN National Security Council
resolution to establish a no-fly zone over Libya. Beijing also opposed NATO
actions to force President Gaddafi from power. Therefore China was not
in favor with the new regime. In fact, after the violence there ended, it was
assumed that a significant amount of China’s aid loans and investments
were lost.244
China dispatched a guided missile frigate to the area and evacuated 35,860
Chinese citizens, mainly workers on oil and infrastructure projects and some
who were operating small stores and other private businesses. After the con-
flict ended, however, the Chinese government announced that it respected
the views of the Libyan people and said it would help in reconstruction
efforts. This worked, probably because the new regime respected China’s
aid and investment diplomacy and ignored its connections with the previous
government. China established amicable relations with the new government
in early 2012. Chinese companies werek thus welcomed to participate in
postwar reconstruction.245 Subsequently a new agreement was signed for
China to purchase Libyan oil.246
China established good relations with Algeria during phase one of its
aid giving. Cordial ties continued and China has had extensive commercial
relations since then. Algeria purchased Chinese arms.247 Chinese compa-
nies acquired oil from Algeria, though it did not become a major supplier
for China. China got contracts from Algeria to build refineries, roads, rail-
roads, buildings, and much more. Chinese engineers and workers in Algeria
numbered more than 50,000. Contracts awarded to China totalled as much
as $20 billion. But Algeria has not asked China for foreign aid or loans
in exchange for oil or other resources. Thus their commercial relationship
appeared to be exactly that.248 Algeria sold oil and other things to China
and awarded Chinese companies contracts based on their ability to work on
major projects and based on their quality and price.
It was reported in 2013 that China had invested $1.5 billion in Algeria in
the decade up to 2012 and that more than 30,000 Chinese were in country
building roads and railways and even a large mosque.249 Chinese money
also caused imports from China to increase by 25 percent and the Chinese
community there to rise to 40,000—the largest of any African country.250
Algeria’s political relations with China continued to improve, with the
two countries becoming “comprehensive strategic partners,” as did trade,
a 15-fold increase from 2003 to 2013. Chinese companies built a number of
important construction projects, including the Ministry of Foreign Affairs
building, part of the East-West Highway, a 400-seat opera house, and low-
cost government housing. Algeria became one of the top 15 biggest markets
for Chinese contractors and the second largest in Africa (after Nigeria).251
A similar situation obtains with both Morocco and Tunisia. As noted
China offered aid to both during phase one, but little came of this. During
the early years of period two, while new commercial relations between China
and the two countries were established there was little evidence to show
they were connected to China’s past or present foreign aid.252 China’s oil
companies began operating in Tunisia though the oil they procured was sold
on the international market rather than being shipped to China.253 China’s
exports to Tunisia soon totaled more than $1 billion per year. Commercial
relations with Tunisia increased also. Trade and other commercial ties were
interrupted by the events of the Arab Spring, but China offered aid to the
new governments and relations did not suffer noticeably.254
Very recently, in 2015, China spoke of Morocco as a base for Chinese

manufacturing. Also the two countries negotiated a number of economic,
financial, and technical agreements. It appeared that larger Chinese invest-
ments might follow.255 After the turn of the century, China announced sev-
eral grants of aid to Tunisia, totaling more than $150 million in loans and
gratis aid from 2000 to 2012 and $4.8 million in 2013 in the form of a grant
for military procurements. In 2013 the Tunisia government announced it
welcomed Chinese enterprises to invest in Tunisia and mentioned in par-
ticular infrastructure, which, it noted, China was good at building.256
In sum, China’s foreign assistance to Middle Eastern countries in recent
years has amounted to tens of billions of dollars mainly in weapons at prefer-
ential prices, “aid projects” for profit, loans that were written off, and invest-
ments and other financial deals. Much of this can be categorized as aid for
oil. China often took large risks and made transactions that other nations
declined. China’s aid and investment diplomacy was generally successful
though it suffered some serious setbacks as a result of the Arab Spring.
However, in the final analysis its image was not hurt badly and economic
and other relations were generally restored.
Aid to Latin American Countries, I

When the People’s Republic of China was established in 1949, Chinese lead-
ers perceived Latin America was too far from China for it to exercise much
influence, especially given the fact United States held sway in the region
economically and politically. But Mao also viewed Latin America as an area
potentially ripe for anti-imperialist and anticolonial revolution. Later China
saw Latin American nations as likely to join the nonaligned movement
where China sought to build good and countries that might support its vari-
ous foreign policy objectives, among them isolating Taiwan.257
Initially, China supported revolutionary movements in the region, but
generally those that were pro-Soviet.258 On its own Beijing supported some
nascent revolutionary movements such as those in in Mexico and Brazil,
but experienced no meaningful successes.259 Thus China’s foreign policy
made few gains in the region for some years and China found few rea-
sons to employ aid or investments as important instruments of its Latin
American policy.
In July 1960, however, China saw a new and promising opportunity. Fidel
Castro defeated the Batista regime, allegedly in a Maoist-style civil war, and
took over the Cuban government. China forthwith pledged economic help
to Castro, though no details were provided about what this would mean. In
any event, China soon delivered 10,000 tons of grain. Chinese aid personnel
arrived shortly after that and other goods followed.260 Not long after this
Che Guevara visited China and came away with a $60 million pledge in the
form of a non-interest-bearing loan to be used over the period 1961–67.261
Some of the loan was designated for Chinese technicians, thereby affording
China a presence in country; some was allocated for “equipment.”262
China’s premier Zhou Enlai told Castro at this time that China would
“furnish all necessary assistance to the Cuban people fighting for freedom.”263
Mao was apparently impressed by the fact that Castro had said that he had
used Mao’s model of revolution to come to power and perceived that Castro
was a true revolutionary, and may, he thought, with the help of China,
spread revolution in the region. Beijing no doubt also appreciated the fact
that Cuba immediately granted diplomatic recognition to China, the first
Latin American country to do so.264
In April 1961, when US president John Kennedy approved the Bay of Pigs
invasion by Cuban exiles, Beijing denounced Kennedy’s action and staged
protest demonstrations against the United States throughout China.265
While Soviet missiles were being delivered to Cuba, China continued to
send aid. When the missiles were withdrawn Chinese leaders accused the
Soviet Union of cowardice and a “Munich policy.”
Apparently perceiving that Castro was sincere in his pro-China state-
ments to the effect he applied Mao’s model in carrying out his successful
revolution, in 1963 China made another promise of foreign aid.266 No
details, however, were forthcoming. Probably little or none of this aid was
delivered as at almost the same time the Soviet Union offered more than
$400 million in aid and agreed to buy Cuban sugar, after which Castro
traveled to Moscow and publicly stated his agreement with the Kremlin’s
interpretation of the missile crisis and peaceful coexistence.267
In early 1964, Castro made another trip to Moscow to get more aid.
There he criticized China’s alleged actions to “split Communist parties in
Latin America.” In February 1966, precisely at the time another Soviet aid
promise was announced, Castro assailed China for not accepting 800,000
tons of sugar that it had agreed to buy and for not delivering the 250,000
tons of rice it had promised. He accused China of “brutal reprisals” of an
economic nature against Cuba for political reasons and criticized Mao for
spreading antigovernment propaganda in Cuba—“using,” he said, “methods
formerly employed by the U.S. Embassy.”268 At this juncture relations were
ruptured and China’s aid to Cuba ceased.
Reflecting the degree of Chinese bitterness toward Cuba and also the
depths of the Sino-Soviet dispute (and the two were related), in 1975 and
1976 Beijing actively opposed Cuba’s involvement (which included sending
troops) in the Angolan civil war. China supplied arms and other aid to the
opposing factions and sent aid through Zaire that was used against Cuban
soldiers involved in the conflict. In doing so China aligned with the United
States and South Africa; this hurt Beijing’s image with many African coun-
tries, though in so acting Beijing was able to relieve some Soviet military
pressure on their common border.269
Meanwhile, in mid-1971, China extended aid to another Western
Hemisphere country: Chile. Beijing had duly noticed, and praised, the
election of Marxist Salvador Allende as president in 1970. A few months
later Chinese leaders described Allende as being anti-imperialist and a pos-
sible friend and ally. Beijing then provided $2 million in the form of a loan
to the Chilean government to aid victims of a storm.270 Beijing followed
this up with a $70 million loan the next year to help small- and medium-
sized industries.271 According to one source, the loans were provided on the
most favorable terms of any of China’s foreign aid loans—repayment after
50 years.272 China must have extended some other aid to Chile that was not
announced as later it was reported that China’s total foreign aid to Chile had
amounted to $100 million.273
China sought a voice in the Communist Party in Chile and with the
Allende government and thought it might even establish a base of operations
in Chile.274 The Sino-Soviet dispute also played a major role. In any event,
China ultimately gained little influence in Chile: the Allende government
was overthrown in September 1973. Likely not much of China’s aid to Chile
was used before that happened.275
Beijing also took an interest in Peru. In late 1971, Peru granted diplo-
matic recognition to Beijing, the second South American country to do
so (after Allende’s Chile). China responded and promised foreign aid to
Peru in the form of a no-interest loan worth $42 million repayable after
30 years.276 The establishing of diplomatic relations may be seen as China’s
main motive. However, Beijing may also have seen Peru as a possible base
of operations and likely sought to upstage the Soviet Union’s aid to Peru as
the value of its donation exceeded a Soviet grant of aid worth $28 million
made at this time.277
Chinese foreign aid decision makers may also have been influenced by
the fact that a considerable portion of the population, 15 percent according
to some accounts, was of Chinese origin. Beginning in the 1800s there was
a wave of immigration of Chinese residents from nearby countries to Peru
to work in the sugar plantations.278 Another factor was Peru’s gratitude for
China’s support for jurisdiction over 200 nautical miles of territorial waters
that was of major concern at the time.279
In November 1971, China pledged aid to the government of Guyana
to help develop local industries. In early 1972, China signed a protocol
agreement and Chinese experts were sent to Guyana. Subsequently seven

projects were launched and it was disclosed that China had promised
$42 million in aid. In 1975, China extended credit to the Guyana gov-
ernment worth $10 million, though whether this was new aid or not was
uncertain.280
In the 1970s China’s policy toward Latin America changed with Beijing
improving relations with the United States and Spain (a country that had
considerable influence in the region), its abandoning support of wars of
national liberation, and focusing on establishing official ties with Third
World governments.281 Also, as with other Third World regions of the world,
China drastically downsized its aid giving to Latin American countries in
the late 1970s and 80s. In fact, China’s foreign aid donations to nations in
the region for all intents and purposes ended.
Aid to Latin American Countries, II

When China resumed purveying foreign assistance to Latin American
countries most of it was what both it and observers labeled as investments.
Though a definition was lacking, in any event, most of it went for pro-
jects, including transportation, infrastructure, and construction, to the
development of energy and natural resources, and opening markets for
Chinese products. A significant amount went toward developing agricul-
ture; China sought to buy food. Some financial transfers were emergency
help of some sort.282
China began providing meaningful financial help to Latin American
countries midway through the first decade of the twenty-first century coin-
ciding with China’s sudden huge accumulation of foreign exchange. Most of
the agreements were large. China needed energy, resources, and markets and
also a place to put its excess capital. Chinese leaders did not want to label its
financial assistance foreign aid at this time since that term was unpopular
in China. Thus most of the funds provided were called investments, though
future repayment was obviously not of great concern.
China’s financial offensive in Latin America began with Cuba.283 Beijing’s
relations with Cuba changed in the early 1990s as a result of the collapse of
the Soviet Union, which meant that Moscow would no longer underwrite
Cuba’s economy, causing Havana to experience a near-financial collapse as a
result. China saw this as an opportunity, and soon extended financial help.
In 1999, China and Cuba signed an agreement on joint intelligence oper-
ations. A facility in Bejucal was fitted with modern equipment, ostensibly
provided by China in order to integrate it into China’s global satellite net-
work. A second facility was subsequently opened to get information on US
military satellite communications.284 In 2000, the two countries signed a

protocol military agreement after which China reportedly shipped arms and
explosives to Cuba.285
More foreign assistance followed in the form of a number of long-term
low-interest loans. In 2001, when President Jiang Zemin visited Cuba, China
extended a new and large loan—for $400 million.286 In 2003, China and
Cuba signed a tourism agreement leading to an increase in Chinese visitors
designed to help the Cuban economy.287 In 2004, President Hu Jintao visited
Cuba and signed agreements deferring payment on four previous loans while
providing additional funding for telecommunications and money so that
Cuba could purchase 1 million Chinese-made television sets.288 In 2005,
China provided Cuba with a $6.2 million loan to purchase Chinese goods
and $350 million to help rebuild a network of hospitals and clinics. 289 In
2008, when President Hu visited Cuba again, China deferred payment on
an $8 million loan, extended a “gift credit” of $8 million, and offered a new
loan of $70 million for upgrading Cuban hospitals.290
This financial assistance produced results. Sino-Cuban relations improved
markedly. Havana sided with China on a number of global issues such as
US unilateralism, the unfair international order, and more. Cuba strongly
supported Beijing’s one-China policy and took measures to persuade some
countries in Latin America to dump Taiwan and extend diplomatic recog-
nition to Beijing.291 Many Chinese who had fled Cuba in the late 1960s
returned.292 Chinese consumer products became commonplace in Cuba,
government statements on relations between the two countries became very
friendly, and the two countries’ policies on regional issues showed consider-
able agreement.293
Meanwhile China showed an interest in Cuban resources: nickel, sugar,
and petroleum. China invested (or gave aid; it was not clear) to facilitate
the production of these items, especially nickel and petroleum. China at
this time signed a contract to purchase 37, 500 tons of nickel from Cuba.
Soon after China agreed to finance projects including a nickel and a cobalt
refinery.294
Chinese leaders had high expectations for Cuba becoming an even bigger
market for China’s products. China’s aid and investments resulted in mark-
edly increasing sales of Chinese products there. In 2006, China exported
1,300 buses to Cuba, then 2,700 more. In 2006, Cuba purchased 12 trains
from China. It was said that China sought to sell a number of high-end
products to Cuba with the goal of introducing them to other Latin American
countries.295 Cuba’s exports to China in 2007 amounted to $1.1 billion, an
increase of 110 percent from the previous year.296 This balanced to some
extent the fast increase in Chinese imports.
In 2008, during a trip to Cuba by President Hu Jintao, there was mention

of a “potential” $1.5 billion loan to finance 37 commercial projects.297 Few
details were provided, though it may be assumed that some funds were deliv-
ered and were used for nickel extraction and marketing Chinese products.
There was also an agreement reached whereby Chinese companies would
explore for oil in Cuba’s offshore exclusive economic zone.298
In September 2009, a Chinese legislative delegation flew to Havana and
it was reported that China pledged $600 million in aid and loans.299 China
apparently viewed Cuba as one of the few Communist nations left and felt
the two should maintain good relations. Chinese leaders were also happy
that the Cuban government took China’s position on Tibet and Taiwan.
China also viewed Cuba as a “vantage point” for dealing with the rest
of Latin America.300 Chinese leaders were thinking of the benefits of good
relations with Cuba in terms of ties (especially if they continued to dete-
riorate) with the United States. Another explanation for China’s foreign
assistance to Cuba was payment for intelligence listening posts China had
set up in Cuba.301 It was also reported Beijing sought to establish a China
“pivot” or sphere of influence to counter the Obama administration’s pivot
to Asia.302 At this time it was said that China was pushing Cuba to insti-
tute market reforms (as it has been doing, but too slowly for China). In
any event, China continued to find Cuba a good market for its products,
and in 2011 China became Cuba’s largest supplier of capital and consumer
goods.303
In 2012, a large Chinese-built oil rig was delivered to drill in deep water
(more than a mile deep) off Cuba’s coast. Named the Scarabeo 9, it was
semi-submersible and had living quarters for 200 employees. Ironically, it
was manufactured in China except for the blow-out mechanism, which was
made in the United States, and was the same type that had failed in the
BP well that spread oil in the Gulf of Mexico in 2010. Thus there were
fears voiced in Florida that an accident at this well would badly pollute
its beaches.304
In 2013, China pledged more financial help to Cuba. In July President
Xi visited Cuba and on that occasion China’s Exim Bank extended a loan
for $125 million for work on Santiago Port, Cuba’s second largest, while
China Minerals Mining Corporation negotiated spending $600 million to
buy Cuban nickel. Also an agreement was reached whereby China would
provide training to Cubans and help to build an agricultural park.305 In
2014 President Xi visited Cuba again and announced 29 agreements to sup-
port Cuba’s development and enhance country-to-country ties. Support of
some kind was probably given to facilitate the building of Cuba’s first spe-
cial economic zone. It was noted at the time that China was Cuba’s second
largest trading partner (after Venezuela where Cuba got its oil at a cut-rate
price, delivery of which was cut by nearly a quarter in 2013).306
In the meantime China extended large doses of financial help to a number
of other Latin American countries. This was clearly influenced by China’s
new and large foreign exchange position and focused not only on energy and
resource acquisition but also on agricultural products and finding markets
for its exports.307
In 2004, as part of its ten-year investment plan announced that year,
China pledged $19 billion to Argentina, including $8 billion for the expan-
sion of its railway system and $6 billion for construction projects.308 China
was ostensibly motivated by an interest in Argentine resources. China thus
financed mineral exploitation and the building of transportation facilities
related to this. It is noteworthy that Beijing stepped in when many other
investors shunned Argentina due to its 2001 default on a number of foreign
loans.309
In July 2010, it was reported that China had agreed to provide Argentina
with 85 percent of the financing, amounting to $10 billion, to refurbish
and upgrade Argentina’s railways. The transaction was to be handled by
the China Development Bank through the China International Trust and
Investment Corporation. A general upgrading, electrification, and new
locomotives and rail cars were included in the deal.310
In 2012 the China Development Bank extended two loans to Argentina
to develop wind energy; one was for $261 million, the other for $3 billion.
Regarding both loans Chinese companies were to provide the turbines
for use in the projects.311 In 2014 President Xi Jinping visited Argentina
and signed a three-year agreement whereby banks in China would provide
$11 billion in a currency swap arrangement. The deal would make it possible
for Argentina to increase its purchases of Chinese products.312
In 2005, China provided $5 billion to Brazil for infrastructure projects
including railroads and port facilities.313 That year China also promised
funding to Venezuela for energy infrastructure, agricultural development,
and telecommunications.314 While that funding could be labeled Chinese
investment, and probably should be given its source, it did not differ from
China’s foreign aid in most respects.
Beijing also renewed its interest in Chile. Financial help set the stage for
expanding commercial relations and reflected China’s search for resources.
In 2006 China reached an agreement with the Chilean National Copper
Company to provide up to $2 billion in investment capital with an initial
capital infusion of $550 million at a preferential rate.315
In 2007, China established a joint development fund with Venezuela
contributing $4 billion (with $2 billion coming from Venezuela). The fund
was to be used for infrastructure, energy, and social projects.316 The term
“social project,” however, suggests it was not purely a commercial deal. The
same year it was also reported that China had negotiated with Antofagasta
Minerals in Chile to finance the development of a new mine to the tune of
$1.5 billion.317
In 2007 China wrote off a debt of more than $15 million owed by
Guyana. That same year China provided Peru with emergency assistance
after an earthquake.318
After the worldwide recession hit in 2008, China found an opportunity
to use its financial strength to put more money into Latin America and for
that accrue political and other benefits. The global downturn severely hurt
many Latin American countries. It reportedly caused Latin America overall
to lose 60 percent of its gross domestic product at a time (in 2009) when
$250 billion in debt repayment was due.319 At this juncture families in the
region reportedly lost somewhere between 7 and 65 percent of their incomes
due to diminishing remittances from workers abroad.320 The United States
facing difficulties itself was not in a position to help very much. China had
the money to lend a hand and did. China found Latin America very recep-
tive to its offers in view of the economic travails in the region.
China became especially active in helping the so-called caudillo socialist
countries (Venezuela, Ecuador, and Bolivia). During 2008–09 the China
Development Bank loaned Venezuela $8 billion to be repaid in future oil
deliveries and was in the process of negotiating a further $4 billion deal. In
September 2009, China National Petroleum Corporation announced it was
investing in Venezuelan oil to the tune of $16 billion at a time when Western
companies were pulling out.321 Probably as part of this deal China helped
Venezuela build a telecommunications satellite and became a provider of
telecom equipment in addition to assisting in the building of factories to
develop oil rigs and a joint venture for producing cars.322 It is reported that
from 2007 to 2012 the China Development Bank loaned Venezuela a whop-
ping $42.5 billion (a quarter of its loans during that period).323
Chinese leaders referred to its “strategic alliance” with Venezuela and
projected getting 1 million barrels of oil a day from Venezuela by 2015
(recently proclaimed by OPEC as the country with the largest oil reserves in
the world). In return China not only provided funding, but also concluded
deals on mining, satellite construction, and building railways. One author
described the situation as making Venezuela part of the Russia-China anti-
US axis.324
In 2008 China helped Ecuador deal with financial problems including
its burdensome foreign debts with a $1 billion loan. Beijing also provided
90 percent of the financing for a Chinese company to build a $1.5 billion
hydroelectric plant.325 In November 2011 the China Railway Construction

Corporation and Tangling Nonferrous Metals Group invested $2.8 billion
in a copper project.326 At nearly this same time the China Development
Bank granted Ecuador a loan for $2 billion, bringing the total of Chinese
investments to $7 billion.327 In the case of Bolivia, China helped launch a
commercial satellite. China also purveyed (selling or giving?) arms, includ-
ing planes and weapons. Ecuador and Venezuela also received arms.328
But Brazil was said to be China’s favorite. When the global recession hit,
Brazil was severely affected. China offered a $10 billion loan. China then
launched a number of joint ventures with Brazil in such areas as aircraft
production, earth satellite research, and space. China, in addition, provided
Brazil with significant technology transfers. Last but not least China helped
with road building in Brazil.329 China’s aid and investments in these areas
was larger to Brazil than to any Latin American country.330 As a result of
China’s financial help Brazil’s exports to China grew by 62.7 percent while
they shrunk by 37.8 percent to the United States.331
In 2010 it was reported that China’s “investments” to Brazil totaled
$17 billion.332 In return Brazil supported China’s bid to be considered a
market economy and Beijing’s efforts to use its currency in global trade
transactions to replace the US dollar. The two countries upgraded their stra-
tegic partnership and signed a joint action plan. Brazil’s trade with China
soon surpassed its trade with the United States.333 In 2015, China’s premier
Li Keqiang visited Brazil and announced investment deals amounting to a
staggering $50 billion. The size of this deal was multifaceted and this made
it complicated. Of this package $7 billion was slated to fix Brazil’s state-
owned oil firm Petrobras that had lost other investors because of a graft
scandal. Much of the remaining funds would be directed to help Brazil
improve its infrastructure in advance of hosting the first ever Olympics
to be held in South America, in 2016. Other areas of investment included
energy and agriculture.334
One important aspect of China’s financial assistance to Brazil was that it
facilitated the formation of the BRIC (Brazil, Russia, India, China) group.
The term BRIC was coined by an official with Goldman Sachs in 2001
and was formalized at the suggestion of Russia in 2006. In 2010 (effec-
tive in 2011, the organization added South Africa as its fifth member and
became known as the BRICS). The BRICS group was projected to surpass
the Western countries in economic size in less than 40 years.335
China liked the organization since it excluded Western countries and
adopted a Third World view of international affairs. With 42 percent of
the world’s population, 30 percent of its territory, and projected to own
22 percent of the global GDP by 2015, China saw the BRICS group as
very important.336 In 2011, in just one year the GDP of the group grew
economically by $2.3 trillion—the total GDP of Italy.
While the Caribbean area (except for Cuba) was not early on a focus of
China’s aid and investments, this changed. In the last decade China has
allocated $6 billion to the area—$3 billion in 2013 alone.337 In fact, China
had going at least one project in every Caribbean country.
In 2007, China provided Jamaica with a $12 million concessional
loan (from the Exim Bank) for water development. In 2008–09 China
provided Jamaica an additional $139 million in the form of a loan in
the context of the world recession when Jamaica was facing an economic
collapse because of high government debt. As a result China became
Jamaica’s largest financial helper.338 In 2013, it was reported that China
had negotiated building a large port in Jamaica. This caused some to
think, in view of the fact China’s financial involvement in the area was
not resource driven, that Beijing was thinking of using its presence in the
region (as the Soviet Union did in the 1960s with its involvement in Cuba)
to gain strategic leverage over the United States and perhaps even use it
as influence to bargain with Washington over its presence in the South
China Sea.339
China also provided relief or emergency aid to countries in the region.
Most notable was its aid to Haiti. In 2010, after the earthquake there, China
provided Haiti with $7.1 million in materials and medical services and
$3.6 million in cash.340
In 2011 China started work on a $2.6 billion resort in the Bahamas.
Billed as the largest project of its kind in the Caribbean, the Baha Mar resort
was funded by various Chinese firms. It included four hotels, a golf course,
and the area’s largest casino. The Exim Bank agreed to fund the project and
the China State Construction Engineering Corporation was to help build it.
Tourism, which made up half of the economy of the Bahamas, was hurt by
the global financial crisis and it would now be revived. It was also predicted
the project would create 8,000 jobs with 4,000 generated during the con-
struction period. It was said it would add as much as 10 percent to the local
gross domestic product.341
In 2009 China joined the Inter-American Development Bank, pro-
vided $350 million in funding. It was said that China wanted to convey
an image of cooperating with other countries in helping development in
Latin America.342 In early 2013, China’s new president Xi Jinping attended
a BRICS meeting during his first trip abroad, at which time was discussed a
BRICS bank, a “sort of” global bank or an alternative to the World Bank.343
According to one writer China saw the BRICS group as able to create a
multipolar world, which China favored.344
In the past two to three years China has extended more large aid
and investments to Latin American countries. In 2013, China’s Sinopec
announced financing another oil project in Venezuela for $14 billion and
shortly after, in 2014, doubled that amount. That brought the total of
China’s investment in Venezuela to well over $50 billion—the largest to any
Latin American country.345 In 2013 China loaned Costa Rica $400 million
for road building.346 In 2014 in Peru China was working on a $20 billion
loan that was to put the country back in second place among the world’s
copper producers.347 This and more have produced results.
In 2013, China became the leader in exports to Latin America, surpass-
ing the United States. In 2015 Chinese officials met with Latin American
leaders and pledged to increase trade to $500 billion and investments to
$250 billion.348 Meanwhile a Chinese businessman was contemplating
building a new canal in Nicaragua as a substitute for the Panama Canal
while China was working on a transcontinental railroad while offering more
financial aid to help Latin America at a time when the declining commodity
prices were hurting their economies.349
Aid to Countries in Oceania

China has given a significant amount of foreign aid, especially as a ratio
to the population of the recipients, to 14 nations in Oceania.350 Initially
Beijing’s main motive was to win diplomatic relations with these coun-
ties and in so doing isolate Taiwan. (This issue is discussed in detail in
Volume 2, Chapter 4). It is hardly an exaggeration to say Beijing engaged
in a diplomatic war with Taipei in the region for a number of years using
foreign assistance as its main weapon. Another factor was that Chinese lead-
ers viewed the region as comprising small, poor nations where its aid would
be visible and effective. Increasing commerce, especially China’s exports,
and access to certain resources were also motivating factors. Last but not
the least, on most of the Pacific islands there are Chinese communities that
were a concern to China and that China wished to establish contacts with
and help.351 It is also worth noting that China was given an opportunity to
expand its influence in Oceania due to the United States and the United
Kingdom paying less attention to the region.352
Later China came to view the nations in the region as having strategic
importance, especially as it related to China’s growing navy and Beijing’s
need for military and other communications facilities in the Pacific. Chinese
strategists referred to some of the countries in Oceania as the “second island
chain” (the first being Japan, Taiwan, and the Philippines and on south).
Expanding its influence to or beyond the second chain would make China
truly a global power. This, however, appeared to be a long-term objective

and may, at least to some observers, explain why China did not pursue its
foreign aid diplomacy in this realm as aggressively as it might.353 (One nota-
ble exception, as we will see later in the chapter, was Kiribati.)
Finally, China’s interest in the nations of Oceania can be attributed to
their support for certain elements of China’s foreign policy and their votes
on a number of critical issues in the United Nations, including some that
related to East Asia. One of these has been Japan’s bid to gain a seat on the
US Security Council, which China has opposed. For this reason there has
been visible aid competition between China and Japan in the area.354
Unlike China’s usual method of dealing diplomatically with other coun-
tries and providing foreign aid on a bilateral basis, China has given con-
siderable attention to several regional organizations and has given aid and
investment funds through them to individual countries. The small size of
the countries in the region to some extent explains this. Another is Taiwan’s
links with these organizations and China’s desire to dislodge Taipei from
these ties.
The evolution of China’s ties with the countries of Oceania is instruc-
tive. In the early years China showed little interest in Oceania. In the 1990s,
China began, in some part to see it as an area where it might make diplomatic
headway using its foreign aid diplomacy.355 In 2003, China announced that
it planned to expand its relations with the Pacific Islands Forum and in so
doing provided that organization with an aid package. No details on this
aid, however, were forthcoming. There appeared to be only one condition:
China’s representative stated at the time that the organization should refrain
from any official ties with Taiwan.356
In 2004, China joined the South Pacific Islands Tourism Organization
and extended “approved destination status” to Fiji, the Northern Marianas,
Tonga, the Cook Islands, and Vanuatu—which meant that these coun-
tries would benefit from the growing volume of Chinese tourists (and their
money).357
In April 2006, Premier Wen Jiabao attended the first meeting of the
China-Pacific Island Countries Economic Development and Cooperation
Forum in Fiji. At that meeting Wen promised to make available $376 million
in preferential loans over the next three years, establish a fund to encourage
Chinese companies to invest, cancel, or extend debts maturing in 2005 and
remove tariffs on imports from the least developed island nations that have
diplomatic ties with China. Premier Wen said the preferential loans were to
boost cooperation in the areas of resource development, agriculture, forestry,
fishery, tourism, textiles and consumer products, telecommunications, avia-
tion, and ocean shipping. Wen went on to declare that China would provide
free antimalarial drugs, medical teams, medical training, training to 2,000

government officials, and assistance in building early warning systems for
earthquakes and tsunamis.358 On this occasion the premier also cited Papua
New Guinea, Samoa, and the Federated States of Micronesia as being “des-
tinations” for Chinese tourists.
In late 2013, at the second China-Pacific Islands Countries Economic
and Development Cooperation Forum, China made another major pledge to
Oceania countries. China’s vice premier Wang Yang pledged up to $1 billion
in concessional loans and another $1 billion in nonconcessional loans to be
made available by the China Development Bank. Other promises included
zero tariff treatment on 95 percent of the least developed countries’ exports,
2,000 scholarships, assistance in conducting tourism promotion in China,
medical aid, help in promoting agricultural trade, and gifts of low-carbon
products.359
China’s aid and investment “offensive” that began under President
Hu Jintao was continued by President Xi Jinping, who visited the area in
November 2014 and pledged to maintain China’s focus on the region.360 Its
focus was mainly on developing natural resources, leading one writer to talk
about to China’s “resource diplomacy”; China was also interested in devel-
oping markets and maintaining good political ties.361
China’s largest financial commitment to any specific country in Oceania
has been to Papua New Guinea. (Papua New Guinea is categorized as a
country in Oceania even though it is located in Southeast Asia.) In 1975,
Papua New Guinea gained its independence and established formal diplo-
matic relations with China the next year. In 1999, the government of Papua
New Guinea established diplomatic relations with Taiwan but soon reverted
to ties with China. This happened because of a change of political leadership.
In 2003, Papua New Guinea reaffirmed its one-China policy and thanked
China for its aid commitment.362 This coincided with China announcing it
would upgrade its relations with the Pacific Islands Forum and provide aid
to that organization.
That year, when the Ram nickel property came up for sale by its Australian
owner, China’s Metallurgical Group Corporation bought Ram NiCo for
$1.4 billion. This transaction was said to be a business investment; yet it also
had a foreign aid “component.”363 As part of the deal China Metallurgical
gave 2.5 percent ownership to four landowning groups around the mine and
pledged “millions of dollars” in aid to build health clinics, schools, churches,
basketball facilities, rice-growing projects, roads, a cocoa factory, and job
training facilities.364
China Metallurgical later said it developed the mine in three years;
the Australian company that sold China the mine had been working on it
for 40 years and had not completed it. In the process of making the mine
productive it created employment for 4,000 workers and added at least
10 percent to the nation’s economy. The project led to building the nation’s
largest bridge, its biggest wharf, a number of roads, and a pipeline. On the
less positive side, China was accused of exploiting local labor, disregarding
local customs, and causing serious environmental damage.365
Subsequently Taiwan attempted to win back diplomatic relations with
Papua New Guinea using special funds, but the effort failed and details were
published in the media. (See Volume 2, Chapter 4.) China’s relations with
Papua New Guinea remained cordial and later it was announced that Papua
New Guinea military personnel would receive training in China.366
After 2006 China’s investment funds received by Papua New Guinea
increased markedly, to over $300 million annually after 2009. Most went
into mining. But less noticed China made substantial loans to buy Chinese
products.367 In 2013, it was reported that China had extended loans for
infrastructure building totaling $ 1.9 billion and was interested in investing
in energy.368 In 2015 China acquired more mining companies in Papua New
Guinea prompting the director of the Chamber of Mines to state that China
was the “only one to push through acquisitions.”369
Fiji was China’s second most important recipient of foreign assistance in
the region. Fiji established diplomatic relations with Beijing in 1975 shortly
after its independence. It was reported that China provided aid to Fiji in
the 1980s, constituting 17.5 percent of its total aid received.370 China also
extended to Fiji a preferential arrangement for buying its sugar.371 Few other
details were provided.
In 1995, the Chinese military established ties with its counterparts in Fiji
and provided arms aid of a nonlethal kind.372 During subsequent visits by
top Fijian leaders to China more aid was promised: $12.1 million in 2001
(for the construction of a sports stadium to be ready for the South Pacific
Games in 2003), and in 2002 $3.4 million in the form of an unrestricted
grant, a research and training fishing boat, plus $3.4 million in unspecified
financial assistance.373
When Premier Wen Jiabao visited the region and made the large general
or area aid pledge cited above, it was reported later that Fiji was to receive
40 percent of this aid, though in the next few months Chinese officials said
that the Fijian government did not always follow through on its aid arrange-
ments, suggesting that much of the aid was not used. Trade figures also
indicated that.374
In 2006, when the government of Fiji was overthrown by a military coup
and Western governments adopted policies to isolate the new regime, China
did not; instead Beijing announced that Fiji’s independence and sovereignty
should be respected. China subsequently increased its foreign aid to Fiji,

reportedly by a very large amount.375 Two years later, when China experi-
ence trouble in Tibet, Fiji supported Beijing’s actions in dealing with rioting
in the Tibetan capital of Lhasa.
China continued to support the Fiji government verbally and with aid
pledges. President Xi Jinping visited Fiji in 2013 to underscore China’s
friendship. Beijing wanted to demonstrate its backing for small countries
and Fiji at a time experienced economic difficulties. China apparently also
saw Fiji as important in the future for strategic reasons.376 One of China’s
major funding projects is a $158 million hydroelectric project the World
Bank shelved. This and other projects accounted for 37 percent of Fiji’s for-
eign investment in 2014 (compared to just 2.9 percent in 2009).377
Samoa established diplomatic relations with China in 1975 immediately
after independence and just two days after Fiji made the move. A number
of agreements were signed with China dealing with cultural and financial
matters, including foreign aid. Over the next decade China provided Samoa
with medical assistance, scholarships, and aid through the Pacific Islands
Forum.378 Few details were published on this aid, however.
In 1989, Samoan prime minister Tofilau Eri visited China, one of the first
foreign leaders to do so after Tiananmen. During the visit, he was promised
a $12 million grant to build a government building.379 Later China provided
aid funds for other buildings, a new sports complex for the 2007 South
Pacific games, and roads.380 In 2006, China cancelled Samoa’s debts to the
tune of $11.5 million.381
China’s foreign aid to Samoa won Samoa’s friendship and support on a
number foreign policy issues, its (positive) voice in Pacific Island’s affairs,
and its loyalty on the China-Taiwan recognition matter. The Samoan gov-
ernment said China’s financial assistance to build Samoa’s infrastructure
helped make the South Pacific Games held there in 2007 a success.382 In
2008, officials in Samoa publicly stated, in the context of unrest in Tibet,
that foreign leaders should not interfere in China’s internal affairs.383 Aid
also resulted in increased trade. China got all of this notwithstanding the
fact that China’s aid was much less than aid given by Australia and some
other countries.384
China continued to make investments in Samoa, though one, made by
the Beijing Investment Zhao YiLi Management Company to build hotels
and casinos using 30,000 Chinese workers, was rejected.385 Other aid,
however, continued, resulting in an 89 percent increase in trade in 2012.
The influence of China’s foreign assistance, totaling $250 million up to
2013, was most apparent in health, education, sports, agriculture, and
infrastructure.386 In early 2015, in the context of reports that China would
finance the upgrading of Samoa’s main airport, the prime minister praised
China’s financial aid.”387
In 1988 China extended foreign aid to Tonga when it broke relations with
Taiwan and the two countries established diplomatic relations. Interestingly
one of the reasons cited for its abandoning Taiwan was its democratization
of the kind of Tonga did not like.388 China provided foreign aid in the form
of soft loans to refurbish the Dateline Hotel, build a new convention hall,
and upgrade the international airport.389 Tonga switched diplomatic rela-
tions from Taiwan to China in 1998.
In 2000, there were anti-Chinese riots in Tonga and 600 Chinese store-
keepers did not get their work permits renewed. Notwithstanding, China
provided Tonga with aid in the form of military supplies.390 In 2004, at the
time Tonga established an embassy in Beijing, China provided “technical
assistance” through the Bank of China to the Shoreline Electric Company
amounting to $17 million.391 On the surface this seems to have been an invest-
ment loan, but since no details were provided and since the crown prince sat
on the board of Shoreline it may better have been called foreign aid.
In 2006 China offered aid in the form of budget relief to Tonga worth
$6 million.392 In 2007, China pledged a soft loan amounting to $49 million
to help in the rebuilding of the central business district in the capital city
of Nuku’alofa after the aforementioned anti-Chinese riots destroyed much
of it.393 Some of the funds were used to help Chinese merchants return and
reestablish their businesses after the riots.394
China’s aid resulted in Tonga taking China’s side on a number of foreign
policy matters. It was especially effective in the context of Western countries
cutting their diplomatic ties with Tonga and in some cases refusing to grant
aid in the absence of reforms. It has also resulted in increased trade.395
In 2013 it was reported that 30 percent of Tonga’s foreign loans were
from China and were used mostly for humanitarian and infrastructure
work.396 But a good share of the money was used to support the business
community in some way; this caused some alarm locally as half of busi-
nesses in Tonga were Chinese owned. Tonga’s prime minister defended
China’s investments and influence saying that China was a “new factor”
and that it was willing to provide investments and that Tongans could
learn from China’s business acumen.397 China has since provided financial
assistance to Tonga in the form of scholarships, aircrafts, and infrastruc-
ture building.398
China’s most interesting case, and some would say its biggest failure in
providing foreign aid to a country in Oceania, was Kiribati. China estab-
lished diplomatic relations with Kiribati soon after it gained its indepen-
dence from the United Kingdom in 1980. Following this China extended
some infrastructure aid and later provided $5.5 million for a sports complex.
In return for its foreign aid, in 1997 Kiribati allowed China to build a space
tracking station called the China Space TT and C Station on South Tarawa
Island. China’s space program used fixed ground tracking that included
telemetry land command stations in China, plus one in Namibia, and one
in Kiribati. At the time Japan was developing a space shuttle landing base in
nearby Kiritimati, and Sea Launch, a California Company, was launching
commercial satellites using a deep-sea oil platform.399
It was reported that China’s facility could be employed to track and
even interfere with US missile tests conducted from the Kwajalein missile
test range in the neighboring Marshall Islands (on Kwajalein Atoll) 1,000
kilometers away and possibly even use its “base” to fire missiles at US Navy
ships.400 This was important for another reason: Kwajalein was linked to
America’s anti-missile defense system, which if extended to Taiwan would
have serious implications for China. In any event, China had reputedly
said that even if the most minimal version of its system were built it would
increase its nuclear threat capabilities tenfold.401 Further indicating the
value of China’s relationship with Kiribati the facility was used when China
sent its first astronaut, Yang Liwei, into space in October 2003.402
In any event, in early 2003 the local press reported that China’s ambassa-
dor to Kiribati had donated $2,848 to an organization supporting President
Teburono Tito. Subsequently this became an election issue that the opposi-
tion party used against the president. Just before the election President Tito
extended a base agreement to China making his relationship with China an
even more sensitive issue. President Tito won the election, but was forced to
leave office a few months later following a vote of no confidence. The new
government subsequently promised to get to the bottom of the matter of the
former president’s financial ties with China. In the midst of an investigation
the new government of Kiribati broke off diplomatic relations with China
and established ties with Taiwan.403
China considered its relations with Kiribati so important that it did
not close down its facilities there for six months and even helped organize
protests against the government’s decision to establish diplomatic ties with
Taiwan.404 But this did not work and China’s aid to Kiribati was seen as
a failure. However, it is uncertain how much foreign aid China had given
to Kiribati; it was apparently not a large amount notwithstanding China’s
investments in what was commonly called strategic operations there.405
China established diplomatic relations with Vanuatu in 1962. In 2006,
the two countries signed an economic cooperation agreement citing China’s
intent to help in Vanuatu’s economic development and its lifting tariffs
on its exports to China. Vanuatu was also put on a preferential list for
Chinese tourists. In 2009, Vanuatu specifically asked for China’s financial

help, which it apparently received though nothing specific was published
about this. However, in 2010, the Chinese ambassador announced that
China would fund a number of projects in Vanuatu, including building the
National Convention Centre and expanding the prime minster’s office, and
helping the University of the South Pacific.406
Conclusions
During period one of its giving foreign assistance China extended a very
large amount of aid to one European country—Albania. During this period
China also pledged and delivered what may be called significant aid to two
other countries—Egypt and Cuba. China provided lesser amounts of aid
to several other European, Middle East, and Latin American countries.
During period two, China provided large amounts of financial assistance
to more countries in Europe and the Middle East (mainly labeled invest-
ments but not comporting with what that term usually means since they
were made by state-owned corporations and/or backed by the government
and were often risky). China gave significant financial help to countries in
Latin America (mostly investments) and Oceania (large only to Papua New
Guinea).407
In terms of dollar amounts China’s foreign assistance to countries in
the “other” category totaled in the low billions during period one. During
period two China it was much, much larger: China purveyed aid, invest-
ments, discounts on arms sales, tariff privileges, and debt cancellations to
nations that amounted to more than double digit billions of dollars.
To Europe, China’s foreign assistance totals $30 to $40 billion, consider-
ably more if its aid to Albania, including arms aid, is calculated in current
dollars and if currency swaps to Ukraine and Belarus are counted and if
assistance (mostly called investments) not yet delivered (because it is too
soon for them have to have drawn) are added.
During period one China provided foreign assistance in the range of one
half billion dollars to Middle Eastern countries. During period two Egypt
was a major recipient of China’s financial help. It received over $3 billion,
including arms aid, debt relief, debt rescheduling, funds for a trade zone,
and what was called investments. Some of the weapons were “sold,” but
whether China was actually paid is uncertain. Some of China’s investment
funds were lost because of local corruption and the events associated with
the Arab Spring. To Iran, China provided more than $8 billion in financial
help, likely much more, consisting in arms sales but probably 3 billion in
investments for oil and an amount difficult to estimate in assistance for it
becoming a nuclear power. Most of this would best be considered sales or

investments; it should, however, be noted that Iran likely could not have
obtained this assistance elsewhere. China also provided Iraq with some-
thing in the neighborhood of $2 to $4 billion in arms sales, and more than
$1 billion in arms for oil money. Later China cancelled $8 billion in debt,
suggesting this was the total or near to the total of its assistance to Iraq and
that it became aid at that point. China also provided Libya with $20 billion
in financial help and Algeria around the same amount mostly in the form
of investments.
Much of China’s foreign aid and many of its investments in the Middle
East were “oil for aid.” China sold large quantities of arms, particularly to
Middle East countries, that may be said to have an “aid component” since
many were sold at discounted prices; most were sold to buyers that could
not acquire them elsewhere at least easily. This makes it difficult to ascer-
tain the true nature and value of Chinese foreign assistance to Middle East
countries. Large amounts of China’s investments made in Iraq turned sour
and were written off. So too was the case with Egypt and Libya, notably, as
a result of the Arab Spring. In any event China did not distinguish between
aid and investments when it cancelled repayment of these debts, suggesting
that in the minds of Chinese decision makers there was really no difference.
The need to forgive debts could have been predicted and is likely to happen
in the future on an even larger scale. Chinese leaders did not seem very con-
cerned about this and may have even expected it.
China provided Latin American countries probably only around
$250 million in financial help during period one, but to the tune of $60
to $100 billion during period two—much more if recent agreements are
counted and if a currency swap agreement with Argentina can be said to
constitute aid. Most of the later assistance was called investments. It was
mainly financial help to find and extract energy and natural resources and
expand food production. Oil was China’s main motive for its financial help
to Venezuela though it was said Beijing wanted to help a government that
was at odds with the United States.
China’s investments in Latin America, if funds “in the pipeline” and funds
through the BRICS organization to Brazil are considered, have increased
15-fold in the past ten years, possibly to exceed those given to Africa, and
second only to aid given to Asia.408 Trade increased proportionally: from
8 billion in 1999 to one 180 billion in 2010—a 22-fold increase.409 Sino-
Latin American commerce grew to $240 billion in 2013 while US trade with
the region declined (a 19 percent fall in imports and a drop of 16 percent in
exports).410 China’s economic influence in the area has grown exponentially
to a considerable extent to the detriment of US influence.
China’s financial help to countries in Oceania was virtually nonexistent

during period one. It has totaled to something over $3 to $4 billion dur-
ing period two though investments in Papua New Guinea (which seem
purely commercial ventures) would raise the figure several fold. This was
a much smaller figure than the other regions discussed in this chapter.
But given the population of the region in per capita terms it was larger.
Considerable assistance was provided to other countries in the form of
regional grants, which was an exception to China’s usual way of extending
foreign assistance.
China’s motives for giving foreign assistance to countries in the regions
discussed in this chapter vary considerably. But they are not all that different
from its motives elsewhere, except that in the regions discussed here some
of China’s goals in giving foreign assistance do not apply and one or two
generally predominate. Its reasons for giving financial help to countries in
this category, as elsewhere, are very different when comparing period one
and period two of its aid giving.
Regarding China’s foreign assistance to European countries, Beijing was
motivated initially by its desire to promote Communist Bloc unity and fight
American and Western imperialism. Subsequently China was prompted to
give foreign aid by its enmity toward the Soviet Union, this being almost
singularly true of its vast aid to Albania. (See Volume 1, Chapter 4). China
may also have been looking for client states or allies; it found one in Albania
and had hopes for some prospects elsewhere.411 Interestingly aid to European
countries may be seen as an effort by China to gain face by helping countries
in a region that abused and exploited China in the past (although they were
not the same countries). Or one might say China got revenge, though in an
odd way, for Europe’s imperialist treatment of China in the mid-1800s more
often, or at least it got some kind of satisfaction from giving foreign aid to
European countries.412
During phase two of China’s aid giving, Beijing was obviously motivated
by its hopes to gain influence in Eastern Europe separate from, or com-
peting with, Russia, Western Europe, and the United States, acquire natu-
ral resources, and develop a market for its products (to, as usual, alleviate
unemployment in China), and, finally, link Europe to Asia through building
transnational transportation facilities and in so doing expand China’s global
influence.413 Whether or not or at what point Beijing sought to create an
“emerging axis” of countries independent of the United States and ones that
China might align with is uncertain; some have suggested this was a central
element of China’s global policies.414 China giving assistance to European
countries, especially newly independent Eastern European nations and those
proximate to Central Asia, suggests this.
China’s aid giving to Middle Eastern countries was initially founded on

Mao’s perception that the area shared China’s experience (and hatred) with
imperialism and colonialism. However, ties with countries in the region
based on these ideas proved fleeting and except for its help to a few rev-
olutionary causes that gave China face temporarily, China never exerted
much lasting political influence. Mao also contended that the United States
needed to control the Third World or the “intermediate zone” stretching
from Turkey to India and Japan, an area which Mao called the “military
crescent.”415 China, he thought, could undermine US policy.
Beijing early on won diplomatic recognition from several countries (even-
tually all) in the region. After the Bandung Conference in 1955 China estab-
lished diplomatic ties with Egypt, Syria, and Yemen, all of which broke off
ties with Taiwan.416 Beijing later obtained support for its bid to join the
United Nations and have Taiwan expelled. Arabs rejoiced at these slaps to
the face of the Western powers. China meanwhile won support for a number
of tenets of its foreign policy, such as approval for its nuclear test in 1964
and more.
By the 1960s, China’s view of the Middle East changed from one of
opposition to American imperialism to concern over the Soviet Union’s
efforts to control the region; China even called the area a “shield against the
southward expansion of Soviet hegemony.”417 Beijing caused serious difficul-
ties for the Kremlin but could not translate its aid very well into gains in its
national interests.
During period one China’s aid to Middle Eastern countries was a fairly
small percent of its total aid, perhaps peaking at 6 percent. It was also spo-
radic. It was high in 1964 when China sought to obtain votes for its views at
the Afro-Asian Conference scheduled for 1965 and in 1976 after the Arab-
Israeli War. It declined markedly in the late 1970s and after.418 China’s for-
eign aid never surpassed other donors except to the two Yemens for a brief
period.419 After 1977 little if any new Chinese aid was offered. China’s aid
situation reversed so dramatically (China getting aid) that, during the next
decade, China itself became the major recipient of foreign and international
lending agency loans, including funds from oil-rich Kuwait.420
Beijing’s foreign policy subsequently shifted from a Maoist normative
(ideological) view to a pragmatic, interest-driven (especially commercial or
profit) policy under Deng Xiaoping. Financial help, mostly in the form of
investments, increased geometrically in volume and in influence. That situ-
ation has remained.
China’s aid to Middle Eastern countries, especially arms aid, very much
helped lay the groundwork for Chinese military sales elsewhere, and it made
considerable profits for China later. Eighty percent of China’s arms sales
in the decade of the 1980s were to Middle East countries and reportedly
totaled more than $15 billion.421 China sold vast quantities of arms to Iran
and Iraq during their war. China also sold arms to Egypt, Syria, Libya, and
Saudi Arabia.422
Some of the specifics are instructive. Between 1984 and 1987 China
signed arms deals with Iran worth some $2.5 billion, and with Iraq for
$1.5 billion. Before the summer of 1988 Chinese officials offered the sale of
a new 375-mile-range M-9 missile, capable of delivering chemical warheads,
to Syria. Libya was reportedly negotiating for the same missile. China also
sold ballistic missiles to Saudi Arabia.423 China offered assistance in the area
of nuclear research and/or weapons to more countries in the Middle East
(Algeria, Egypt, Iran, Iraq, and Syria) than in any other region.424 However,
in no case did this go very far, except to Iran.
As mentioned China did not take much interest in Latin America in the
1950s and 60s. Mao saw some potential for supporting wars of national
liberation and freeing the area from the forces of imperialism; but there
were few good opportunities that China could exploit. Seeing the world in
ideological (and geopolitical) terms Latin America was considered an area
of the world far from China and under American influence. In the 1960s
Cuba became an exception. So was Chile. But China soon lost its Cuban
connection—the victim of Sino-Soviet differences. Chile turned out to be
a bad gamble also. China’s aid to the countries in the area was small, Cuba
being an exception.
It was different during period two of its aid giving. China provided exten-
sive financial help to a number of Latin American countries usually labeled
investments. Its assistance was very large and came at a time when US and
European aid and investments were declining. China’s efforts were generally
well received. More important, China’s sizeable financial help to countries
in the region suddenly made it a big player there.
In Latin America, through its foreign assistance China locked up impor-
tant sources of oil, various natural resources, as well as agricultural products,
and found a large market for Chinese products. China’s financial help to
the region facilitated the building of numerous ports and other infrastruc-
ture on the Pacific Coast to facilitate commerce with China.425 In 2005
and 2009 China signed free trade agreements with Chile and Peru. China
helped Venezuela’s Hugo Chavez become economically independent of, and
a thorn in the side, of the United States. China set up trade arrangements
with its biggest “ally” in the region, Brazil, to use the Chinese and Brazilian
currencies to reduce the need for using the US dollar in trade. This may turn
out to have long-range consequences in terms of China becoming a global
financial player.426
China’s interest in Oceania became apparent in the 1990s and expanded

after that. It grew out of China’s diplomatic war with Taiwan, its ambi-
tion to expand its naval power, and its search for resources and markets.427
Each played a different role in Beijing’s calculations and thus its for-
eign aid giving. Strained Sino-Soviet relations, specifically concern over
Moscow’s maritime expansion into the region that posed an existential
threat to China, also motivated Chinese policy makers.428 This, of course,
was short-lived.
Later China came to see Oceania as an area where it might and should
compete with the United States. Its immediate or short-term goal seemed to
be to acquire a place to advance its military communications and perhaps
even obtain basing rights that it might use to obstruct US naval activities or
even challenge America’s presence in the Pacific.429 Its long-term goal, some
said, was to supplant the United States as the preeminent power in the Pacific
Ocean.430 The scope and makeup of its foreign assistance in the region sug-
gested this, though this may have represented a fairly distant objective.
Finally, China found the area rich in fishing resources and developed an
interest in its lumber, coal, natural gas, and nickel.431 China’s leaders noted
that many of the resources in the region were undeveloped. China could and
would change that. China also viewed the region as one where there was an
opportunity to sell Chinese goods. Recently there have been 3,000 Chinese
state and private companies operating in Oceania.432
The countries in Oceania welcomed and even preferred China’s foreign
aid because China did not apply the principles of accountability, gover-
nance, transparency, and human rights as a condition for aid giving. China
was praised for its noninterference in contrast to what is seen as the bully-
ing tactics used by Australia and New Zealand and other Western coun-
tries. The leaders of the countries in the region also appreciated the lavish
state visits and the “face” given them by China.433 This situation continues
to obtain.
Both China’s successes and failures have been more pronounced in the
category of “other” regions. Beijing was successful in winning diplomatic rec-
ognition and gaining support for some of its foreign policy views and goals.
It was not generally successful in inciting national liberation, Communism,
or China’s model of economic development (until recently). China suffered
very visible setbacks in its aid diplomacy in Albania, Cuba (for some time),
Egypt (for a while), and Chile. One might say that these cases served to
demonstrate that Mao’s ideological based foreign policy was headed in the
wrong direction and led to Deng Xiaoping abandoning it when he came to
power. During period two China more than made up for its failures during
period one.
Wrapping up, judging from the magnitude of China’s aid to countries

in the “other” category, overall it is apparent that China’s foreign aid and
investment diplomacy is ambitious and truly global, suggesting that its for-
eign policy and strategic goals are too. Its financial help to this category
of nations reflects China’s commitment to becoming a more important
international actor and implies that its future strategy is to attain greater
influence, perhaps a dominant role, in the world. A number of the so-called
anti-US “axis” countries are major recipients of China’s financial help, Iran
and Venezuela being the most obvious and the most important, but also
Cuba, and Ukraine and Belarus if the axis is seen to consist of a China and
Russia alignment.434
CHAPTER 4
Summary and Conclusions
The Magnitude of China’s Aid and Investments

As noted in Volume 1, Chapter 1, in the various studies published on China’s
financial assistance to developing countries there were, and are, large dis-
crepancies in the value of China’s help reported. There were also significant
disagreements about where China’s foreign assistance went in terms of both
countries and regions.
Widely varying definitions of the terms foreign aid and foreign invest-
ments and what should be included under the rubrics for each were the
primary causes. China, as noted in Volume 1, Chapter 1, did not adhere to
the Western definitions and guidelines of extending foreign aid or foreign
investments. Making matters worse, during the early years the Chinese gov-
ernment was not helpful in providing information about its aid. That was
its policy.
Later this changed and Beijing issued a number of policy statements and
reports on the subject and even published data on the amounts of China’s
foreign aid during various periods and to certain regions and countries. But
that was only marginally helpful. There was still no process put in place for
declassifying documents in China; thus past transactions remained classi-
fied or at minimum unexplained.1 Further, most Chinese officials remained
cautious when talking about financial assistance since it was yet not clear
what the boundaries were for discussing it. Aid and investments technically
remained state secrets (though top Chinese leaders often talked about both
openly and the media reported on them). Chinese scholars might have filled
the gap; but they provided little help. Meanwhile China persisted in using
its own definitions of aid and investments and often substituted one for
the other willy-nilly, while a number of other countries providing financial

assistance to developing countries did the same.
In his earlier studies the author employed a very broad and inclusive defi-
nition of foreign aid (noting that there were better terms, such as foreign
assistance, but generally used aid since China used that term). He professed
using information from all available sources and estimating, even guess-
ing, China’s foreign assistance in many cases. This he justified by the fact
China’s financial help to other countries was viewed first and foremost an
instrument of its foreign policy and the main objective of his studies was to
ascertain how financial assistance helped realize foreign policy goals.
In this study the author again defined foreign aid (while adding foreign
investments) to include all kinds of financial help, both direct and indirect.
He noted that China’s financial assistance is very different from Western aid
and investments and does not comport with the standard Western defini-
tions of the term.
As a consequence the author’s calculations of China’s financial help to
developing countries are much larger than figures published by most other
writers and organizations that take an interest in the subject, though there
are some exceptions. For example, comprehensive numbers, which include
foreign investments, are published in a recent study done by the Rand
Corporation, which are somewhat similar to this author’s figures.2
How large in scope (or value) then has been, and is, China’s “financial
help” to developing countries? Before addressing this question, it is necessary
to point out that the numbers have not been adjusted for inflation and put
in constant dollars. The reason is that this has not been done in most eco-
nomic studies or analyses of foreign aid or investments and doing so would
distort comparing China’s financial help with that of other countries, the
size of its aid relative to its economy (and therefore its sacrifice in giving aid),
and for a number of other reasons. Also a considerable amount of China’s
financial help is not counted: arms aid, paying above market value for some
imports, extending lower tariffs or tariff-free privileges, budget support,
currency swaps, assigning certain countries a top destination for Chinese
tourists, and much more. Finally, the results of China’s aid and investments
in terms of realizing its foreign policy goals and what it attained in terms of
energy and resources, markets, and global image, say much more. In fact,
one might argue that the dollar figures say very little.
Notwithstanding these caveats and the quite inexact and/or vague
calculations, the numbers do say something (though certainly less than
most counters think or wish were the case). So, distilling the figures from
Volume 2, Chapter 1, through Volume 3, Chapter 3, China provided finan-
cial help to developing countries up to late 2015, totaling from around
Summary and Conclusions ● 145
$600 billion to an amount considerably more than that. Asian countries

(including Southeast Asia, South Asia, Northeast Asia, and Central Asia)
received the most: in the range of $235 to $325 billion or more and in excess
of half of the total of China’s aid and investments. Africa as a region received
the second largest amount: from $120 billion to $140 billion; though, as
noted earlier in this chapter Latin America may have recently become a big-
ger recipient (depending on the way aid and investments are counted and
on whether currency swaps count). The “other” category was third at $110
to $200 billion; in this category Latin American countries received the
most.3 In terms of nations, North Korea is the largest recipient of China’s
financial help, followed by Pakistan and Vietnam.4 Kazakhstan, Venezuela,
Brazil, and Argentina are very large recipients if investment loans that may
or may not be (or expected to be) repaid, resources-for-aid, currency swaps,
and some other forms of financial aid are counted. Tanzania and Zambia
are also major recipients as are some Middle East countries if projects for
oil are included (which arguably they should not be).
The author wishes to reiterate that these numbers are only guesses (one
might say in some cases wild guesses) and in important ways misstate China’s
generosity and what impact its aid and investments were expected to have
and did have. Since the objective of this study is assessing China’s foreign
relations, and financial help was, and is, a tool of fulfilling foreign policy
goals, one might say that the figures do not really matter very much and
they do not go far in “telling the story” anyway. In fact, one might ask: Then
why cite them? The reason is that others do and readers expect them.
In this connection the reader is also advised that the author’s numbers
are based mainly on figures China and/or recipients have announced, sub-
tracting aid not delivered or was probably not, but adding in many cases aid
and investments presumably given, and aid that China said it provided, but
for which documentation is lacking or is contingent on something else or is
incomplete.5 In addition, some recent investment pledges made but not yet
delivered are cited and are generally counted since the writer believes there is
little likelihood China will fail to deliver (since it has too much money and
needs to find places to put it and seeks to expand its global presence using
economic influence rather than via military power).
Notwithstanding the considerable room for error, what do the numbers
say? First off, in most cases they confirm China’s stated foreign policy inter-
ests and Beijing’s strong commitments to help developing countries. China
believes it has a duty to help Third World countries and perceives that they
will appreciate it and will like and support China. This was part of China’s
history, as explained in Volume 1, Chapter 2, and that thinking accounts
for a considerable degree China’s current view of international relations.
The data are also revealing when looking at China’s financial assistance in
a comparative framework, the context (meaning the local situation and/or
the date and/or dates when promises and/or deliveries were made), and the
milieu at the time (both China’s economic and political situations and hap-
penings in the world). Trends are also instructive. Likewise the numbers are
telling when considering China’s desire for a better global image, its drive
to become a global power (perhaps the paramount world power), and the
challenge China’s financial help to developing countries and some regional
organizations presents to the United States and the West. More will be said
about these matters in later sections of this chapter.
In assessing the size and scope of China’s foreign assistance there are also
quite a number of other matters that need to be discussed and considered
by the reader when seeking a bottom line regarding China’s aid and invest-
ments, especially when trying to gauge or explain the impact of China’s
assistance. Most of them indicate that China’s aid and investment today
loom larger than one would assume looking simply at the figures.
One important fact is that a sizeable amount of financial assistance China
has given it did not reveal. As cited in previous chapters China purveyed
large quantities of foreign aid that it never announced.6 Most of China’s
aid in the early years was not announced. The main reason was that it was
military aid. The author counted arms aid. He also cited China’s foreign
assistance when there was only indirect evidence of it being given, such as
when only the recipient mentioned it or when trade figures or improved
military capabilities indicated it. Thus the numbers the author’s writings
provided seemed large, and indeed they were in comparison to most other
studies; however, it can be argued they were low estimates.
Two, related to the matter of Beijing not announcing China’s arms aid and
arms sales, the two are difficult to distinguish and are very hard to calculate
due to the fact little data have been made available and analysts cannot easily
assess the value of Chinese weapons or the discounts given on China’s arms
sales. There is also the matter of assigning a value to sales that China made
to nations facing serious difficulties finding a seller. Because China’s arms
transfers are so large this should not be ignored. Both arms aid and sales have
been cited here when even sparse or vague information is available. More
discussion on this issue is to be found in the next section of this chapter.
It is worth pointing out the United States and some other Western countries
have gained considerable foreign policy influence because of giving and sell-
ing arms and it is not always clear which it is.
The problem of a lack of official announcements of assistance applies
especially to China’s help to two or three countries to build nuclear weap-
ons. This has never been discussed in any detail by China or the recipients
(North Korea and Pakistan, but also Iran). The value has not been divulged
by anyone. For that reason it has never been counted as aid by any analyst.
Nor have the financial gains these countries have made from countries that
they in turn assisted to go nuclear and/or helped acquire delivery systems
(meaning missiles). This has been large in amounts and valuable to the
countries China provided succor to directly and indirectly.
Three, China has pledged aid that it did not deliver. This happened
during period one mostly due to changed circumstances in the recipient
country or Beijing reassessing its relations with a potential recipient. It has
occurred during period two in spite of China becoming a rich nation (in for-
eign exchange), but for different reasons. Some analysts say the amount of its
aid not delivered is more than 90 percent. This may not be absurd (though
the figure is probably much too high) in view of the fact that China’s foreign
aid and investments have grown very fast in recent years and are so large
they cannot be delivered or implemented quickly.7 Indeed much of China’s
foreign assistance has been delayed because of the huge scope of its pledges
and the complex nature of many of its projects.8 There is another reason for
postponements: much of China’s financial help to African, Central Asian,
Latin American, and the Middle Eastern countries (usually loans or invest-
ments) has been tied to acquiring resources. These transactions take time
to complete; thus time lags are understandable. Certainly China is not in
the habit of making false promises; on the contrary its aid and investment
pledges are generally taken at face value and should be.9
Four, there is no feasible way to put a value on China’s financial help
given to developing countries by China buying their goods at above market
prices, by providing tariff privileges, etc. In fact, these were not taken into
account in any work on the subject. It need be noted that other aid-giving
countries have never included either in calculating their aid. Mention of
them, however, was made throughout this work as this writer feels they
should be. But there is no formula for measuring the value of them. As
mentioned, considerable US “aid” (not so true of Europe and Japan) has
been given in the form of granting lower tariffs and has been very valuable
in facilitating recipient countries’ economic development, and has given the
provider considerable respect and leverage. This is less true of China, though
China has extended tariff advantages to developing countries more than
Europe or Japan and has done this much more in recent years.10 China also
extends financial help to developing countries through remittances (thought
not of the scope of the United States), budget supports, balance of trade off-
sets, currency swaps, and by sending tourists and other means.
Five, China has written off repayment of much of its assistance given in the
form of aid loans as well as many of its investments. Beijing did this in the case
of foreign aid early on, so it is not something new. In recent years, however, the
magnitude of China’s debt forgiveness has been huge. In 2008 China pledged
to cancel all its interest-free loans to less developed countries that matured
before that date.11 China has made some very large, almost blanket pledges of
debt cancelations to African countries (cited in Volume 3, Chapter 2). Analysts
of foreign aid given by most countries have not taken this into consideration
because it means constantly revising aid figures, which they find inconvenient
and/or difficult to do. Indeed, debt forgiveness is ongoing but it is awkward
to factor it into aid calculations. This is even more a problem in the case of
investments because investments are by definition not supposed to be for-
given as it turns them into aid and thus creates confusion about the use of the
two terms, or conflates them. Written off investments are mentioned in this
book because they constitute a substantial amount of China’s financial aid to
developing countries. Also they are important to the recipient’s development
plans and they afford the donor nation, China, influence.
In this connection it needs to be noted that in many cases China no doubt
planned or at least expected to cancel repayment even before the investment
was made. It did this to hide from the Chinese public the fact this was really
aid. This is something most Western observers have not considered in assess-
ing China’s foreign assistance since they assume that the Chinese political
system is an authoritarian one and therefore public opinion does not matter.
In fact, China does this more than most other countries. Public opinion
matters in China. This is especially so now because China’s financial assis-
tance has increased in size by such vast amounts while poverty remains prev-
alent in many areas of China. (As of 2001 China was home to the world’s
second largest population of poor people, with more than 200 million living
on less than $1.25 per day.)12 Finally, one must consider the large risks that
accompany China’s aid and investments to many developing countries. It is
obviously preferable for Chinese leaders to speak of risky investments rather
than reckless aid.
Six, China has provided financial help to both regional and international
organizations. It has purveyed extensive financial help to three regional
organizations—ASEAN, SCO, and FOCAC. Funds were and are being
divvied out by these organizations to member countries in quite sizeable
amounts. This was mentioned in previous chapters, but not analyzed thor-
oughly mainly because it is an ongoing process and the final use of much
of the funds has not yet been announced. In addition, a large portion of it
helps more than one country. This is a matter that needs to be considered
more carefully in the future.
As with its financial assistance to regional organizations, in the past China
made virtually no aid donations to or through international bodies. This is no
longer the case, though it is still not large. As noted, in the early 2000s China
pledged aid to the United Nations and some other international agencies.13
China also began working with the World Bank, the UN Conference on Trade
and Development, and the UN Industrial Organization on training assistance
and financed joint projects. China joined with the Asian Development Bank
to build the Laotian section of the Kunming-Bangkok Highway and a bridge
over the Mekong River for that highway. Beijing, as mentioned earlier, began
giving meaningful and increasingly more funds to support UN peacekeeping
at this time. Given China’s vulnerability because of the large number of its
personnel abroad working on aid and investment project, which likely exceed
a million, this is now important.14 China is likely to support peacekeeping
even more in coming years. These trends suggest that China will provide more
funding, perhaps large, to international bodies in the future.
Relating to this, China’s use of its veto in the United Nations Security
Council has constituted (especially applied to peacekeepers) a form of pres-
sure and has been coordinated with aid promises to be a “double whammy.”
It has thus become a potent measure to gain influence among developing
countries and has made its foreign assistance much more effective. China’s
support in the United Nations (as the only developing country with a
Security Council veto) has likewise helped a number of developing coun-
tries in lieu of financial assistance. Finally, Beijing has also assisted countries
in getting financial help from the UN and various other financial inter-
national organizations. These things are not counted as foreign assistance
even though they have amplified considerably the impact of China’s foreign
aid and investment diplomacy. This should be factored in, or at least men-
tioned when gauging the influence that China gains from its financial help
to developing countries.
Seven, remittances sent home by foreign workers in China are not counted
as aid, as they have not been in the case of other countries. To date this has
not been an important factor in the case of China helping developing coun-
tries (unlike in the case of the United States and to a lesser extent Europe),
and thus this writer has seen no need to count it since it was negligible.
However, this is likely to be larger in the future.15
Eight, China has signed currency swaps with a host of banks and
nations. The total amount is very large, in the range of one-half trillion dol-
lars worth of Yuan; 30 countries have been beneficiaries.16 China’s motive
in doing this has been to enlarge its foreign trade, to internationalize the
Chinese Yuan, and to pursue its dream of expanding its global influence.17
While most of the swaps have not been with developing countries and
those that were may not be in any sense aid, some of them obviously were
intended to be financial help and are or may turn into aid. For example,
the Chinese media noted that a currency swap with Argentina in 2014, cit-
ing a well-known economist, was a “boon” to that country in the context
of economic instability following loan defaults.18 China’s swap agreement
with Brazil was said to have been aimed at strengthening the BRICS group
and also “stabilizing” (cum increasing) trade between the two countries;
Brazil’s economy was experiencing problems, including slow growth, at the
time.19 Similar agreements with Ukraine and Belarus (and Russia) seem to
have been financial help or aid. And the amounts have been meaningful—
some in the double digit billions.
There are some other issues that need to be mentioned when examin-
ing China’s foreign assistance. Some make the amounts of China’s aid and
investments look larger, some smaller. Some simply explain the difficulties
in analyzing China’s foreign aid and investments.
One, many of China’s investments to developing countries have been and
are profitable. If they are regarded as foreign assistance this should not be
the case. Some of China’s foreign aid in the past accrued profits: loans with
an interest rate higher than inflation for example. But this did not involve
much money. It is much more true of its recent investments and is especially
so in Africa, as was noted in Volume 3, Chapter 2. Causing further difficul-
ties for the analyst, it is not possible to know whether Chinese investments
(or aid) to developing countries were intended to, or even thought would,
make money. Probably Chinese policy makers did not specifically plan this
in most cases, but often thought it may be possible. In other words they were
not sure. In many (most?) cases arguably they did not care.
Two, as noted in Volume 1, Chapter 4, in China, the decision-making
processes involved in giving aid and making investments make counting or
assessing both extremely difficult. The processes, as noted, are very compli-
cated, dispersed among many agencies that frequently do not cooperate with
one another, and are generally hidden from view (often from each other).
This situation has gotten worse in recent years for several reasons. The pro-
vincial governments in China have become involved in aid and investments.
Chinese companies disperse a considerable amount of aid and investments
and generally do not provide data on such transactions.20 Aid often goes to
local Chinese companies or businesses that do not keep good records. The
bottom line is that Chinese aid officials do not understand the process very
well. They are not certain what China’s aid and investment policies are,
except general principles (cited often in this book), and they do not know or
agree on definitions. Hence their announcements, reports, and their assign-
ing values to China’s financial help are inconsistent and/or incomplete.
Three, as noted throughout this book, China’s aid and investments are
often conflated. This has become a much more serious problem recently
when trying to calculate both the nature and scope of China’s financial
help to other countries. One reason is Chinese officials are much more
inclined to call China’s foreign aid as investments than their Western coun-
terparts. In some cases when the recipient prefers or asks to use the term
“investment,” Chinese officials comply.21 Underscoring the magnitude of
this problem, according to one writer, if one distinguishes clearly between
the two, China’s foreign aid (using a strict definition of the term and not
factoring in loans forgiven) peaked in the 1970s and has declined since.22
Most observers, of course, would not agree with this; but it does give some
resonance to the problem.
Four, as noted above, there was almost no factoring in of the differ-
ences in values of either goods or currencies changing over time. Inflation
is a factor in China’s foreign assistance as it has been with aid giving by
other countries. It was cited in this book; but, as in most other studies, it
was also assumed the reader was aware of it. Considering inflation China’s
early aid would be larger than the figures reflect. If this were done Vietnam
might be considered a much larger recipient of China’s financial assistance.
Albania would rank higher. The Tan-Zam Railroad would be more impor-
tant. Again, since influence was the major concern, comparisons with other
countries giving assistance at the time are mentioned but inflation is usually
not deciphered. China’s currency was overvalued at times and undervalued
at other times. Early on the Yuan was patently overvalued. Considering this,
China’s aid during period one (perhaps up to 1994) was overstated though
other factors offset this.23 Later the Yuan was considered by most observers
to be undervalued to give China an advantage in foreign trade. But by how
much it was undervalued was (and is, if indeed it now is) subject to consider-
able debate and difficult to decide.24 In any case, factoring in China’s under-
valued currency the value of its aid should be revised upward.25
In view of all of these obstacles to measuring the dollar value of China’s aid
and investments, it is arguably much more instructive to examine the kinds
of China’s financial help, how generous it was, to whom it went and why, its
successes and failures, the challenges it has presented, and its future.
The Different Types and the Generosity of China’s Assistance

As noted in Volume 1, Chapter 1, much has been said and written about the
different kinds of financial assistance China has purveyed and how it differs
from that extended by other nations. Here these issues need to be revisited
and recent trends assessed.
During period one of its aid giving, China purveyed more financial help
to North Korea and North Vietnam than to any other countries. Its aid
to these two was in large part arms and military equipment. It also sent
soldiers, many of whom were killed or injured. China also provided a con-
siderable amount of funds for war rehabilitation and economic develop-
ment that was only occasionally reported. It is thus virtually impossible to
say what portion of its aid to these two countries was military aid; in any
event, it was large.26
Most of China’s aid to North Korea and North Vietnam was obviously
gratis or free aid. What China provided in the form of loans for arms was
probably not repaid; thus it became grant aid later. So too with China’s
arms aid to various groups fighting wars of national liberation; this was
“free aid.”27 Elsewhere, during period one of its aid giving, particularly
toward the end of the period, China’s military aid consisted of a mix of
grants and sales.28 But it was still mostly grant aid or became that later.
Certainly overall China’s military aid was more generous in terms of the
grant factor than its “economic aid.”
During period two China’s arms transfers became more sales than
grants.29 One of the reasons for this was that Beijing did not want to give
the impression at home that it was “giving away” too much Chinese money.
There was both public opposition and “concern” among top members of
the Chinese Communist Party expressed over Mao’s overly generous aid.
Another reason was that having broken its aid relations with Vietnam and
Albania and focusing on its own economic development almost to the exclu-
sion of other goals it sought to sell arms for profit in the same way it sought
markets for its other products.30
In any event, China vended weapons to a sizeable number of countries
and the total sales were quite large.31 From 1984 to 1987 arms sales pro-
duced $8.2 billion in foreign exchange or about 7 percent of the income
gained from China’s total exports.32 China saw opportunities to sell its mili-
tary wares and make money doing so.33 So it did. It is difficult to know to
what degree Chinese leaders expected to compete with the United States,
Russia, and other sellers. In any case China now seeks to use arms transfers
as a means to make profits, gain influence, and realize its foreign policy
objectives.34
As noted in preceding chapters, China provided valuable assistance to
several countries seeking to have a nuclear capability and eventually nuclear
weapons. China provided assistance as well, directly or indirectly, in the
form of transfers of technology of various kinds, and even models and
components for delivery systems to North Korea and Pakistan, plus Iran.35
Due to the sensitive nature of nuclear proliferation and US opposition and
in order to protect its global image, China was more willing to help other
countries acquire delivery systems than nuclear weapons.
In the late 1990s, under US pressure China began to restrict its arms sales
and subsequently made a decision to adhere to the Non-Proliferation Treaty
and the Missile Technology Control Regime. In 1997, the Chinese govern-
ment promulgated a document called the Export Controls for Military Goods
whereby Beijing pledged to halt the transfer of weapons of mass destruction.
In 1998, the military surrendered jurisdiction over arms aid and sales. The
State Administration for Science, Technology, and Industry for National
Defense (a civilian organization) took control of arms negotiations.36 Since
then China claims it has adhered to its promises.37 Yet the United States and
some other countries have in a number of instances disputed this. China’s
response has been that there are loopholes in the agreements or difficulties
in interpreting them. Also Beijing admits that Chinese companies have on
occasion violated the agreements without the government knowing about
it. In any case China is not now in a large way violating arms control agree-
ments with its weapons aid or sales.38
According to a number of sources, in recent years China’s arms sales have
increased in volume and value. In fact, China’s arms sales (of conventional
weapons) have ranked it consistently among the top ten arms-exporting
nations. Still China’s sales are not close in scope or value to the sales of the
top arms-purveying countries, especially the United States and Russia. In
2008 China ranked ninth in the world in sales. In 2010 it ranked fourth and
in 2012 third. China sold weapons worth $11 billion from 2005 to 2010.39
During the period 2006 to 2010 China transferred conventional weapons to
39 countries.40 A portion of China’s arms transfers during these years were
free or based on loans that were later forgiven but most were labeled, and
were originally at least, sales. However, its transfers, even if many sales are
categorized as aid, have been, in contrast to period one, much less than its
“economic aid.”
The types of weapons China transferred during period one were small and
simple. China’s small arms were generally considered good quality, needed
few repairs, and were less expensive than other countries’ arms. During both
periods, its list of arms for export included infantry guns, mortars, ammuni-
tion, trucks, radars, ship-to-ship and air-to-ground missiles, armored per-
sonnel carriers, tanks, various kinds of ships, and some jet fighter aircraft.
China’s later transfers have been more sophisticated and have caused more
concern to the United States and other Western countries.41
During period two, Pakistan has been the largest recipient of China’s
arms. As noted in Volume 2, Chapter 2, a considerable portion of China’s
arms deliveries to Pakistan were, and are, either not reported or were listed
as sales. However, because the sales have often been paid for with regular
aid or payments cancelled, it was, in the final analysis, mostly grant aid.
This was also true of a considerable part of China’s arms transfers to some
other countries. It was generally not true of transfers to Middle Eastern
countries; they paid in cash or oil. As noted, however, there is a caveat that
needs to be mentioned: Because of Western boycotts Middle East recipient
countries could not in most cases find sellers to provide the volume or kind
of arms they wanted.
On the other hand, China’s arms transfers have not succeeded in cement-
ing close ties generally with recipients; North Korea, Pakistan, Burma, and
Zimbabwe are exceptions. Also Albania and Vietnam, temporarily. China
has certainly not established lasting links with local militaries in many coun-
tries the way United States has. One reason is Chinese weapons deliveries
have not as a practice included much training (though training has become
more common in recent years), and China has made no serious effort to cre-
ate in the recipients any weapons compatibility with China’s own military in
order to operate jointly with that country’s military forces.42
China’s arms sales have at times created alarm in the United States. This
was the case of the sale of Chinese Silkworm missiles to Iran in the 1980s,
which threatened US ships operating in the Persian Gulf, and the CSS-2
missiles sold to Saudi Arabia. The sale of a nuclear reactor to Algeria was
also viewed in Washington as a peril to the United States and its allies and
portended to ignite an arms race in the region. While these sales were legal
according to various agreements on arms sales, the United States pushed
China to stop the sales, and they were terminated.43
China’s arms sales declined in the 1990s as a result of an increasing
demand for American-made weapons after their impressive showing during
the first Persian Gulf War. Also, after the collapse of the Soviet Union, since
Russian weapons became much more available in the world market, China’s
sales declined.44
As observed in Volume 1, Chapter 1, China’s nonmilitary or economic
aid, early on, consisted mostly of projects in the following areas generally in
this order of frequency: light industry, buildings, roads, bridges, and irriga-
tion projects.45 China favored project aid, almost always small projects (the
Tan-Zam Railroad being a major exception). China preferred projects that
could be finished quickly, such as textile mills, food processing units, and
light industry. Chinese officials liked to build infrastructure projects such as
roads, railroads, ports, dams, and other public works projects such as water
purification and irrigation systems. China also delivered considerable agri-
cultural aid. Finally, China’s foreign aid included medical aid in the form
of personnel, hospitals, and specific aid to eradicate certain diseases. China
generally favored aid work that it had experience doing successfully at home
and/or aid projects it had done in other countries.46
This changed in some noteworthy ways during period two. According to

the Chinese government’s white paper report on its foreign aid, 61 percent of
China’s concessional loans (at the end of 2009) were for economic infrastruc-
ture. Another 8.9 percent was defined as energy resources and development
and 3.2 percent for public facilities.47 The Rand study cited earlier states the
portion of China’s financial aid to develop natural resources is 42 percent,
40 percent to infrastructure building, and 18 percent to “other.”48 A recent
China Daily piece reports that China’s investments from 2005 to 2013 went
as follows: in Africa, 41 percent to metal extraction, 39 percent to energy,
and 30 percent to finance; in Asia, 41 percent went to energy development,
28 percent to metals, 14 percent to real estate, and 8 percent to transporta-
tion; in Latin America, 56 percent to energy, 29 percent to metal extraction,
and lesser amounts to finance.49
Regardless of how the terms are defined or their parameters one must
conclude that most of China’s foreign assistance in recent years has gone
toward building or construction and toward extraction of energy and natu-
ral resources in some form. This writer believes that it is difficult to separate
the two since building infrastructure such as roads, railroads, pipelines, and
even warehouses is part of the process of resource extraction. Thus it is more
informative to look at the “realms” (redefined a bit) where China’s financial
help has gone together with the results both in terms of recipients’ satisfac-
tion and the influence China gained.
Regarding what may be broadly called construction, China’s companies
(China State and Engineering, China Railway Construction, and China
Railway Engineering) occupy the top three positions among the world’s larg-
est construction firms in terms of revenue, while China also has four of the
top five slots (number five is China Communications Construction).50 Two
reasons cited for China’s companies being so prominent abroad are: One,
its construction companies were and are involved in massive infrastructure
building in China. They have proven to be good at this. But recently busi-
ness has tapered off and Chinese companies need to be kept busy. Two,
China’s state-owned banks support (or guarantee) building projects finan-
cially and thus they do not have to be so concerned about profits as their
competitors.51 Of course, another reason is that they facilitate China’s global
influence and thus the government supports their efforts. (This point will
be discussed further in the last section of this chapter.)
Among the top categories of building are: roads and railroads (and bridges
for both), dams, pipelines, and buildings. In some of these categories China
leads the world; in others China is a major contender and is catching up fast.
In building dams China truly stands out. Again its experience at
home has been transferred abroad through foreign aid and investments.
No country in history has built more dams; no country has more dams.
China has around 50,000 large dams, more than the rest of the countries
in the world combined. Its state-run companies are building more in other
countries than all other builders combined.52 China seeks to promote clean
energy and being the largest producer of hydropower in the world helps it
do this. In addition, in the case of Southeast Asia, Beijing gains economic
and political influence since the rivers there originate in Tibet and other
parts of Western China and China’s out-of-country dam building is, there-
fore, an extension of in-country ones.53 Also, legally China owns or can
claim most of the water.
China is also the world’s foremost builder of oil and gas pipelines. This
is new; China did not build pipelines in the past. But the length of pipelines
in China is now (as of 2012) more than 90,000 kilometers, triple that in
2004. And more are scheduled to be completed in the next few years.54 This
represents both a success for China’s building at home and also its financial
assistance to other countries to build there. Asia accounts for 41.8 percent
of the world’s pipelines planned and China is the biggest builder.55 China
has recently built pipelines to Russia, to and throughout Central Asia, and
from Burma’s Indian Ocean coast to South China, and in various countries
in Africa.
China is a railroad builder. From its laborers’ experience working on rail-
road construction in the United States in the 1800s to building at home
in recent years, China had skills to offer. China Railway Construction
Corporation and China Railway Group Ltd. are the world’s second and third
largest builders.56 Construction of a rail system is currently underway that
will link Southeast Asia to China. It built and is building railroads in Central
Asia that will link China with Europe. It built railroads in Africa and Latin
America and has more under construction. Many of the railways China has
undertaken in other countries in recent years have been associated with its
financial assistance to develop mines and acquire other resources.57 They
also help China win markets.
China has also gotten into offering rapid train systems out of country
in recent years and has quickly gained a reputation for its technological
prowess. In fact, it has recently surpassed some of the world’s well-known
builders and will likely become a true giant in the field soon if it has not
already.58 China is currently working on a network of high-speed trains that
will connect China with Europe (including the United Kingdom). Seventeen
Eastern European and several Asian countries will benefit. Fast train lines
will be expanded to link up with lines in Russia and Southeast Asia. China’s
work in this realm promises to be the largest infrastructure building effort
of its kind in history.59
China is similarly a huge builder of roads. During period one of its for-
eign aid, China built roads in Vietnam, Laos, several Middle East countries
(including Yemen, Southern Yemen, and Sudan), and Africa. Most were both
commercially and strategically important. China had expertise in building
roads and could build them cheaply and quickly. Beijing was motivated by
a number of objectives.60
China gained more expertise in road building during period two when it
embarked on massive road construction in China to the extent that its super
highways recently surpassed in length the US national highway system.61
China took its experience to other countries and made a name for itself in
so doing. The Karakorum Highway is the most famous, but there are many
others. (See Volume 2, Chapter 2.)
Another large category of financial help China has provided to developing
countries is in building economic zones, in Africa mainly. (See Volume 3,
Chapter 2.) China utilized its experience in building Special Economic
Zones at home to doing something similar in other countries. Ironically to
some the zones stand out for employing a “pure capitalist model.” They skirt
or avoid onerous legal systems, overregulation, overtaxation, and govern-
ment red tape. They have generally worked well, to China’s credit. In fact,
the model of China providing foreign financial assistance is to a consider-
able degree associated with its building economic zones.
Some smaller, yet important, types of China’s foreign assistance also need
to be cited. Agricultural aid and medical aid are two of them.
During period two China continued to purvey agricultural aid as it
had during period one. China’s penchant for providing farm aid relates to
its long history of successfully developing high-yield crops. For centuries,
China effectively used irrigation, fertilizers, and other means to increase
productivity while it learned to use its land judicially so as to prevent ero-
sion and depletion of the soil’s fertility. Currently China feeds 20 percent
of the world’s people on 6 to 8 percent of the world’s arable land. Yields are
typically triple that in Africa and some other parts of the world. China has
useful experience to offer other countries, especially in growing rice, which
is the most desired grain in most of the world, as well as other food crops.62
In recent years, China has expanded the number of recipients of agri-
cultural aid significantly, in Africa mostly by offering small projects often
handled by smaller Chinese companies rather than state-owned corpora-
tions and in Latin America via larger companies.63 However, the portion of
China’s foreign aid and investments accounted for by agricultural projects
is difficult to estimate. It has varied considerably from recipient to recipi-
ent, but is generally much lower than investments in energy and natural
resources.64 China’s record in giving agricultural aid is mixed. It is generally
given on generous terms and is usually well planned and well implemented;
but many projects, especially in Africa, when turned over to the recipient
country have not been managed well.65 Nonetheless China does not seem to
be discouraged by such problems and has persisted in offering agricultural
assistance.
China is currently motivated to give agricultural aid by its concern over
food security.66 In fact, in early 2014 the Chinese government labeled it a
“number one” issue facing the country.67 With it putting more labor and
investment into its industrial sector and owing to China joining the World
Trade Organizations and signing various other international agreements on
trade that limit its ability to protect its agriculture, China has become more
dependent upon food imports. In 2003, China became a net importer of
food. Chinese leaders have also become aware of the fact that Western coun-
tries have used the “food weapon” to pressure other countries politically,
including Iraq in recent times, and even Russia.68 Finally, China faces serious
problems of losing arable land to desertification, other environmental degra-
dation, and transfers of land to industries and residential development.69
What Chinese leaders saw they could do to cope with this situation was
to try to facilitate, with financial help, agricultural development in other
countries, sign agreements to buy their products, and even send Chinese
farmers abroad. Sometimes China leased or bought land. China’s agricul-
tural aid was generally welcome. Some areas of the world, especially Africa,
that were food importers had tremendous potential to increase food produc-
tion. China could win kudos, and has, for helping these countries at a time
when Western countries were giving less food aid.70
According to China’s official statement on its foreign aid published in
2011, agricultural projects, including farms, animal husbandry, fisheries,
and water conservancy, totaled 215 up to 2009 or around 10 percent of
China’s total foreign aid projects. In terms of the amount spent (cited as
concessional loans) during this period it was 4.3 percent of the total.71 (This
report separates foreign aid from foreign investments; if investments are
counted the picture looks much different.)
There is yet another twist on China extending agricultural aid and
investments: it has used its food purchases, many of which are made during
“buying missions,” to gain leverage (just as aid and investments do) with
the selling country. China imports 70 percent of its soybeans and Brazil is
its main supplier. Wheat farmers in a number of countries covet the China
market and often exert political influence at home to export to China.
Farm lobbies help Beijing gain influence in some countries. Its buying mis-
sions go to both developed and underdeveloped countries. In 2006 Vice
Premier Wu Yi visited the United States; American farmers were elated
when she agreed to buy $15 billion worth of US products, which included
many agricultural goods.72
China has also given financial aid to developing countries in the form of
medical aid. Initially, the quality of medical services in China was not high
by Western standards and this was true of China’s medical aid as well. But
basic care was what was needed in many poor countries. At first China’s medi-
cal aid was given through the Red Cross and as humanitarian aid.73 This was
later expanded to directly sending medical personnel and supplies. Medical
teams gave China a presence in recipient countries and afforded Beijing a
good image at the grassroots level in many places. Later China built hospitals
in a number of countries in addition to some pharmaceutical plants.74
In recent years China has provided considerable foreign assistance to
eradicate various diseases and improve overall health standards. China’s aid
in this realm constitutes another example of giving aid based on what it had
done at home.75 According to the government’s announcements of aid poli-
cies and projected aid published in 2011, China’s efforts in this realm will
be greatly expanded. It may be that China can fill a gap in Western aid in
this realm.76
Some other forms of China’s aid and investments have been successful.
Some have not. This is also true of its giving both small and large amounts
and its financial help to countries in different regions of the world. China’s
most noteworthy successes and failure are assessed in the next two sections.
China’s Foreign Aid Successes

In the preceding chapters, the author cited numerous positive results of
China’s foreign aid and foreign investments—economic, political, military,
etc. Here China’s most important “aid successes” will be revisited in order
to assess China’s financial help to developing countries overall, China’s aid
and investment challenges to the West, and Beijing’s drive for world power
status.
During the early years of period one of its foreign aid giving, China’s
foremost success came from the military aid given to North Korea. The
vast quantity of arms aid (and, of course, volunteer soldiers) China provided
to North Korea and the economic and other help China delivered argu-
ably saved the North Korean state from collapse. One might even suggest
that North Korea would not now exist had it not been for China’s assis-
tance. Meanwhile its help garnered China a stout reputation for defending
a friendly Communist Bloc country (also a former tribute bearer) and con-
tributing meaningfully to Communist Bloc solidarity and strength while
enhancing China’s reputation as a regional if not world power.77
At this time China purveyed aid to another “fraternal Communist

friend”—North Vietnam. Beijing’s aid to Ho Chi Minh was critical to Ho
launching a war against the French after World War II and finally defeat-
ing French forces in 1954. China’s subsequent aid made it possible also for
North Vietnam to vanquish South Vietnam and the United States and
unify the country under a Communist regime. Meanwhile China also gave
aid to Communist movements in Cambodia and Laos making possible
Communist victories there.
The results of the wars in Korea and Indochina were epoch changing.
The former caused the United States, many thought, to fight the first war
it did not win. The second reputedly rendered America its first ever defeat
in war, caused US global influence to decline markedly, and precipitated
a change in the international system from bipolarity to multipolarity.78 In
other words, China was the main driver behind the two major wars fought
in the last half of the twentieth century and its aid clients won partial and
complete victories over the most powerful country in the world.79 Or at least
this was a popular way of looking at these events.
China’s arms and other aid to North Korea and North Vietnam (and
Cambodia and Laos) that made possible their victories in the wars just
cited also bankrupted America’s policy of containing China. Washington
was eventually forced to seek a rapprochement with Beijing, which it did in
1969 and after. President Richard Nixon acknowledged China was a major
world power and thus sought a friendly and robust relationship with Beijing.
Nixon also endeavored to bring China into the community of nations. This
helped Deng Xiaoping implement his reforms that ended China’s isolation
and made China a prosperous country. China’s current rise to become what
many now consider the world’s rising great power is the final result.
In the case of North Korea, China’s aid also created a friend on China’s
border and a security alliance partner, one of two and the only one that is
still in effect today (the other, with the Soviet Union, lapsed).80 Owing to
its massive aid during the war and its help in postwar reconstruction, North
Korea was, and is, deeply beholden to China. North Korea is still depen-
dent on China’s foreign aid and investments. China, as noted in Volume 2,
Chapter 3, benefits from the relationship.
After 1960 China employed its aid giving successfully against the Soviet
Union. China’s foreign assistance caused the Kremlin serious diplomatic
and other embarrassment. It splintered the Communist Bloc. It won support
for Beijing on a number of foreign policy issues concerning which it was at
odds with Moscow. It was an important factor in the Soviet Union losing a
war in Afghanistan. One might even say that it eventually led to the collapse
of the Soviet Union in 1991.81
The setbacks the Soviet Union experienced and its eventual demise, in
large measure facilitated by China’s foreign assistance, again changed the
structure of the international system: this time from a bipolar to a unipolar
one. Because of its current aid and investments surpassing the United States
and other Western countries many observers say the system is now evolv-
ing into multipolarity or bipolarity (this time with China and the United
States the two dominant powers) or unipolarity (with China becoming the
dominant power as the United States was in the wake of the Soviet Union’s
collapse).82 China’s foreign assistance thus can be credited for shifts in the
structure of the global system. This says a lot.
These big, system-changing successes of China’s financial aid were
assisted, in fact made possible, by some less spectacular ones. China’s aid
to several East European countries in the 1950s bolstered Communist Bloc
solidarity and helped the Bloc compete with the West. It changed perceptions
of China abroad. China, a poor Asian country that was not long before a hap-
less victim of colonialism and imperialism, was now helping some European
countries financially. This showed that China was magnanimous and forgiv-
ing. China’s aid also made it possible for Beijing to claim partnership with the
Soviet Union and bid for joint leadership of the Communist Bloc.83
China’s aid to non-Communist countries in the mid-1950s also made
China appear generous and caring toward the Third World. It garnered
for China a reputation for helping poor countries develop and an image of
a country with a global outlook and ambitions. Based on the scope of its
foreign aid, observers began to ask: Might China be the leader of developing
countries, or the Third World, and thus challenge or alter the global status
quo? There were, and are, good reasons for thinking this.84
Smaller, but still acclaimed, successes in China’s foreign assistance giv-
ing were also important. These cases might be seen often as “first things
first” or problems that needed to be resolved to make other things happen.
China used its foreign aid to facilitate border agreements and/or treaties
demarcating China’s border with adjacent countries. As noted earlier, China
has more borders with other nations than any country in the world. Many
of these borders were unmarked and/or in dispute when Mao came to power
in 1949. In a number of instances border feuds constituted serious security
problems for China as well as obstacles to China attaining broader foreign
policy influence.85 During period one of its aid giving the nations with
which China signed border agreements were almost “to a man” recipients
of China’s aid. Using foreign aid diplomacy China resolved several potential
problems with its neighbors and fixed its ill-defined borders.86
China employed foreign aid successfully to attain diplomatic recognition
(or at least made it happen sooner and easier) from a host of countries. The
numbers speak loudly. At the end of 1950, China had formal diplomatic
relations with only 18 countries in the world. At the end of the first period
of its foreign aid giving it had diplomatic ties with 123. Now it has formal
relations with 175.87 China gave aid proximate in time to a majority of the
countries that established embassies in Beijing and in many cases it was the
direct cause of this happening.
Similarly China used foreign aid to win support for its admission to the
United Nations in 1971. The country that sponsored the resolution to admit
China (and expel Taiwan), Albania, was one of the biggest recipients of
China’s foreign aid at the time and a country that (at the time) was depen-
dent on China’s foreign assistance. The countries that were vociferous in sup-
porting China joining the UN were recipients of China’s aid. (See Volume 1,
Chapter 4 and Volume 2, Chapter 4.) Gaining the China seat in the United
Nations proved a big victory for Beijing especially for its foreign assistance.
China not only utilized foreign aid to gain membership in the United
Nations. In the 1970s, after China won admission to the United Nations,
Beijing was exceedingly successful in using foreign assistance to entice
other countries to extend diplomatic recognition. Furthermore aid recipi-
ents granted diplomatic ties in accordance with Beijing’s unswerving one-
China principle, meaning they had to break relations with Taipei. As noted
in Volume 2, Chapter 4, aid was clearly the main reason China defeated
Taiwan diplomatically and made the People’s Republic of China recognized
around the world as the sole representative of China.
During period two of its foreign assistance, China attained more and in
many ways even bigger successes than in period one. The main reason was
that China had greatly enhanced its ability to give aid and make external
investments owing to its spectacular economic growth. That growth was
documented in Volume 1, Chapter 3. Simply put, Deng Xiaoping made
China a prosperous country, at least in foreign exchange (which provided
the means to give aid and make foreign investments).88 Critical to under-
standing the magnitude of this, China became the world’s largest holder of
foreign exchange based on its high rate of savings and it being the world’s
largest manufacturing nation and the biggest exporting country.89 Foreign
aid and investments, which complemented its other economic strengths,
gave China global influence it had not had in recent times.
In 1997 and 1998 during the Asian financial crisis, China won kudos
for not devaluing its currency (as others were doing); this helped restore
economic stability in the region. China also provided substantial emergency
financial help to several countries. Observers concluded that China’s efforts
to prevent the crisis from worsening and its actions to fix it through aid
to several countries in financial trouble redounded to Beijing’s credit and
substantially bolstered China’s reputation as a responsible country and a

global player not to mention a “partner” to other Asian nations.90
To fully realize the impact of China’s much bigger aid and investments in
the 1990s and after, one must take cognizance of the fact that almost simul-
taneous with China becoming prosperous and a huge dispenser of foreign
aid and foreign investments China’s competitors began giving less. The end
of the Cold War brought a marked decline in foreign aid giving by Western
countries since much aid had heretofore been given for strategic reasons.
Almost absent from the aid scene after 1991 was Western-Communist Bloc
strategic competition, which had up to that time greatly benefited poor
nations. Also, to the point, the savings accrued to Western countries from
ending the bipolar arms race were not passed on by increasing foreign aid
because of demands at home to reap the end of the Cold War “dividend.”91
Western aid again fell markedly as a result of the 2008 recession. Western
countries (including Japan) simply could not afford to give aid as they once
had. They were also aware of the fact developing countries were doing much
better in terms of economic growth and for that reason were less motivated
to extend aid.92 There were other factors. Aid became more unpopular with
the public in Western countries. Protectionism increased markedly among
Western countries and access to their markets contracted. In contrast to
other major providers of foreign aid and investments, China continued to
purvey extensive economic assistance; in fact, it increased it.
Along the way China experienced another foreign policy success with its
foreign assistance: it helped Beijing promote its view on human rights. In
1983, at a meeting in Bangkok, Thailand, attended by a host of Third World
countries that had and/or were receiving China’s foreign assistance, China
put forth its views on human rights and won many supporters. Most Third
World countries agreed with China’s position that human rights records
should be assessed in the context of a country’s history and culture, the
principles of sovereignty and noninterference must be respected when dis-
cussing human rights, and economic development must be regarded as a
fundamental human right. Another point was added: Foreign aid should not
be contingent upon human rights conditions. The Bangkok Declaration, an
important human rights document, was the product of this meeting; it for-
malized these and some other points, mainly ones that China promoted.93
This was not just an isolated case. According to a later report from the
European Council on Foreign Relations, support for China’s position on
human rights grew markedly from less than 50 percent at the beginning
of the century to 74 percent in 2008.94 Meanwhile, voting with the United
States in the UN General Assembly on human rights issues, which was over
50 percent in 1995, fell to less than half that in the next ten years. Forty-one
countries that were deemed supporters of the United States on human rights
issues, or America’s human rights perspective, shifted to support China.95
And China continued to pursue its views on human rights. Most devel-
oping countries, particularly those that China had given foreign assistance
to, agreed with China’s positions. Some even perceived that China had won
the “human rights war.” Proof of this was seen in early 2009: On her first
visit to China as secretary of state, Hillary Clinton, who had been a sharp
critic of China in the past on human rights, said that these issues, that is,
human rights records, “cannot interfere with resolving the global economic
crisis, climate change, and the security crisis.” One observer stated at the
time that US leaders who usually handed out lectures when visiting China
now come to “kiss up.”96
Another of China’s most noteworthy, and startling to many Western
countries, foreign aid success stories during period two was the sympathy
and backing it got for its handling of the Tiananmen Square incident of June
1989 amid an avalanche of criticisms in the West of Beijing over the matter.
As noted in Volume 3, Chapter 2, a number of African countries openly
supported Beijing using its military to put down the prodemocracy move-
ment. Overall Third World countries did not assail China’s leaders for what
happened. They did not take the position of the United States and European
countries, which was that China should be condemned and ostracized. In
fact, few Third world countries terminated or cut back their contacts with
China. China’s foreign minister, in fact, boasted that of the 137 countries
with diplomatic ties with China, only 20 reacted adversely to the Tiananmen
Square event. They, he said, “considered it China’s internal affair and felt that
other countries should not poke their noses into it.”97 A significant majority of
the countries that supported Beijing in 1989 and after had received meaning-
ful foreign assistance from China. Most that were restrained in their criticism
and/or maintained robust relations with China continued to receive China’s
foreign aid and/or investments; hence they did not change their views.
As a corollary, China also won support for its views on the issue of sov-
ereignty. During period two of its aid giving, China resurrected the Five
Principles of Peaceful Coexistence it had adopted in the 1950s and gave
them a new significance. From these principles, China derived several tenets
of foreign policy such as the “New International Order,” “China’s Peaceful
Development Road,” “China’s Peaceful Rise,” and strategic partnerships.98
Inherent in all of these ideals was China’s traditional concept of sovereignty,
which differs markedly from the Western notion of more limited sovereignty.
China has been quite successful in promoting its view; in fact, according
to one source China’s position has gained support exceeding 80 percent at
times in recent years.99
During period two China also reached border agreements with the newly
independent countries in Central Asia, again resolving sensitive territorial
issues and even potentially explosive disputes. A long stretch of China’s
Western border was fixed, which significantly enhanced China’s security.
The agreements were accompanied by significant Chinese foreign aid and/
or investments. China also signed a border agreement with Vietnam in 1999
in the context of a rapprochement between the two countries with China
providing aid and investment funds to Vietnam.100 In 2005, China signed
a joint development agreement with North Korea involving cross border
issues.101 One can say that concluding these treaties constituted still more
victories for China’s foreign aid giving.102
As noted above, after its admission to the United Nations in 1971, China
rendered Taiwan a spate of diplomatic setbacks in obtaining diplomatic rec-
ognition from a host of countries. During the 1980s, China won formal
diplomatic recognition from 19 more countries. In the 1990s, with increased
aid giving, China won 33 more. During the 2000s up to 2008, Beijing
added eight more.103 The latter were especially important because China
successfully undercut Taiwan’s president Chen Shui-bian’s efforts to win
diplomatic ties another way: as Taiwan rather than as the Republic of China
(to suggest that Taiwan was legally independent and not part of China).
China enticed most of the countries it won diplomatic recognition from
with foreign aid and investments.
In 2005 China’s legislature passed a law against Taiwan’s independence,
known as the Anti-Succession Law. Because of China’s new status as a world
power following a huge spike in its foreign currency reserves at this time,
making possible a major increase in its foreign aid and investments, few
countries expressed serious opposition to the law.104 In fact, a significant
number of countries, especially those that were big recipients of China’s for-
eign assistance, openly supported it.105
In brief Beijing utterly destroyed President Chen’s pursuit of Taiwan’s
independence. Along with policies that kept the United States committed
to its one-China policy, China’s military buildup (which Taiwan could not
match) and its impressive economic growth, which worked as a magnet
to East Asian countries (especially the agreements with ASEAN to form
a common market that did not include Taiwan), Taiwan was isolated. In
2008, Taiwan ended the “aid contest” and China stopped giving aid to iso-
late Taiwan; China had “won the war.” Taiwan’s independence was for all
intents and purposes a dead issue.106
China’s aid and investments have had critical impact in some other ways.
Most important was that China’s financial help abetted global development.
This has been especially noticeable in Africa. The poverty reduction effect
of China’s financial assistance has been widely hailed. According to one

author, Africa registered 5-plus percent economic growth in the mid-2000s,
in large measure because of Chinese investment.107 In fact, as Western
investment in Africa declined, China more than made up for the difference
with its foreign aid and foreign investments and both proved very efficient
in promoting economic progress.108
China’s financial contributions also encouraged private investment from
other countries in Africa, helped the growth of small- and medium-sized
businesses that provided employment, and built sorely needed infrastruc-
ture. Likewise stock markets grew. This happened without African countries
being buried in debt; in fact, government debt declined—from 55 percent
of gross domestic product in 2004 to 33 percent in 2012.109 This happened
because of China stimulating African economies with its investments while
canceling their debts.
African leaders expressed their gratitude and praised China for its help
and generosity. But positive feelings were broader than just those of poli-
ticians. Across Africa favorable views held by the public of China and its
investments outnumbered critical views reportedly by two to one. In some
countries China was favored by 90 percent (Ivory Coast and Mali) and over
80 percent by some others (Senegal and Kenya). Almost all African coun-
tries viewed China’s influence as more positive than America’s.110
China’s aid and investments succeeded in another realm: in general pov-
erty alleviation in the Third World. Again what China did at home it passed
on. After Deng’s reforms were implemented in China, poverty was reduced
on a huge and unprecedented scale. It is reported that by 2010 China had
removed 680 million people from poverty and that accounted for 84 percent
of those cut from extreme poverty in the entire world.111 China’s efforts at
reducing global poverty were almost as successful.
Poverty reduction, which was the central goal of the UN’s Millennium
Development Goals launched in 2000, to a large degree has been realized.112
From 1990 to 2010, extreme poverty worldwide was reduced from 43 percent
to a third or by around three-quarters of a billion people. Economic growth
has been the biggest factor. China’s model of providing growth-oriented, no
nonsense, unfettered foreign aid and investments has been given consider-
able credit for this. Clearly poverty reduction in the world has proceeded
faster in recent years paralleling China’s huge increase in providing foreign
aid and investments.113
Given China’s growing ability to offer financial help, this model’s appeal
in the Third World will no doubt grow. One might say that China already
has seized one of the West’s most important claims to fame—promoting
modernity.114 China’s foreign aid, which underscores the success of its
economic development at home, has made China a paradigm of both eco-

nomic and political change elsewhere while discrediting the Western proto-
types of both. One thing that is unique about the Chinese approach is its
using aid to promote economic change while accepting and implementing
indigenous models of development. In so doing China’s foreign assistance
adds to the appeal of the so-called Beijing Consensus while discrediting
the one-size-fits-all Western model.115 This has profoundly helped China’s
favorable image abroad.
China’s Foreign Assistance Failures

China’s foreign aid and foreign investment setbacks or failures, like its suc-
cesses, have been both more numerous and more pronounced than other
countries giving foreign assistance. There are a number of reasons for this.
First, prior to it giving aid in period one, China had no experience to
build on—unless one counts its tribute missions in the past. China’s tribute
diplomacy no doubt explains why China had a proclivity to adopt foreign
aid as an important instrument of its diplomacy. However, China’s tribute
diplomacy did not teach Chinese leaders how to employ aid to realize foreign
policy goals in the modern world.116 Anyway, Mao and other Chinese lead-
ers rejected China’s past, including its style of diplomacy. In other words, in
1949 China became virtually a new country (with a new and revolutionary
government) and was a novice at the game of foreign relations (having had
little intercourse with foreign countries as it rose to power by defeating the
Nationalists from the countryside). Thus it made mistakes that included
errors in giving foreign assistance.117
China was in particular handicapped in its aid giving during period one
by the fact that its economy was underdeveloped, it did not grow fast, and
it suffered from a shortfall of capital; thus China could not offer the scope
of aid given by the United States and other countries. Then the Great Leap
Forward and the Cultural Revolution seriously set back China’s economic
development. As noted, China, ironically in appeared, increased its aid to
some countries and even overall during some years when the economy was
doing badly (even when there was starvation in China); still it was evident
that these irrational movements hurt China’s economy and made it in the long
term unable to give as much foreign assistance as it otherwise would have.
China’s weak economy was even more a limiting factor when it expanded
its aid giving to include non-Communist countries: its aid was not large and
it faced formidable competitors in the aid game.118 The United States and
its allies were rich and could afford to give large amounts of foreign assis-
tance. In fact, Western aid (including Japan’s later) dwarfed China’s. Hence,
many of China’s aid recipients were not easily influenced by China’s finan-
cial help since much larger US and other Western aid offers were available.119
Moreover, in numerous cases, the United States and its allies worked in
tandem to undermine China’s aid diplomacy.
Another important reason for aid setbacks was that during period one
China gave aid in large measure for ideological reasons. China’s (Mao’s)
worldview underpinned most aid decisions. Putting his global perspective
into practice meant opposing imperialism and colonialism and promot-
ing wars of national liberation. But there were serious problems of defin-
ing these terms and major difficulties making policy decisions based upon
them. A related problem was that as Mao’s worldview shifted frequently the
aid agencies in China had to adjust their policies accordingly.120 They found
this difficult to do. (Thus Deng Xiaoping got rid of Mao’s ideology in mak-
ing foreign aid decisions.)
A related problem was that China was never able to find long-term
partners or allies through its aid giving. The Soviet Union and the Eastern
European Communist countries were nominal partners for a while, but this
was very superficial and by 1960 this was clearly no longer the case. Beijing
cooperated with the United States in aiding the anti-Russian forces in
Afghanistan and against the Russian and Cuban presence in certain African
countries. But this was done on a case-by-case basis and was temporary. In
other words, China’s aid diplomacy generally operated alone.
As the records show, China’s aid missions were literally “chased out” of
many countries. Some of these cases stand out: China had to give up on West
Africa mainly because of US and Soviet aid efforts. The Kremlin undercut
China’s aid influence in Mongolia and Cuba. US aid and American influ-
ence rendered China’s aid a defeat in Chile. China tried to break the US
monopoly of influence in Latin America, but failed. China suffered setbacks
in Islamic countries. Indonesia was the worst defeat for Beijing. China’s aid
could not overcome the fear of China because of its Communist ideology
and it possibly controlling a fifth column (of local Chinese).
In desperation, China attempted to compete with much larger Western
and Soviet (including Eastern European) aid when it pledged a very large
amount of financial help to Tanzania and Zambia to build the Tanz-Zam
Railroad. As noted in Volume 3, Chapter 1, this project was a political suc-
cess at least initially; but it was not a commercial success. The railroad’s
mismanagement and its inability to make a profit and sustain good services
eventually undermined its political value. Thus during period one China
did not undertake any more large projects.
Supporting wars of national liberation in particular resulted in aid fail-
ures. As observed in Volume 3, Chapter 2, China aided almost all of the
liberation movements in Africa. In consequence, Beijing built a reputation

for being very anti-status quo and a troublemaker. Thus, when there was evi-
dence that China supported a war of national liberation, the United States
and other Western countries responded by helping the government of the
target country, other factions therein, and/or nearby nations under threat.
In addition, Beijing put constraints on its aid to liberation movements in the
name of making them self-reliant and also put limits on its help to prevent a
US reaction.121 China’s use of foreign aid to support wars of national libera-
tion as a result had a poor record of success.
Increasing further the risk in supporting liberation movements, China
often supported such “struggles” more based on the friendliness (or unfriend-
liness) of the government, or sometimes a single leader, toward China than
by objective criteria as to whether there was potential for a situation devel-
oping into a genuine war of national liberation.122 Mao was also vain and
influenced by foreign leaders’ praise of him and China’s foreign aid; this was
not the basis for good foreign policy decision making.
China ending its strong ties with the Communist Bloc also resulted in
serious aid setbacks. China gave most of its aid in the early years to support
bloc solidarity (exclusively until the mid-1950s). As noted in the previous sec-
tion China’s aid to other Communist countries, most notably North Korea
and Vietnam, was very successful in the sense they had a hard impact on
the United States. But as Sino-Soviet relations deteriorated, China was less
successful in its foreign aid diplomacy vis-à-vis bloc countries. In fact, aid
competition with the Soviet Union led to numerous failures in China’s aid
diplomacy as the Soviet Union was able to give much more aid than China.
Outside the bloc, China and the Soviet Union provided aid to mostly the
same countries and as relations deteriorated after 1960 their aid giving came
into serious conflict.123
Vietnam was the most prominent case of China’s aid failing—even
though as noted earlier it was a stunning success in terms of rendering the
United States a military defeat and seriously damaging its global image.
But it failed if measured by China realizing its national interests. Vietnam
was one of China’s biggest aid recipients; yet as it turned out its aid was a
wasted effort if judged by China’s ability to keep Vietnam a friend and ally.
As noted earlier, according to China’s accounting, its aid to Vietnam was a
humongous $20 billion.124
However, there is an important caveat to mention in this connection. In
seeking a rapprochement with the United States after 1969 China reduced
its military and other aid to Vietnam and even blocked the delivery of Soviet
aid to persuade the Nixon administration to trust China and continue to
seek better relations. Mao even told Nixon when he visited China in 1972
that he wished to remove any threat to the United States from China.125
Thus, China, by accepting, and perhaps even orchestrating, its Vietnam
“aid defeat” may have won an “aid victory” insofar as Sino-American rela-
tions improved as a result.
Soviet aid rendered China other setbacks. Cuba was a dramatic case of
China’s bloc aid failing. A rupture in relations followed a brief period when
China’s aid diplomacy was intense and helped Beijing gain considerable
influence with the Cuban government. Castro applauded Mao’s model of
revolution and stated he used it to come to power. But after the Soviet Union
made larger aid offers China became Cuba’s virtual enemy. They fought on
different sides in African conflicts with arms aid, advisors, and propaganda
as their weapons.126
There were a number of other instances of Moscow winning the aid con-
test with China or, at least, rendering China’s aid diplomacy ineffective. In
the case of the second Afro-Asian Conference scheduled in 1965, both coun-
tries lost the aid contest. For China it was an especially big defeat because of
Beijing’s concerted efforts to be the leader of the Third World bloc.127
China’s aid to Albania, another of its largest recipients and one of China’s
few “aid clients,” was likewise a failure. This time the cause was China’s
shift in relations with the United States. The aid relationship was broken
and relations deteriorated badly even though Albania was dependent on
China’s aid.128
In the 1970s, China’s anti-Soviet stance and Beijing’s rapprochement
with the United States led to awkward or contradictory relations with many
developing countries. The Third World’s image of China had been that of a
nation that vehemently opposed Western (especially American) imperialism
and neocolonialism. China abandoning these causes seriously undermined
its China’s diplomacy. China’s willingness to align with right wing regimes
as it had already done in such countries as Zaire and Chile and which now
became commonplace, likewise was not received well in many countries that
were heretofore friendly to China.129
China’s largesse, reckless at times and usually extremely generous given
its economic and social conditions, and setbacks to its foreign aid diplomacy
rendered by the United States and the Soviet Union, engendered domestic
opposition to aid during the Mao period. As noted, in the 1960s there was
a discernable decrease in public support for aid giving and challenges to aid
policy observable within the Chinese Communist Party.130 The result was
that China nearly stopped giving aid in the 1970s and 80s. Some saw this as
an admission of a general failure of China’s foreign assistance.
Another factor was that China extended aid to a large number of coun-
tries, especially given the amount of money it needed for doing this. It is a
truism that the larger the number of recipients the smaller the aid dosages
and the larger the number of possible failures. Compounding the problem,
among China’s recipients were a number of nations that could not get assis-
tance elsewhere because they were considered bad risks by Western countries
(and often even by the Soviet Union and Eastern Europe). A number of
them were found also to be unstable or their leaderships morally bad. In
short, China took gambles that other aid giving countries did not and con-
sequently suffered foreign aid setbacks.131
There is yet another fact that shows the lack of success of China’s foreign
aid. During phase one China generally did not, even though it gave large
amounts of aid to some countries such as Albania, North Korea, North
Vietnam, Tanzania, Zambia, and a few other countries, create close or last-
ing aid relationships.132 While China condemned Western aid for creating
Third World dependency and foreswore not to do it, this still reflected an
ineffectiveness in China’s foreign assistance. It was said that China did not
plan well or coordinate aid sufficiently and its aid policies were often at odds
with its trade policies and other tools of foreign policy.133
There was another issue. Toward the end of period one, China get-
ting aid from international institutions and investment funds from rich
countries alienated many Third World countries and undercut China’s aid
diplomacy. Developing countries perceived that China was taking aid and
investment away from them. It was not as damaging as it might have been
because China handled the situation with finesse: Beijing offered strong
support for Third World causes and used its influence (notably its veto
in the UN Security Council) to help developing countries. Nevertheless,
receiving so much aid and investment money at the time led to a palpable
decline in influence for China’s foreign aid diplomacy and handicapped its
foreign policy.
Another cause of decline in China’s foreign aid influence was that Japan
became a much larger aid donor in the 1970s and 80s, becoming, in fact,
in official aid the world’s largest donor in 1989 (remaining so until 2001).
Further, Japan’s foreign aid influence was enhanced by the fact it was not
a Western country, its economy grew very fast, and it became a model for
underdeveloped countries seeking economic growth. China surrendered
considerable foreign aid influence to Japan in the 1970s on through the
1980s and after.134
Japan’s foreign aid reduced China’s aid influence for several other rea-
sons. Tokyo’s aid objectives were similar to those of the United States, which
amplified its aid influence. Japan also adhered to Development Assistance
Committee aid guidelines, making China’s aid seem noncompliant with
international norms (which it was) and thus less legitimate. Finally, Japan
provided aid to many of the same countries that China did, with both focus-
ing on Asian countries.135
China’s foreign aid to North Korea, as mentioned in the previous section,
made it an ally. In fact, North Korea was (and is) often said to be a Chinese
vassal state. But if that were so North Korea proved to be an expensive one
and not a compliant one. North Korea often defied China. During period
two it openly refused to accept Beijing’s views on many important policy
issues. North Korea has embarrassed China by engaging in terrorism and
building nuclear weapons in defiance of the international community. It is
widely regarded a rogue country. Thus China has often sought to disassoci-
ate itself from Pyongyang. Yet Beijing continued to purvey it foreign assis-
tance in very large amounts. Thus many world leaders in countries around
the world felt that China, with its vast aid influence, should be able to get
North Korea to refrain from its provocative behavior and they blame China
for not restraining North Korea, believing that China could do it but did
not want to.
As discussed before, early in its aid giving China employed foreign assis-
tance successfully in negotiating a number of border agreements. However,
China has been apparently less successful in using aid to draw maritime
boundaries or resolve sea territory claims. China currently has overlapping
claims with three countries in the East China Sea and five countries in
the South China Sea. An agreement was reached with Vietnam (the Beibu
Gulf Declaration concluded in December 2000 that went into force in
June 2004) and a Code of Conduct was drawn up with ASEAN in 2002.
These agreements are in play, but they have not really helped China avoid
disputes with Japan and several Southeast Asian nations, Vietnam and the
Philippines being the most serious.136
As noted in Volume 2, Chapter 1, China has given vast aid to nations
proximate to the South China Sea, but it has still not resolved territorial
claims to its satisfaction. This may be because these disputes are more
recent, China’s policies in this realm were not formulated so well, and they
involve international law.137 Alternatively it could be because of the nature
of the disputes make it more difficult to negotiate. Or perhaps China over-
estimated the impact of its aid and investments. Another reason is that the
United States has adopted a policy called the “Asian pivot” and has sided
with several Southeast Asian countries involved in disputes with China in
order to balance China’s power and influence in the region.138
China’s financial relationship with Iran is another special case in point.
As noted in Volume 3, Chapter 3, China purveyed large quantities of
arms to Iran during the Iran-Iraq War—more than that it offered to Iraq.
Though Iran paid for these weapons in cash or oil, China provided some
arms at discount prices. Likewise China extended Iran a favor insofar as

Tehran could not easily obtain weapons elsewhere. China also provided Iran
with vast quantities of funds for construction and for other uses (though
mostly in the form of investments that unlikely will turn into aid). There
was (and is) indeed a special relationship between the two countries that has
not redounded to China’s advantage in a number of respects.
China viewed Iran as the dominant power in the Middle East and saw
it to some degree as the key to speeding up the process of an evolving mul-
tipolar global international system that China favors. Iran was also China’s
foremost source of imported natural gas and a leading supplier of oil, both of
which China needs desperately as suggested in several chapters in this book.
Thus China wanted to continue to help Iran (and profit from this help).
But Chinese leaders did not want to directly challenge the United States
on the Iran issue. Furthermore, China did not wish to sully its global image
by undermining UN and Western efforts to stymie Iran’s nuclear weapons
ambitions. Specifically China was loath to use its veto in the United Nations
Security Council to support Iran’s nuclear weapon plans.139 Then Chinese
leaders found Iran difficult to deal with and came to perceive it to be a
country with which China might become too involved.140 Finally, Beijing
had to consider the fact Saudi Arabia did not support China’s Iran policy
and China gets more oil from Saudi Arabia than Iran.
How and to what degree has China’s aid and investment diplomacy suf-
fered setbacks or failures in the case of Iran? China’s trade with Iran has
approached $50 billion per year plus $6 billion more if counting trade that
goes through other countries.141 China got oil and marketed its products in
Iran. Thus Iran regarded China’s votes in favor of UN sanctions as a betrayal
and was angry.142 Meanwhile, in the West, China was said to be under-
mining the sanctions by laundering money for Iran through Chinese banks
and allowing its oil companies to operate in violation of the sanctions.143
By using a delaying action on the sanctions China has given Iran time to
continue its nuclear pursuits.144 But this has not worked well for Beijing in
terms of its other foreign policy interests.
The bottom line is that China has tried to have it both ways. It is walk-
ing a tightrope in its financial relations with Iran and in the process has hurt
its global image and its ties with other countries in the region. The gamble
for China is a serious one. How much has China at stake? The Iranian press
guesses that China has put $120 billion into energy contracts.145 Chinese com-
panies have also invested heavily in other sectors of Iran’s economy, including
commercial ventures. The amount, however, is not known. Clearly it is large.
Meanwhile China’s aid and investments diplomacy toward Islamic coun-
tries elsewhere has been impacted negatively by China’s “Muslim problem”
at home. Many of the Muslin residents in China’s Xinjiang Autonomous

Region regard the Chinese government as anti-Islamic. And they frequently
broadcast their feelings. After the outbreak of violence there in 2009, some
Muslim countries such as Turkey rendered aid to the East Turkestan Islamic
Movement that opposes Chinese rule.146 Others expressed opposition to
dealing with China on religious and other grounds. Al-Qaeda also provided
support for the Uyghurs in Xinjiang to overcome what it perceived was
China’s “overbearing” economic impact in the Muslim world.147 This is a
special problem for China and is one that may become more serious.
Then there is the Arab Spring, which caused severe losses to China in
aid or investments that it made to several Middle East countries. China
had provided aid and investment funds to these countries to gain access
to oil and other resources. China also developed a big stake in developing
markets for its goods in these countries. But Beijing was ill prepared for
what happened. Its first reaction was to support local governments’ call for
calm. This proved futile. Its diplomatic efforts did not work. China showed
a painful lack of understanding of the movements. It also lacked the logisti-
cal capabilities to evacuate its people quickly.
Thus China could not recover its aid loans and investment money in
these countries and had for the most part to write them down. This involved
billions of dollars in the case of Libya where considerable damage was done
to some of its projects. In addition, some of China’s residents and personnel
were injured. China even had difficulties removing from danger its citizens
numbering over 30,000 in Libya and 2,000 in Egypt.148 In the case of Egypt,
China had to contend with the view that it was exploiting Egypt commer-
cially. In 2010 Egypt imported $6.6 billion in Chinese goods (while China
imported only $918 million in Egyptian products).149 In 2011, 75 Chinese
companies were working on $18 billion project in construction contracts.150
Many suffered serious setbacks and lost money. In both Libya and Egypt,
China endured considerable embarrassment in not knowing what policies to
adopt toward the rebels and not initially supporting the United States, the
European Union, or UN efforts to deal with the chaos there.151
Another problem for Beijing is that its aid and investments have been
the targets of Western governments and media censure when it makes a
mistake or its aid has a negative outcome.152 The United States and other
Western countries are seldom criticized as harshly for the same or similar
errors or if their aid goes bad. Nor are India, Brazil, or some Middle Eastern
countries that have recently been providing aid and investments to develop-
ing countries. Moreover, China has not generally responded to the changes
effectively. China lacks the ability to control the international media and is
not prepared to explain or defend its aid and/or its investments very well.
In short, China has found it difficult to deal well with the criticism
around the world about various aspects of its aid diplomacy. Instances of
“bad” Chinese aid (e.g., Darfur) are frequently cited. Thus its aid giving
is often construed, rightly or wrongly, as representing selfish interests or
untoward motives, portending bad results for recipients, and more. This is
the subject of discussion in the next section.
Criticisms of China’s Foreign Aid and Investments

China’s foreign aid and investments have been the target of frequent criti-
cism. Much of it has been strident. Some observers even label it “rogue aid”
and warn of its bad consequences to recipients.153 The author has made men-
tion of complaints about China’s aid in previous chapters. Here the most
common criticisms will be addressed to either confirm or refute the charges
and/or suggest generally whether they are serious or not.
They are, in the order of importance and/or by the most frequently heard
criticisms leveled at China’s foreign aid and investment practices: overlook-
ing and even supporting bad governance (usually meaning helping authori-
tarian leaders remain in power or setting back democratization); accepting
and even encouraging human rights abuses; promoting corruption; under-
mining environmental standards and causing environmental damage; weak-
ening labor movements and/or the rights of workers and treating workers
badly while flaunting safety standards; supplying arms to bad regimes,
resulting in injuries and loss of lives; using aid or investments to buy (or bar-
ter for) energy and/or natural resources and thus plunder recipient nations’
resources; and seeking to acquire land or crops in other counties in return
for aid or investments.
Before proceeding to examine each of these charges there is an important
caveat that needs to be mentioned. Many of the criticisms leveled against
China’s foreign aid and investments connect to its not adopting (in fact,
rejecting) the West’s standards on aid giving and investing and the condi-
tions (including definitions) that Western countries and international orga-
nizations employ to promote positive changes in governance, human rights,
environmental standards, etc. In defense of China it needs to be noted that
in the past Western countries often did not adhere to the standards they
now advocate; instead they focused on promoting economic growth (both
in the recipient country and their own) and realizing certain of their foreign
policy goals.154
Moreover, China is not the only one that does not adhere to Western
principles. There are a number of other non-Western countries that have
experienced rapid economic growth in recent years and that provide foreign
assistance. These include the BRICS countries (Brazil, Russia, India, China,
and South Africa) and some others, including a number of rich Middle East
oil-exporting countries that have grown rich in recent years.155 Thus China is
not alone in offering foreign aid and investments that do not follow Western
definitions and principles; in fact the list of countries that do not is growing
quite fast in size and importance.156
Criticism of China’s foreign assistance also stems from Beijing’s view
of sovereignty (Westphalianism) that opposes outside interference into a
nation’s domestic politics. Beijing espouses a more traditional or “unrevised”
view of sovereignty. Therefore, it does not accept Western humanitarian
intervention and/or the doctrine of limited sovereignty under the rubric of
the “responsibility to protect.”157 Hence, China is viewed as an outlier that
promotes its own (heterodox in the eyes of Western countries) views through
aid and investments. (It deserves mention, however, that sovereignty is a
Western view that was imposed on China during the 1800s and after.)
Another reason for China’s “unconventional” aid diplomacy needs to be
mentioned: China has a history of being the victim of colonial encroach-
ments by Western imperialist countries as well as of hostile treatment at the
hands of the United Nation and its affiliated international organizations.
Add to this the fact that due to Deng Xiaoping’s reforms and China’s very
rapid economic growth that has made vast social and political change inevi-
table, China’s leaders feel vulnerable to outside forces that seek to destabilize
and/or contain China.
However, having said this it must be noted that China is a strong sup-
porter of globalism. It has benefited from the international economic system.
Free-market principles and trade have advantaged China immensely. Thus
it supports international trade and the current global financial regime. And,
it may change its views on sovereignty and conditions on aid and invest-
ments. Its aid giving in recent years through international organizations and
its cooperation with other nations, regional organizations, and global agen-
cies in dispensing aid and investments is becoming known. In particular
China’s support of UN peacekeepers suggests that its views on sovereignty
have changed and will change further in the future.158 Likewise its views on
hijacking and hostage taking; Chinese living abroad have increased mark-
edly in number in recent years and they are vulnerable to local assaults and
worse. On the other hand, China has certainly not unequivocally accepted
Western views on these matters. Likely it will not.159
Regarding promoting bad governance, during period one of its aid giv-
ing China advanced the Communist political model (as opposed to democ-
racy and capitalism) by giving aid only to Communist Bloc countries. Later
China included Third World countries, but mainly ones that espoused leftist
or socialist positions in their politics and/or foreign policies. China’s policies

met with some successes. Various recipient countries applauded and even
copied the Chinese prototype both in governance and economic develop-
ment. North Korea adopted a version of Mao’s Great Leap. North Vietnam
copied the Chinese formula for fighting guerrilla warfare and even its com-
munes. Other countries, especially in Africa, praised the Chinese (egali-
tarian) paradigm of development. Many Third World countries accepted
China’s (Communist) view of developing industry before agriculture. Thus
one can say that China’s foreign aid helped promote China’s political/eco-
nomic growth model, not the Western model.160
The United States and other Western countries naturally condemned
what they called China’s efforts through its foreign aid giving to promote
the Chinese (Communist) system of economic development, not to men-
tion China’s support of local revolutions. But this did not last long. China’s
ambitious economic development plans failed. Beijing’s efforts to spark rev-
olution did not produce many success stories. Sino-Soviet differences then
undermined the Communist model’s appeal.
During the early years of period two of it extending aid investments,
as noted in Volume 1, Chapter 2, pragmatism dominated China’s foreign
policy thinking and ideology became no longer of much concern. China,
in other words, was no longer a proselytizer of Communism or Socialism.
Likewise China did not employ its aid to try to found Communist parties
(which it had not done in any case) or to spread Communism. Nor did
China often use economic aid or foreign investments directly to discredit or
undermine democratic regimes.161
However, China did (and does), it is widely said, propagate the “Chinese
model.” China’s political system is authoritarian and it is successful economi-
cally, many think, because it is not a democracy. Thus the “Beijing Consensus.”
China uses its veto power in the United Nations to head off moves to make
democracy an international standard.162 China, it is said, might even globally
tip the balance of forces opposing the power of elections.163 China abets dic-
tators who are shunned by other countries. One writer states that governance
is bad in the “bottom billion” (the poorest nations) and “the Chinese are
making it worse.”164 These things are true. However, it is more accurate to say
China supports bad regimes because it does not discriminate against them
as do Western countries; resources are available there (and Western compa-
nies have sewn up agreements with the “good” countries); and the countries
China deals with are attracted to China because the United States and other
Western countries have treated them badly.
The most publicized case of China supporting a bad regime is its financial
help to the authoritarian rulers of Sudan. Based primarily on its investments
in Sudan’s oil sector, Beijing, it is said, has made it possible for the regime
there to commit genocide in the Darfur area.165 There are other examples.
When Zimbabwe’s infamous Robert Mugabe looked for money to bail
out his government, he came up with the “look east” strategy—meaning
China. Beijing welcomed him. Often when the West put the squeeze on
undemocratic leaders to clean up the misuse of oil money, China came to
their rescue. In the case of Angola’s rescue, China provided over $4 billion
in loans.166 There are numerous other countries than can be cited. Burma,
Rhodesia, and Venezuela are often mentioned.
China has contributed indirectly to bad governance, at least in retarding
democratization, in another interesting way: by buying natural resources
China makes possible tax reductions in recipient countries and since high
taxes have been the impetus for citizens demanding accountability and rep-
resentation in government, and thus democratization, China, while pro-
moting economic growth has dampened the cause of democracy at least in
the short run (though economic growth, of course, would contribute to the
growth of a middle class and democracy later).167
Regarding China’s disregard of human rights standards the argument is
made that since human rights abuses abound in China it is natural that the
Chinese government ignores them abroad. In any event, China has extended
large amounts of foreign assistance to a number of nations without consider-
ing their records of human rights abuses. In fact, a number of China’s foreign
assistance recipients have had and still have bad human rights records. This
includes (generally in order of the level of funds provided): North Korea,
Venezuela, Angola, the Democratic Republic of the Congo, Sudan, Burma,
Zimbabwe, and Rhodesia.168
However, before drawing serious inferences from this there are arguments
to be made in China’s defense. China ignoring human rights abuses elsewhere
stems from the fact China (as already noted) deems it improper to get involved
in the domestic affairs of other countries. This comports with China’s views
on sovereignty as well as its perspectives on imperialism and neocolonialism.
Therefore, it would not be consistent (in China’s view at least) for it to consider
a nation’s human rights conditions when offering financial help.
Chinese leaders also believe that adopting Western human rights stan-
dards would be an obstacle, certainly a distraction, to promoting recipi-
ents’ economic development. Most Third World countries, notably China’s
foreign assistance recipients, agree. Another explanation for China’s cool-
ness toward involvement with local human rights matters is that China is
interested in obtaining energy and natural resources and focuses its finan-
cial assistance on that to the expense of other concerns.169 Add to this the
fact the West has sewn up, by contracts and other means, oil acquisition
from countries with good human rights records; thus China has to look
elsewhere. Finally, and China is cognizant of this, the nations that impose
human rights standards the most stringently are now increasingly unable to
provide as much aid as they did in past years.
Parenthetically it should be noted that China’s human rights record has
vastly improved under Deng and his successors. Also, as noted, China has
“won the war” on the human rights issue among Third World countries. In
the Bangkok Declaration of 1983 most Third World countries agreed with
China’s points that in evaluating a country’s human rights record its history
and culture should be considered and aid should not be tied to their human
rights records. The nations that agree with China has increased further in
recent years.170
Finally, two critical questions need to be asked when evaluating China’s
foreign assistance relative to the human rights conditions in recipient coun-
tries: Have human rights standards applied by Western countries had much
impact? And, what if China were not present to give financial help?
The answer to the first question is that Western donors imposing human
rights standards on aid recipients have not had very positive results. In par-
ticular, employing human rights criteria has not had much effect on coun-
tries exporting raw materials because these countries have a choice about
whom they deal with. Lastly, private companies involved in developing
countries often look for good places to do business in and invest in and do
not heed their own countries’ rules. Meanwhile many international lending
agencies such as the World Bank also disregard the rules.171
It is a fact that China has provided a means for many “bad” recipient
countries to avoid Western pressure to improve their human rights situations.
Yet by providing aid and investments that help their economies, China has
generally improved the lot of citizens in these countries. China’s aid and
investments have also helped create a middle class in many recipient coun-
tries and this, the record shows, leads to better human rights practices. It
would seem then one has to consider balancing the two or at least look at
the long-term relationship between China’s financial help and the cause of
better human rights.172
The accusation that China through its foreign aid and foreign invest-
ments spreads corruption is a complicated one. The charge is frequently
heard that corruption is an integral part of China’s society and politics and
China granting aid and making foreign investments extends corrupt prac-
tices to other places in the world.173 Because China was not historically a
nation of law but rather a place where personal and family ties were very
important and this influences financial transactions today, the Chinese sys-
tem does lend itself to propagating certain kinds of corruption.174
In any event, the charges of corruption focus mostly on China’s invest-

ments, specifically Chinese companies involved in China’s search for energy,
raw materials, and markets. And it is widely known that Chinese compa-
nies seeking business contracts include in their budgets funds for paying
bribes.175 The government of China is also known for its practice of using
other financial inducements to advance its dealings, especially financial
negotiations, with other countries.176
However, another reason China is seen as spreading corruption is that
both the Chinese government and Chinese companies often make large
investments that the recipient is free to use without any strings attached.
Both the size of the investments and the lack of rules invite the misuse of
funds. Foreign observers and opposition politicians in Africa have noted
a number of instances in which China provided large amounts of money,
sometimes in the billions, which went into the coffers of political parties
or simply vanished because China did not demand strict oversight.177 One
might argue, however, this is the flip side of aid with strings (which many
Western advocates of better aid call for eliminating).
It also bears noting that charges of corruption involving China’s foreign aid
were not commonplace during period one. During the Deng era free-market
capitalism and the demise of ideology corruption become more prevalent.
Lastly, due to irrational price structures in free-market economies (both in
China and elsewhere), corruption has increased.178 However, the bottom line
is that China getting rich as a product of its adopting capitalism has made it
possible for it to give much more aid and its recipients have benefited.
There are some other points that deserve to be mentioned. China is not
the only country that engages in the practice of payoffs. Japan, Russia,
Turkey, Germany, France, to name a few, regularly do it too.179 In reality
very few countries do not use bribery in some form to do business in other
countries. The same criticism applies to international organizations involved
in purveying foreign aid. In fact, corruption is rampant in many of them. It
is estimated that 20 percent of World Bank funds involve corrupt practices,
to the tune of more than $100 billion over the years.180
Last but not the least China’s aid and investments are more efficient
in their implementation and in getting results than financial help offered
by Western countries because bribes make it possible to get things done
quicker.181 Delays in Western aid and investments are legend and are hurt-
ful to the recipients many of whom are in dire straits. Finally, it needs to
be stated that China by making infrastructure and construction deals for
energy or natural resources (a practice condemned by Western critics of
China) in many cases helps alleviate corruption since these transactions
often do not involve money changing hands.182
Very similar reasoning applies to the argument that China disregards

environmental standards when giving foreign aid. So it goes, China ignores
the environment at home; thus it does so abroad. China indeed has serious
environmental problems. Its air and water quality, as noted in Volume 1,
Chapter 3, in many places are very bad. It has other serious environmental
issues. And this does transfer. China is often guilty of neglecting the envi-
ronment when giving foreign aid and making investments in developing
countries.183 In particular China has been accused of causing extensive envi-
ronmental damage with its dams, mining, and logging operations. The areas
most often mentioned are in Africa, Russia (especially logging), and Southeast
Asia (logging and dams). Some of the complaints are quite serious.184
One of the reasons for this is that China sees pushing environmental
rules or standards on other countries, like governance and human rights,
as interfering in their domestic affairs—which China has sworn not to do.
Thus environmental problems are for the recipient country to deal with.
Second, Chinese leaders believe that enacting high environment standards
follows development. The path to economic prosperity in other Asian
countries suggests that this is the correct plan. Japan, South Korea, Taiwan,
Singapore, and a host of other countries oversaw cleaning up their environ-
ments when they could afford to. And they did a good job. In addition,
China views Western standards as overprotective and a cause of US and
other Western countries’ aid being inefficient and producing fewer results
than Chinese assistance. Finally, Chinese officials say that Western coun-
tries “preach” about improving the environment for the purpose of public
relations, to satisfy their own consciences for destroying the environment
in the past, and to justify hiring more of its own people (at high costs) to
carry out aid projects.185 They say that environmentalism has become an
ideology in the West and this is not conducive to fixing problems. Clearly
Western efforts to use foreign aid to protect the environment have not had
very good results.186
Meanwhile China has made serious efforts to improve the environment
in China, spending a sizeable portion of its gross national product for this
purpose.187 China has also made environmental commitments that are tied
to its foreign aid and foreign investments.188 For example, China is deter-
mined to promoting clean energy, in fact to the degree that it has embar-
rassed Western countries (a point discussed in greater depth later as one of
the challenges China presents to Western countries.)
Another charge and one that relates to China’s reported disregard for
the environment is that China purveys aid and investments solely for the
purpose of obtaining energy and natural resources, causing what is known
as the “resources curse” in recipient countries. Once the resources are used
up, the story goes, the provider’s economy will collapse and poverty will be
as bad as it was before, worse in the sense that public disillusionment will
increase. The European Parliament, the World Bank, and the Economist all
say this is true.189 This, it is even said, constitutes a new kind of colonial-
ism. Western countries also assail China for undermining the free market in
commodities and replacing it with a mercantilist system and even speculate
that China might start a “resources war.”190
Most of the criticism of China’s foreign aid and investments concerning
resource acquisition focuses on Africa. China’s financial help to Angola, the
Democratic Republic of the Congo, and Equatorial Guinea are often cited.
Also Mozambique. But critics also assail China over its many contracts with
Latin American and Central Asian countries where foreign aid and invest-
ments are linked to the acquisition of oil and other resources. Russia and
Southeast Asia are even alleged victims. In fact, virtually the entire planet is
“being raped by China” it is said, except for Europe, Japan and the United
States.191
Refuting such charges China notes it has given financial help in some
form to almost every African country. Beijing has indeed helped countries
that have neither energy nor resource riches.192 Clearly the charges seem
unfairly selective. In many cases, especially in the Middle East, little is
said about “energy-for-investments.” Middle Eastern oil-exporting coun-
tries are not poor and, it is assumed, they are able to enforce their resource
acquisition laws. Anyway, it needs to be recalled that China is very much
motivated in purveying financial help (as its critics have also noted) by its
search for markets, its pursuit strategic interests, and a host of other factors.
Incidentally, China’s Eximbank and a number of other banks and sover-
eign funds giving financial assistance consider credit worthiness critically
important.193
In counterpoint to these charges it should also be noted that China pro-
viding funds for resources has in various countries helped stabilize the econ-
omy, reduce corruption (since funds are often held in a company’s “Chinese
account,” which is watched more carefully) and has helped recipient coun-
tries attract other foreign investors (as recipients gain more confidence
because China is such a large financial player).194 Finally, as noted earlier
China causing the prices of raw materials to rise, has benefited developing
countries tremendously (though resources are not at a historical high in spite
of prices rising in recent years). Finally, a decline in prices in 2014 did not
prove to be a serious shock to resource exporting countries as many of the
countries that had gained as a result, notably in Africa, also improved their
governance and made economic reforms.195 Likewise the accusation that
China may start a resources war has not been shown to have merit.196
The Chinese government, in any event, says its main focus in extending
aid and investments is to promote mutual benefit and generate business—
not acquire energy and resources.197 In its 2011 white paper, the Chinese
government reported that 8.9 percent of its concessional loans were for
energy and resource development. This is probably near accurate if one
considers that many infrastructure projects (which constitute 61 percent of
China’s foreign aid) are linked to resource acquisition in some way but are
categorized separately, as infrastructure.198 It thus depends on how aid and
investments are cataloged. A Chinese government official has stated that
“only a fraction” of the 16,000 Chinese companies that have gone global are
“resource enterprises.”199
A frequently heard criticism of China’s foreign aid and foreign invest-
ments in recipient countries, as noted in previous chapters, is China’s
aggressive marketing of its products abroad abetted by its aid funds and
investments, and this has destroyed local businesses and engendered marked
increases in local unemployment. It is also said that Chinese products are
cheap, albeit are low quality inferior goods. It is true that China does seek
to sell its goods in other countries to keep its factories operating to alleviate
unemployment and thus social unrest, as discussed in Volume 1, Chapter 4.
There is also a compounding or “addictive” impact of China doing this:
China flooding the global marketplace with its goods makes market diversi-
fication for developing countries much more difficult causing them to need
China’s trade, aid, and investments even more.200
China “dumping” its goods, as many perceive is the situation, has visibly
resulted in a less positive image of China’s foreign assistance by local popula-
tions, noticeably more so than national leaders and academics who see the
long-term advantages of China’s financial help. This creates a gap in percep-
tions between leaders and citizens about China in many recipient countries,
which may be resolved over time, though it creates bad grassroots publicity
for China in the short run.201
In response to accusations of dumping, China has generally chosen to
answer through the World Trade Organization and other agencies on a case-
by-case basis, learning in the process. This is something new for China and
it taking the “official or legal road” has probably not been the best approach.
But the Chinese government has also itself responded. China has replied
directly in a number of countries by helping businesses that are hurt and
workers who are displaced. Chinese officials meanwhile mention to critics
that taking actions in cases of dumping has generally resulted in lower labor
productivity in both China and recipient countries.202
Another charge made against China’s foreign assistance is that Beijing
uses aid and investments to acquire title to land in other countries. As
mentioned China’s leaders perceive that China faces a potential food deficit
problem because of its large population, growing urbanization, and a rela-
tively smaller amount of farmland than most countries. Adding to that, with
prosperity, citizens in China want to improve their diet and that requires
food, notably meat, which needs more land to produce. Finally, Chinese
leaders see a security problem insofar as its food supplies could be cut off.
Chinese leaders fretted about this as a result of the global financial crisis
of 2008 and the serious drought in parts of the United States in 2012.203
Therefore China wants to add to its farmland by getting some elsewhere, or
at least this is the perception held by critics.
China, in fact, has “acquired” land in a few countries, Argentina and
Brazil being the notable cases, to enhance its control over the production and
the sales of some types of crops.204 In the case of Argentina, in 2011, China’s
Beidahuang State Farms Business Trade Group allotted $1.4 billion to
develop 320,000 hectares of land. China was to “receive” around 30 percent
of the land as a guarantee for its investments.205 However, the land will be
returned to landowners in 20 years at the market price at that time (which
could mean a big profit for them and for China). This, incidentally, is the
largest development project ever in Argentina, and China was the only one
willing to provide the investment funds needed—an important point in
favor of China. In addition, China will also be responsible for developing
water and transportation resources associated with the project that will likely
provide a valuable spin-off effect for the economy overall.206
In Brazil’s case China’s state-owned company Sane Hopeful reportedly
offered $7.6 billion in investment money to produce food that China wishes
to buy and it asked for guarantees that the money will be repaid. But it is
not known exactly what all this deal will entail. China has already pur-
chased some land in Brazil but the amount is not very significant.207 In any
event, both Brazil and Argentina reacting to public concern have enacted
laws restricting foreigners purchasing land there.208
Anyway it is difficult to assess what these cases mean. It may suggest that
a new tenet of Chinese aid and investment policy is in place. It may mean
very little. It may be good for recipients; it might not be. At present it is too
early to say. China’s officials contend that China has no policy to buy land
abroad; yet China has already done so.209 Still the amount is not large and
the conditions do not suggest this is a Chinese land-grab scheme as some
suspect. In any event, a number of countries have purchased land in other
countries; China is not the biggest.210
Critics of China’s foreign aid and foreign investments have also cited
China for undermining labor rules, the interests of workers, safety stan-
dards, and more. They have even charged China’s officials with underpaying
workers, withholding salaries, and even ordering beatings and killings.

Because of that some have described China’s financial aid as creating a new
kind of colonialism that matches or is even worse than the Western colonial
oppression of past centuries.211
Whether or not these practices are widespread or not there is no question
they exist. One must ask why. There are some explanations. With the close
of the Mao era the perception in China was widespread that the “workers’
state” was a failure not only in terms of economic development but also on
account of the colossal human (including labor) rights abuses it perpetrated.
Many felt capitalism, even considering its known oppression of workers and
its other evils, could not be worse. Under Deng, China therefore paid little
attention to labor rules or laws. Indeed workers were not treated well in
China. But many espoused the view that they should sacrifice and it would
be worth it to do so because their children would have better lives. China
took this attitude to other countries. In addition, China’s aid and investment
officials do not carefully oversee its companies, many of which subcontract
work, and this has led to less regard for workers.212
In some of the areas where there are reports of bad treatment of labor there
are also to be found hostile attitudes toward unions, poor working condi-
tions, discrimination against some workers, paying salaries insufficient to
meet basic needs, withholding wages, and pressuring or forcing workers into
dangerous working environments. Even killing workers has occurred in some
places.213 Some of the places where the infringements are the worst include
the mines in Zambia, the Congo, Peru, and Burma. Projects in Mozambique,
Gabon, and a number of other African countries have also been cited.214
There are some rationalizations for this: Chinese officials who oversee
aid projects and companies that use China’s investment funds behave worse
where local corruption is worse. They have treated workers less well since
1991 when the Cold War ended and Western aid declined as did aid com-
petition between the West and the Soviet Union. Workers conditions got
even worse after 2008 when Western companies had much less money for
aid and investments.215 In other words, the decline of Western aid and less
aid competition are factors. Another explanation is that so many Chinese
companies operate in some developing countries, 200 in Zambia alone, it is
difficult to keep tabs on them.216
One thing that can be said in China’s favor is that it has promised to deal
with these problems and it has a good record of doing what it says it will
do regarding its foreign aid and investment operations. Certainly it has the
wherewithal to fix these problems.
China has also been charged with providing arms to many of the worst
regimes in the world resulting in large number of deaths and untold suffering
during conflicts in developing countries. As noted, it is a matter of record

that China provided arms to support wars of national liberation during the
early years of its giving foreign aid and in many cases the results were bad.
During period two, often China’s arms transfers have gone to countries
ruled by less than nice dictators. Chinese weapons have fueled civil conflicts
that have been destructive in human and other terms. Sudan is the most
frequently cited example; but there are others.
During period one though China often purveyed arms to the bad guys
creating destruction and loss of life, the scope of this is debatable. It was
a Western perspective that it was large; but this was not often stated else-
where. Observably there were other participants and other much bigger
arms merchants. During period two China’s arms transfers have increased
and its arms were, and are, more sophisticated. Still China has never been
the world’s biggest purveyor of arms; most of the time it has not been close.
Also, it should also be noted that recent studies indicate that China is now
less likely to sell weapons to dictators than some other countries, including
the United States.217
One final point: It is worth considering that many of the criticisms of
China’s foreign aid and investments relate to China’s financial aid chal-
lenges to the West, the United States in particular. This issue is discussed in
the next section.
The Challenges of China’s Foreign Aid and Investments

From reading the analysis in the previous chapters and the synopsis of
China’s foreign assistance successes cited earlier in this chapter, it is quite
apparent that China’s foreign assistance presents a serious challenge, if not
a threat, to the United States and to the West, not to mention the United
Nations and various international financial organizations. Making the situ-
ation more serious, this challenge will likely increase considerably in mag-
nitude in the future.
In the past (meaning period one) China’s challenge as a dispenser of for-
eign assistance came mainly from it providing arms and other aid to two
countries on its border, North Korea and North Vietnam, that were engaged
in a war against the United States and the West. As noted, China’s assistance
helped determine the course and outcome of these important wars. China’s
financial help to groups fighting wars of national liberation also caused dif-
ficulties to Western countries.
Meanwhile, China tested the Western aid regime in some ways. China
was a new aid player, it was a poor country giving aid (and thus to some
extent it redefined what was considered generous aid), it offered financial
help without strings, it brandished a non-Western model of economic and

political modernization (as did the Soviet Union and other Communist
countries, but China’s was different), and its foreign policy was anti-status
quo.218 Thus China presented another kind of “aid challenge.”
After 1990, Beijing presented yet another challenge. China’s foreign aid
and investments grew in scope far beyond expectations; they sometimes out-
paced and even overshadowed financial help given by the United States and
other Western countries. In the mid-2000s China’s foreign assistance grew
very fast. After 2008 China became a formidable even, a dominant pro-
vider of foreign assistance. As suggested in a previous section of this chapter,
this created a backlash and became the source of many of the criticisms of
China’s aid and investments.
What are the facts? What is the “new reality” about China’s foreign
assistance?
Some believe China’s foreign assistance challenge is not yet that seri-
ous. Some say if this were the case it would be a good thing. Others say
that China’s assistance is awesome, alarming, and imperils Western foreign
assistance regimes. Indeed China has in this realm destabilized the very
structure of international relations. These issues need to be addressed. But
first a more basic question: How large is China’s foreign assistance? How
does it compare with the financial aid given by the United States, the West
generally, and international aid giving agencies? How big will it become in
the future? The views on these questions vary considerably.
One author, citing data on China’s foreign aid (that includes investments)
from official Chinese sources—which this writer has noted are far from
inclusive—puts the value of China’s foreign aid giving on average yearly from
2003 to 2006 at $2.08 billion. By contrast he says that the United States,
“the world’s largest donor state provided $31 billion in 2010 alone.”219 Aid
purveyed by Development Assistance Committee (DAC) countries in 2010
was reported to be $129 billion (an increase of 6.5 percent over 2009) or
0.32 percent of the gross national income of DAC countries.220 The total
amount of public aid given by these governments, international organiza-
tions, and nongovernmental organizations from 1960 to 2004 was over
$1.6 trillion.221 China’s aid was not close to this. One would thus conclude
that China’s aid both in cumulative terms and current allotments is small in
comparison with that dispensed by the United States, other Western coun-
tries, and international organizations.
Painting quite a different picture, a US academic institution reports that
China’s “development assistance” increased from less than $1 billion annu-
ally in 2002 to $25 billion in 2007. US bilateral “development aid, economic
and security assistance, multilateral assistance and food aid” during this
time, it says, totaled but $24 billion.222 The US Congressional Research

Service reports that in 2007, China’s foreign aid exceeded that given by the
United States by a big margin—$31 billion compared to $19.5 billion.223
In early 2011, the Financial Times reported that China’s lending to devel-
oping countries over the last two years surpassed World Bank lending—
sending shock waves throughout the world.224
A newly established website set up by the College of William and Mary
and Brigham Young University working with Development Gateway that
focuses on China’s aid and investment activities in Africa cites $75 billion as
the amount China spent on “projects” in Africa from 2000 to 2011—about
the same as the United States. But it states that China’s “FDI” the next year
alone, or in 2012, was $20 billion—advantage China.225 The website lists
China’s projects that were finished during the period and cites a completion
rate of 70 percent, a much higher figure than for Western aid or investments
projects.226
A US government organization reports that cumulative foreign invest-
ments by America as of 2012 was $20.7 trillion. This, however, must be
compared to $25.2 trillion of foreign-owned assets in the United States, or
a $4.4 trillion deficit. The current balance also favors foreign investment
in the United States over US external investments by $386 billion.227 This,
of course, is not exactly to the point because most US investment went to
and came from developed countries. Only a quarter of US external invest-
ments went to developing countries.228 Meanwhile between 2005 and mid-
2012, Chinese businesses invested $460 billion in other countries, of which
74 percent or $340 billion was directed to developing countries. 229 This
figure is almost opposite of the United States.
The conclusion to be reached is that depending on the definitions of the
terms used and whether one speaks of foreign aid or foreign investments
(or the two together) and whose figures on each one uses, the picture var-
ies considerably. The big differences in counting both China’s and United
States’ aid and investments lead to some extreme views about China’s aid
challenges. What then is the truth?
What can be said with certainty is that the United States, defining for-
eign assistance broadly and looking at cumulative figures, surpasses all com-
petitors by a very large margin. On the other hand, if looking at recent
financial transfer data, China stands out. Thus, when appraising the China
aid challenge, if looking mainly at the growth of its financial assistance and
the future projections of China’s assistance to developing countries, its chal-
lenge is quite redoubtable.
By most accounts China has recently (2008 being the turning point)
“out given” the United States and other donors to most of its recipients.
In addition, China’s financial aid to a large number of countries, many of

them important or strategic, exceeds other donors (including the United
States) several fold, and this translates into very palpable aid influence.230 As
noted in a previous chapter, China is by far the prominent donor to North
Korea. China has also outdone the United States in aid offers and deliveries
to Burma, Cambodia, Indonesia, Laos, and the Philippines (pledges only in
the case of the Philippines). Beijing has been able to outspend the United
States, Russia, and Japan combined in aiding a number of Central and
South Asian countries. China has surpassed other aid providers, including
international financial organizations, to a slew of African countries. China
is the biggest purveyor of foreign assistance to the African continent. In
2012 China passed the World Bank and the Inter-American Development
Bank in its investments in Latin America.231
What is more impressive, perhaps better described as shocking, are the
projections of China’s future foreign investments. China’s outbound invest-
ments have increased at an annual rate of 40 percent in recent years reaching
$100.45 billion in 2013. They are expected to reach $500 billion annually
within five years.232 As a result the United Nations Conference on Trade
and Development has called China the world’s “most promising” source of
investment funds.233 It would not be unreasonable to expect China’s exter-
nal investments to exceed those of the United States, Europe, and Japan in
2020 or before by any meaningful measurement, though its accumulated
investments will still be less.234
Looking at the situation another way, to explain China’s coming domi-
nance in giving financial help to developing countries, America and other
Western countries are increasingly unable to afford as much foreign finan-
cial help as they have in the past. Aid is increasingly unpopular at home with
their economies doing poorly and their debts rising fast. Put very simply
China now helps developing countries when the West cannot. This is likely
to be the situation for years to come as US and other Western aid is expected
to decline markedly for at least the next ten years.235
In the process of winning the “aid war” by giving more financial assis-
tance China has embarrassed the United States and many other Western
countries not only in the magnitude of its foreign assistance but also in its
generosity. The Organization of Economic Cooperation and Development,
as noted in Volume 1, Chapter 1, regularly publishes data on the percent
of aid relative to gross domestic product that its members contribute each
year. The goal is 0.7 percent. Most Western countries fall below the UN
guideline. The US recent figure is 0.19. China, it is reported, contributes
3.0 percent.236 While this is not a fair comparison as the United States pro-
vides more aid through private sources and helps developing countries by
giving market access, remittances, and by means other than official aid, it
nevertheless is one piece of evidence that developing countries notice. Also
China, as cited previously, has been providing financial help to developing
countries transcending the definition of assistance by cancelling debts, giv-
ing market access, making currency swaps, sending tourists, and more.
A special shock to the United States and other Western countries is the
fact China has given large amounts of financial help to three very important
regional organizations: ASEAN, SCO, and FOCAC. These organizations
are big both in terms of their populations and their economic and/or politi-
cal imprint. Critically, they exclude Western membership and generally
Western influence. This comes at a time when regional economic organiza-
tions are eclipsing international economic organizations in controlling or
managing trade, aid, and investments.237 This is new and its ramifications
are profound.
China’s aid is also widely viewed as more efficient than Western aid.
China decides on aid quickly. When it does, its bureaucracies do not slow
the delivery process as much as in other countries. In the case of Western
and international organization aid, it sometimes takes years before anything
happens. Lawyers, high-priced consultants, and technical experts encum-
ber the process. This is not so of China’s aid. Its efficiency is appreciated
by developing countries and this is embarrassing to Western countries.238
China has thus compelled Western countries to streamline their aid.
China is an even bigger challenge in another respect. As noted in Volume 1,
Chapter 1, and throughout these volumes China defines foreign aid and
foreign investments differently from the OECD’s Development Assistance
Committee and espouses its own rules and guidelines for purveying both.
China, one might say, has dared to redefine the rules. According to one
expert, in spite of prolonged Western efforts to get China to change, Beijing
appears to have little interest in embracing either the informal or formal
practices governing aid giving established by DAC member states on a num-
ber of fronts: China shows little concern with the human rights performance
of recipient governments; China does not pay attention to governance in
recipient countries; Beijing does not tie its financial assistance projects to
social change; and China is not moving toward purveying more grant aid
(though its aid is frequently transformed to grants). It gives little through
international organizations. Moreover, China’s mode of extending financial
assistance is unlikely to change much.239
Worse, China openly defies calls by the United States to conform to US
and global standards in providing foreign aid and foreign investments. The
testimonies to this effect are telling. During the George W. Bush adminis-
tration, US Aid to International Development (AID) officials reported that
the United States “strongly encouraged” China to provide its aid jointly
with other nations and/or make monitoring, access, and transparency more
of a priority in negotiating bilateral foreign assistance donations. But that
did not happen.240 Nor has it happened with any frequency since then.
There are also many specific examples of China disrupting the US and
other countries’ aid and investments. US officials in recent years have reported
that cuts the United States made in food aid to North Korea had only marginal
impact absent cooperation from China.241 That was because China’s ship-
ments of food to North Korea have been much larger—from 1996 to 2000
the latest on record were double those of the United States.242 The director
of the UN World Food Program in North Korea, Richard Ragan, stated that
North Korea received food donations from China that undercut US efforts to
negotiate with Pyongyang to induce it to change its rogue behavior.243
US senator James Webb (chairman of the East Asia and Pacific Affairs
Subcommittee of the Senate Foreign Relations Committee) visited Myanmar
in the fall of 2009. In situ he told Aung San Suu Kyi that China constituted
a threat to Myanmar’s independence. Suu Kyi replied that Myanmar’s rela-
tionship with China compared to Finland’s relationship with the former
Soviet Union.244 In other words, Burma had to accept the reality of China’s
huge financial clout and that gave China special influence.
In 2005, Angola broke off talks with the IMF when Beijing offered
$5 billion in loans and credits and China’s money came with none of the IMF’s
burdensome conditions.245 In 2009, a group of Western aid donors formed
the “Friends of Democratic Pakistan” and pledged more than $5.5 billion to
prevent Pakistan from defaulting on its foreign debts. However, demanding
Pakistan abide by IMF guidelines worsened the situation it was suppose to
fix. Here was the reason: the government was charged to expand its tax net,
but that met with opposition that made it fail. It then introduced a carbon
tax that was highly regressive.246 China’s aid did not include these encum-
brances. Pakistan naturally favored China’s aid.
Amplifying the impact of what some call China’s “rogue aid” policies, the
West, with its anemic economies, burdensome debt, and its declining ability
to give financial help, to its chagrin can no longer dictate its ideas of behavior
to aid recipients because they have choices. As noted earlier in this chapter,
making this more vexing for the West than it might be otherwise, China is
not alone in espousing different policies on aid and investments. There are
a number of other new players in the foreign assistance game that do not
belong to the OECD and do not see good reason to give aid or make invest-
ments in accordance with Western rules. These nations include most nota-
bly Brazil, India, South Korea, Saudi Arabia, and the United Arab Emirates.
But China has by far the largest economy, with the fastest growth, and is
the biggest provider of economic assistance among them. It is therefore the

potential leader of the group.247 What if China should form a “club” of new
foreign assistance donors and push its rules more aggressively?
China’s foreign aid and investments provide still another kind of chal-
lenge. Chinese companies have been edging out Western companies that do
aid work, even winning contracts from Western agencies and international
institutions that provide financial aid. In fact, there are countless cases of
Chinese companies taking aid business away from American companies.248
This has further reduced US influence among developing countries. It
has also contributed to America’s unemployment woes. The same situa-
tion applies to Europe and Japan. One might say China is expanding its
global influence in part with others’ money and at the expense of Western
countries.
Some examples are telling. China beat the bids of American companies
for multibillion-dollar deals in Afghanistan to build railroads, conduct oil
exploration, construct roads, and open mines. In Guinea, China provided
$7 billion in infrastructure aid to “win a strategic partnership” in the coun-
try’s mining sector. In Angola China spent $8 billion to get rights to the
country’s most productive oil fields. The list goes on.249 American busi-
nesses have on these and many other occasions lost out.
One of the reasons is that China has been very aggressive in using for-
eign assistance to help its own economy. As noted in Volume 1, Chapter 4,
China has to import energy and natural resources and it needs to market
its products to generate employment at home.250 Thus China has offered
aid and investment projects to ensure these needs are met. Further China is
especially good at extracting resources and building infrastructure. In short
China has been winning at this. But the United States has contributed to the
trend; it has not promoted American business abroad as in the past because
its critics find it distasteful if not morally wrong to do this—even using the
terms “war profiteering” and “corporatocracy.”251
China has also, and its beneficiaries have noted this, created more global
competition in aid giving. In fact, because China’s foreign assistance is
viewed in some quarters as a threat, some Western countries, India, and
Middle Eastern countries have increased their aid giving. This new competi-
tion has to some degree supplanted the aid contest between the West and the
Soviet Union in earlier times that was good for developing countries.252 In
any case, it has been helpful to the economic growth of developing nations
while it draws acclaim to China’s aid and investments to the embarrassment
and even anger of others.
Of special note is a new realm where China has challenged, or better said,
upstaged, the United States and Europe in its aid giving. This may in fact
be emblematic of China’s growing aid that is defying others, especially the

West. Mentioned in the previous section, China has been criticized in the
West (and it criticizes itself) for its bad environment and is said to practice
abroad what it does at home. While there are indeed still problems China
has turned this into a call to take action and its success now constitutes a
shock to the West and to some global organizations.
How this has happened is instructive. During the early Deng era, China’s
attitude toward Western comments was: “If our environment is so bad, you
should help us fix it.” China, in fact, sought and obtained vast financial help
for this purpose. In the 1990s, China became the world’s largest recipient of
environmental aid—mostly from the World Bank, the Asian Development
Bank, Japan, and Germany. This aid was quite effective in helping China in
its early efforts to improve its environment (even though the World Bank, the
Asian Development Bank, and Japan at the same time reportedly extended
more “dirty aid,” increasing it by sevenfold to China.)253
Subsequently China’s government (both local and national) and private
companies took the initiative to promote clean energy and even green busi-
nesses. One thing that enhanced China’s drive for developing clean energy
was its cooperation with Japan, one of the leading nations in this realm, and
some others (even Taiwan). One observer notes that China became much
more effective in addressing clean energy this way than had it followed mul-
tinational organizations where environmental work is highly politicized and
unduly bureaucratic.254
By 2007, the city of Rizhao in Shandong Province, with a population of
3 million could boast of over 60,000 greenhouses using solar energy while
90 percent of its households used solar water heaters (constituting 500,000
square meters of panels). By 2010, Himin Solar Energy Group produced
solar thermal systems registering annual sales three times companies in
the US. Solar Valley City in China soon became the home of 100 solar
industries.255 Meanwhile, in the United States several big solar energy com-
panies went bankrupt.
In 2010, Chinese solar panel makers accounted for over half of the world’s
total production. At this time China passed the United States in installing
wind turbines while taking the world’s top position in clean coal power and
in nuclear power (building more new plants than the rest of the world com-
bined).256 China has become the world’s leader not only in wind and solar
energy but also in manufacturing electric cars, not to mention developing
modern train and city subway systems and building dams.257
Importantly China has willingly transferred its clean energy technology
to other countries. It has provided solar panels and windmills (cheaper than
those available elsewhere or free) as aid. In fact, China’s foreign assistance
has recently focused on what it calls “climate change mitigation.”258 This,

moreover, comes at a time when “environmental aid” by other countries has
not increased and when environmental protection and economic develop-
ment can and should be coordinated.259
For the West, to rub salt in its wounds, China has bragged about this.
The Chinese government’s 2011 report on its foreign aid cites China’s help
to foreign countries in the past in building biogas facilities, electric power
stations, grids, and dams. In recent years, according to the report, foreign
aid projects in these areas have been vastly increased. Beginning in the
l980s, the report reads, China began cooperation with the United Nations
in the area of clean energy. Subsequently this expanded into wind and solar
energy. China offered training to a large number of nations in these realms.
Now, given its ability to produce solar panels and other clean energy facili-
ties cheaper than Western countries and its willingness to transfer technol-
ogy that it possesses, China has become a global leader in providing this
kind of foreign aid and foreign investments.260
China has also upstaged the United States and other Western countries
in building large infrastructure projects many of which are transnational in
nature. China has, as noted in previous chapters, taken charge of large water
control projects (such as the Mekong River scheme), has built transconti-
nental rail and road lines, has proposed vital new canals (such as ideas for
a new canal to replace or at least compete with the Panama Canal and one
in Thailand that will help ships avoid the Malacca Strait), and much more.
Many of these “grand” projects other countries simply find too big and/or
too expensive. As a result China has become known as the “world’s builder,”
an honor it has taken from the West.261
As noted earlier China is the biggest gainer from globalization. In con-
trast, the West has reconsidered globalization and has become in many ways
protectionist in its trade policies.262 China is much more able (and willing)
to open its markets to other countries as was documented in earlier chap-
ters with its granting lower and/or tariff-free privileges to many developing
nations (not to mention its generally lowering trade barriers when it joined
the World Trade Organization). The United States used to stand out in
this respect and it was an asset in terms of promoting its global image as a
superpower to do so. This advantage has moved to China in recent years.
Some argue that to be a dominant world power a nation must advocate and
practice free trade; the trend here favors China. Clearly market opening
and a confidence in globalism have greatly enhanced China’s foreign policy
influence.263
Related to this China has become the world’s foremost trading coun-
try. Since trade has long been considered an important (and growing more
important) element of power this is critical to China’s ambition to become a

world power. The numbers are shocking. In 2006 the United States was the
leading trading partner for 127 countries; China was the leader to 70 coun-
tries. Six years later, China was the leading trader with 124 countries; the
United States was the top with 76.264 There was a role reversal in an ingredi-
ent of global influence. China’s aid and investments made this possible.
China has also won considerable applause in the realm of global gover-
nance, which has long been assumed the purview of Western countries and
an area where China had negative input. Developing or “South” countries
have increasingly supported China’s position that the current concept of
global financial governance was, and is, a ruse for Europe and the United
States to intervene in others affairs and even perpetuate their underdevelop-
ment. This has prompted many Western countries to see China’s new role in
international finance as something they do not like. 265 The course of events
is instructive. In the 1980s and 90s China sought membership in world
organizations and generally abided by their rules. In the early 2000s China
became more confident and tried to offer a new voice. After 2008 and the
global recession and a drop in confidence in the Washington Consensus,
China began to take a more assertive position to alter the rules and change
the balance of influence within many global institutions.266
China has indeed gained a larger say in international institutions and in
the process has won the praise of a great number of countries in large mea-
sure as a product of its new aid, investment, and trade dominance. China
gained “market economy status” in the World Trade Organization partly
with the support of friendly aid or investment recipient countries. In the
WTO it formed a common front with African and Latin American coun-
tries to oppose rich countries’ agricultural subsidies. In the International
Monetary Fund, China has successfully opposed the organization’s efforts to
criticize developing countries’ exchange rate policies. In the UN Conference
on Disarmament China pushed a policy of nuclear-free zones and the major
powers disarming before the smaller powers. In the UN Human Rights
Council China led the push for a “universal periodic review” in lieu of sin-
gling out human rights violators.267 All of this has challenged the (Western)
status quo and has enhanced China’s influence over the future evolution of
international regimes.268
China in particular gained clout in several important international mon-
etary institutions. China increased its voting rights in the International
Monetary Fund and had some of its own citizens appointed to top posi-
tions: Justin Lin, the World Bank’s chief economist, Cai Jinyong, head of
the World Bank’s International Financial Corporation; Zhu Min, deputy
director of the IMF. After the global recession struck, China began to push
reforms of the international monetary system, including the idea that the US
dollar should be phased out as the world’s principal currency and the Yuan
play a more important role. Most experts in international finance believe
China’s Yuan will play a much bigger role as a global currency in the future
and as it does China will be able to give much more foreign assistance simply
by printing money for international financial transactions.269
To recapitulate briefly, the scope of China’s economic rise, which for the
most part explains the huge expansion of its foreign assistance giving, has
been phenomenal. In the last two decades of the twentieth century China
tripled its gross domestic product; in other words its economy grew threefold
in size. Subsequently it continued to grow at a very fast rate. At the turn
of the century America’s economy (Europe’s was about the same size) was
triple China’s in absolute dollars and double in purchasing power parity.270
A decade into the new millennium China bested Japan, the second largest
national economy in the world, and significantly closed the gap with the
United States in terms of economic size (especially if using the measure of
purchasing power parity). In foreign exchange it passed everyone and apart
from even the largest and most powerful nations in that regard.
There have been a host of predictions about how long before China will
pass the United States (and Europe) and become the largest economy in the
world. Few think this will not happen; it is only a matter of time.271 It is also
unlikely that the United States, Europe, or Japan will get out of debt soon
and accumulate a storehouse of capital—which they need to do to increase
their foreign aid giving and foreign investing or even sustain either or both
at their present levels. In both the United States and Europe, foreign aid
giving has become much more unpopular and there have been heard and
seen various proposals to reduce it substantially. China does not face this
concern, at least as seriously, and likely won’t for a long time.
Hence it is predictable that China will in the near future become the para-
mount provider of foreign aid and foreign investments in the world and then
proceed to become the supreme financial helper of all times. This fact alone
will present a grave challenge to the United States Europe, Japan, and other
aid giving nations. The details of what this entails is even more vexing.
The Future
The future of China’s foreign aid and investment diplomacy hinges on two
critical variables: The first is China’s economy. China must continue to
grow economically or at least not implode or stagnate in order to purvey
large amounts of financial help to developing countries in the future (as
it has been doing). This, of course, is axiomatic. Second is China’s global
perspective. China must continue to be driven to be a big or even dominant

world power. In other words, China must maintain its present attraction to
globalism and further enlarge its international influence, which means it
cannot retreat into a policy of autarky and/or isolationism.
These two variables connect. They are mutually supporting. China suc-
ceeding with its foreign aid and foreign investments diplomacy will facilitate
China’s continued economic growth and bolster its global ambitions. Its
succeeding in becoming a global power will encourage it to continue to
employ foreign assistance as a fundamental instrument of its diplomacy.
This symbiotic relationship characterized China’s traditional foreign rela-
tions. So it does now.
As noted in Volume 1, Chapter 3, there are good reasons to think China
can, and will, continue to grow economically. To recapitulate, some other
countries afford a precedent or model. The United States, a large coun-
try like China, grew for more than a century after the Civil War. Earlier
Europe had a long period of almost continuous growth. China’s period of
rapid growth is now just over 35 years old. The four dragons (South Korea,
Taiwan, Hong Kong, and Singapore), the other Chinese and/or Confucian
nations or political entities that launched their economic boom before
China, continue to do well economically—better than most other nations.
The similarities are, of course, not perfect; but they support the view that
China’s economy will continue to grow.
There are, of course, a number of other factors to consider in anticipating
China’s future economic growth, or lack of it. It is instructive to mention
some of these.
How did China launch its period of rapid growth? And what is likely to
derail it? China successfully adopted the Western capitalist system to pro-
duce China’s “miracle” economic development. In other words free-market
capitalism transformed China into a prosperous nation. But one can also
argue that China melded Western market capitalism and China’s poten-
tial to grow. Its strong cultural traits of an aversion to chaos and a desire
to maintain economic and political stability (though there are still many
doubters) helped.272 The fact is: given the natural instability and uncer-
tainty China’s very fast rise has fostered, China has indeed maintained quite
remarkable political and social stability.273 Just as important China had a
pent up demand for prosperity. Chinese knew of China’s prosperity in the
past. They were aware of other Chinese entities attaining it—Hong Kong,
Taiwan, and Singapore. They realized Mao’s economic strategy had failed.
They espoused the idea that being a rich nation meant being a powerful
nation (as Deng told them) and that China’s 100 years of humiliation could
be rectified this way.
China had, and has, other advantages. China’s large population means
China has the advantage of market size. In the past this, as described in
Volume 1, Chapter, was an obstacle to economic growth; but no longer.
China has overcome the obstacles a large economy presents. Its economy
is now integrated; it is no longer a cellular economy. Also, as noted in
Volume 1, Chapter 3, China has been very successful in using the enormity
of its market to attract foreign businesses to China; China demands foreign
companies assist China’s technological development in exchange for access
to the Chinese market. That has worked well and probably will continue to
do so for some time.
Another variable that usually connects to the prospects for economic
growth is a nation’s capital or the lack of it. As noted China is the foremost
nation in the world in foreign exchange, the product of its high level of
savings and a favorable balance of trade built on China’s dynamic manu-
facturing sector and a high volume of exports. In fact, in foreign exchange
holdings China now has double the world’s second ranking nation (Japan).
This strong financial position means that China can keep interest rates
and taxes low, both of which are favorable conditions for its business com-
munity. Europe, Japan, and the United States in contrast face a future
burdened by large debt, which will inevitably affect their future growth
negatively.274
In this connection, when, or as (it is likely to be a gradual process) China’s
Yuan becomes an international currency, China will be advantaged by being
able to extend more aid and foreign investments; it can simply print more
money to do this, as America has since World War II. In December 2013,
the Yuan became the second most used trade financing currency—passing
the Euro. According to a survey of senior executives at institutional invest-
ment firms done by the Economist Intelligence Unit, more than half opined
that the Yuan would pass the US dollar to become the world’s currency.275
Still another thing to consider is the fact that Chinese are an entrepre-
neurial people. This is an important factor in anticipating China’s continu-
ing economic growth. Chinese, many observers say, are natural business
people; it is in their culture (though it was suppressed by Communism under
Mao). It is in their DNA. Such a trait makes people rich and in a broader
sense seems to guarantee their nation’s growth. It will do so more than ever
in today’s environment of globalism.276
Related to their business acumen is the fact Chinese are a networking
people by their nature and their culture.277 This is a trait that given the vital
importance of information technology as it relates to a nation’s economic
dynamism is an advantage to China. Many Western observers of China
see the Internet and the proliferation of modern forms of communications
and the public attaining information as a threat to the Chinese leader-

ship’s domestic political control; in some ways China sees information as
a Western advantage and one to use against China. Thus, Chinese leaders
are cautious. On the other hand, the Chinese government has to a large
degree encouraged the growth of information technology more than it was
predicted to do. As the West continues to decline relatively in this realm
China may accrue an advantage. In the meantime networking is a boon to
China in learning the secrets of banking, market control, and much more.
In fact, China’s gains from acquiring information exceed both governments
and people in other countries.278
The effects of information technology and networking are amplified in
China’s case by the fact that China has the largest diasporas of any nation in
the world. There are more than 50 million Chinese living outside of China,
most of them in Southeast Asia—currently one of the most economically
dynamic areas of the world. Not only that, but perhaps counterintuitively
because China is prospering to the extent that it is, Chinese are still leav-
ing China in large numbers to go elsewhere to do business and to live.279
Most of those that leave stay in touch with relatives and business contacts
in China.280 This markedly increases China’s networking possibilities and
contributes to China’s potential for continued economic growth.
Another factor that will likely help ensure China’s continued growth and
maintain a healthy economy is the Chinese emphasis on education (some
would say obsession). This is also part of Chinese culture. Chinese parents
view education as highly desirable, much more than most parents, and
pursue it with great vigor.281 They, like Chinese leaders, see it as helping
China grow prosper. They also connect (correctly no doubt) education to
the nation’s strength and its position in the world.282
Mirroring China’s reverence for education and the belief that it enhances
national power the government is currently allotting much larger amounts
of money to improve its schools. China is sending more students abroad
than any other country in the world, and they have a record of doing well
and networking.283 China is also putting more money into research and
development; its annual increases in R&D spending are much higher
than the United States, Europe, or Japan.284 As a result China has recently
passed the United States in registering patents to become the world leader
in this realm. China is now also producing more scientific articles than any
other country in the world.285 At the individual level it is significant that
Chinese students are outperforming others; American students continue to
do worse.286 Clearly the evidence shows that education is one of the main
reasons individuals as well as nations prosper and in this case explain why
China is outperforming others.287
There are, of course, many who take a less optimistic view of China’s
continued economic growth. Obviously China faces a serious problem inso-
far as it cannot sustain its growth model of high savings, high investments,
and high exports. The global economy can continue to tolerate that. 288 The
question is whether China will experience a “soft landing” or a “hard land-
ing.” The latter means China will suffer an economic shock followed by
low economic growth and that means unemployment will become a critical
problem, one that might produce social instability that could derail China’s
search for improved global status.289
China no doubt has to recalibrate its economic growth strategy. In fact,
it is doing that; it is moving to a more consumer-driven economy. But can
it do that fast enough and will the process be destabilizing? That is uncer-
tain. However, there is another variable to consider: China has employed,
and continues to do so, foreign aid and foreign investments to alleviate the
problem of excess labor, capital, and goods (which the pessimists looking at
China’s economy see as serious problems). Yet this is an effective solution,
though for obvious reasons it is not often discussed. There is a certainly a
precedent that indicates this will work: The United States in the early post–
World War II period when it had too much money and produced too many
goods gave extensive foreign aid and made huge foreign investments.290
China is doing this today.
There are two other important points that need to be considered. One is
that China has put huge amounts of money into loans and investments in
other countries; much of it can be liquidated if necessary. In other words,
if China’s economy runs into difficulties it can draw on these resources.291
It can get some of its investment money back to stabilize its economy if nec-
essary. Two, many of China’s foreign investments are profitable and provide
China a source of funds in case its economy devolves.
Finally, if China’s economy falters does this not portend a global eco-
nomic collapse? It would seem so. China’s economy is the second largest in
the world. China is the world’s largest trading nation and recently its largest
provider of foreign aid and investments. Hence, China’s role in the global
economy, while troubling to some and many want China to fail, China is
in some very serious ways indispensible to global stability. In other words,
China’s economic dynamism cannot be reduced without wreaking havoc on
the entire international economy.292 In fact, China may be considered “too
big to fail,” and other countries and international agencies will probably
come to its rescue if collapse seems on the horizon.
Reducing the likelihood that China’s eonomic success will falter, China
lies in the most dynamic part of the world. Other countries in Asia are
booming. This will likely help China to stay on track. In any event, most
economists who study China predict a decline in its growth; but they don’t
predict a fall.
The second of the two factors to consider in gauging China’s future is
the question of China desiring a prominent global role. Does China plan to
play a major, or even dominant, role in the world in the future? Or put more
bluntly: Does China want to and/or plan to dominate or rule the world?
Most astute observers of China’s political leadership believe that China
seeks to expand its role in the world. This, many pundits think, is natural.
As one writer notes, China has a culture that is 4,000 years old and has not
been broken (as others have) and has 1.3 billion very talented and ambi-
tious people. The Chinese people as well as its leaders, in fact, see China
as a “super vast” nation. Compared to European countries that average
14 million in population, China is equal to one hundred of them. China
has four times as many people as the United States. In fact, China is larger
than all Western countries combined—19-plus percent or 20 percent of the
world’s population compared to 14 percent.293
Chinese citizens, like their leaders, want China to be China—meaning
not just an honorary member of the “Western” community of nations. China
seeks a special, an exalted, place in the world.294 Its large size, its economic
prowess, its “superior culture,” its values, its efficient political system, and
the decline of the West make it very possible, likely, for China to realize this
hope.295
As noted earlier China has conducted an extensive debate on China’s
role in the world. In 2003, Chinese leaders and academics began to discuss
the rise and fall of great powers and applied their ideas to China’s rise. The
debate culminated in a 12-part television series titled “The Rise of the Great
Powers.” Millions of people in China viewed it.296 China’s top leaders as well
as its new coterie of public intellectuals and even many ordinary Chinese
citizens seriously pondered on China’s place in the world.297
Some say it was 2005 when China’s view of its central role in the world
became rarefied. President Hu Jintao addressed a global audience in a speech
at the United Nations. He introduced the concept of “Harmonious World.”
Hu then explained in detail what he meant in a white paper titled “China’s
Peaceful Development Road” and the subsequent “Report to the 17th
Party Congress.” The timing was instructive: In 2005 the United States
was bogged down in wars in the Middle East and the Bush Doctrine (uni-
lateralism and regime change) was not working well; in fact, there was a
large negative reaction to both in the US and elsewhere.298 Meanwhile, by
2005, as noted in Volume 1, Chapter 3, China had developed a number of
new industries that dramatically reduced its economic dependence on the
West, and because of that it accrued a much larger store of foreign exchange.
China greatly increased its foreign aid and investments. Doing so China
took another step in supplanting the United States as the world’s dominant
economic power.
China at this time also adopted a much more assertive foreign policy.
However, both China’s rulers and its leading thinkers generally eschewed
the notion that China should become a global leader via military power;
they rejected the lessons of Nazi Germany and fascist Japan as well as the
means the United States and the Soviet Union used to dominate global
affairs during the Cold War. Chinese leaders were influenced by, and cited,
Zhao Tingyang’s book The Under-Heaven System: The Philosophy for the
World Institution, published that year. Zhao’s concept of under heaven,
tianxia, was China’s way of looking at the world that it might control. Some
suggested tianxia meant or even was China. In any case, Zhao’s “Chinese
world” would be one of tolerance and equality. Nations throughout the
world would willingly join. His ideas became an integral part of the topic of
how China would become a world power.299
Chinese leaders at length spoke of China’s peaceful rise, its support of the
United Nations system (even though China saw itself the victim of the UN
actions in the past), international norms (though different from Western
views), peace, tranquility, and harmony (a very salient Chinese traditional
view of the ideal world). Chinese leaders propounded a democratic global
system arguing that the West advanced the growth of democratic nations
but not a democratic international system.300 All of this embodied the
notion that China deserved and would seek a much-expanded role to play
in the world.
The year 2008 was another watershed for China’s claim to global lead-
ership. In August China sponsored the Olympic games and did it in great
style. Two billion people watched the games on television. Beijing outspent
the previous sponsor by a huge margin. China showed the world its culture,
its organizational skills, and its ability to do things right. Who could not
be impressed? Two months later, just three weeks after the games ended,
Lehman Brothers, the fourth largest investment bank in the United States,
collapsed into bankruptcy. The West forthwith fell into recession.
In January 2009, at the World Economic Forum in Davos, China’s pre-
mier Wen Jiabao told the group that the West was responsible for the world
recession because of the poor supervision of its financial sectors, an unsus-
tainable model of development, and a low rate of savings combined with
excessive consumption.301 To most observers it was obvious he was right.
The new Obama Administration broached the idea of a G-2 (the United
States and China) “economic axis” to deal with global economic problems.
President Obama recognized China’s economic clout. Some, however,
wondered out loud if China needed the United States.302 In any case, China
rejected the offer. That year China’s economy grew by almost 9 percent; the
US economy shrunk by more than 2.5 percent (while Europe and Japan
fared even worse). A former US deputy secretary of the Treasury said at the
time that the American model was “left under a cloud.”303
In late 2009 President Obama visited China. During his visit he barely
mentioned human rights (as had been a usual topic during US-China talks)
and appeared to bend to China’s wishes on Taiwan by concurring that Taiwan
is a “core issue” for China. Meanwhile Secretary of State Clinton remarked
that “we cannot be unkind to our banker,” meaning China. She, a big advo-
cate of human rights, brushed that subject aside. Three years later the United
States was still in a slow growth mode; China was growing at fourfold the
US pace. The economist who coined the term “Washington Consensus”
stated publicly that it was losing ground to the “Beijing Consensus.”304
Some argued China’s rise to global dominance was “naturally determined
by its geopolitical advantages.” Geographically China combines an ocean
frontage to the resources of a great continent (the world’s largest). It has
9,000 miles of coastline with good natural harbors. Inland are resources,
vast resources if calculating China’s economic influence through aid and
investments in parts of Russia, Central Asia, and beyond.305 In the past
when China ruled its known world it did this with an energetic economy,
spreading the “idea” of China to other lands, and using effectively its soft
power or cultural influence.306
Assuming it is correct that China has a desire to rule or control the world,
how more specifically does it plan to realize it?
As detailed in Volume 1, Chapter 2, and repeated in this chapter China
ruled its known world in the past chiefly through economic means—the
tribute system. It had military force to use in case it had to; but this was
not its main modus operandi. Chinese leaders knew they could not govern
by force of arms alone as this would be too costly and would not be lasting.
China faced foes that were better fighters than they. Anyway diplomacy
based on military force did not comport with China’s view of itself as being
a moral force in the world and ruling in an ethical manner.
In today’s world the situation (for China) is much the same. China will
no doubt pass the United States in coming years in military strength (2035
according to one reputed source in terms of military budget); but this will
not suffice for China to conquer and rule the world via military means for
China will likely have to outspend and outpace the rest of the world com-
bined in military power; China cannot do that anytime soon, if ever.307
There is still another element in the core thinking of Chinese leaders.
They have observed that the Soviet Union disintegrated because the United
States outspent it and the Kremlin went bankrupt and collapsed. Though
China might outspend the United States, perhaps easily, and even bank-
rupt America, Beijing probably does not appear intent on doing this. China
would still have to worry about other nations. America has allies. There
could evolve a “global alliance” to stem China’s rise. China’s economic
strength could be sapped and China could even be bankrupted.308
In summary, China’s plan to become a global power is based on the fol-
lowing: China has become the manufacturing house of the world and has
built up financial reserves accordingly. China has extended its industrial
and financial might outward. It has become the world’s builder (of roads,
railroads, dams, ports, pipelines, the construction of almost everything).
In Africa alone China has financed or helped finance the building of 3,000
kilometers of roads, 2,000 kilometers of railroads, 300 dams, hundreds of
schools, many stadiums, and much more.309 It has acquired to some degree
the role of the “world’s banker” (dispensing foreign aid and foreign invest-
ments throughout the world). This has, according to one writer, laid the
foundation for a new Chinese world.310 The United States did this in the
interwar period and after World War II and it dominated the world. Now
this “phase” of an America-dominant world has passed. It is China’s turn.
In this connection, Chinese leaders as well as most Chinese citizens real-
ize that China was a great power in the past when it was outward looking
and when it engaged in trade (and aid); when this changed China entered
a period of decline and humiliation.311 Currently China has become the
world’s foremost trading nation; prosperity, power, and respect have accom-
panied that. The figures are astounding. In the first decade of the new cen-
tury, China’s foreign trade increased sixfold—from $510 billion in 2001 to
$2.97 trillion in 2010.312 This restored to China an important role it once
played in its known world; that was when it was the dominant power and
recognized leader of its world. According to Associated Press, 124 nations,
more than half of the countries of the world, now count China as their lead-
ing trading partner.313
Finally, China’s foreign aid and investments (large and to many nations),
it may be said, prove China has global power ambitions. How so? And will
it continue to do so? One writer notes that it makes no sense for China to
send so much money abroad at what are low nominal returns and in dollars
that will ultimately provide only negative real returns once one allows for
the virtually certain appreciation of the Chinese Yuan.314 This constitutes
proof that China has global ambitions.
And there is more: China has made vast aid and investment promises,
which it will most likely keep. Some of its future projects include a 200
kilometer “dry canal” across Columbia and another through Nicaragua that
will be alternatives to the Panama Canal. It has also broached the possi-
bility of uniting the Atlantic and Pacific Oceans via the Amazon River.315
In 2013, Nicaragua’s Daniel Ortega announced that he had reached a deal
amounting to $40 billion whereby China would finance a canal to replace
the Panama Canal. The former president of the Panamanian Association of
Business Owners said at the time that China did not care about the money
but sought “world hegemony.”316
In 2014, China announced it was creating the Asian Infrastructure
Investment Bank (AIIB), starting with a contribution of $50 billion to be fol-
lowed by “authorized capital” of $100 billion.317 The AIIB was backed by a
number of nations, including European countries and US allies even though
Washington opposed the Bank. It would focus on infrastructure needs that
were said to amount to $750 billion; the Asian Development Bank was able
to supply only $13 billion annually.318 China, it was reported, wanted the
AIIB to replace both the World Bank and the Asian Development Bank
(where China’s voice was unduly small considering China’s economic foot-
print) in infrastructure development, which Chinese leaders see as the basis
of economic growth.319 Almost simultaneously China advanced the idea and
allocated huge funding of a new Silk Road (both overland and one at sea)
that would connect China with the rest of Asia and Europe—that would
have a “far greater reach” than America’s post–WWII Marshall Plan.320
With something in the range of $15 to $18 trillion (and growing) in bank
deposits and around $4 trillion in foreign exchange, China has the funds to
expand its foreign aid and foreign investments in the future and it has grand
plans to do so.321 These plans correlate with China’s dream to be a much big-
ger actor in international politics in the future. The two work in tandem.
Notes
1 China’s Foreign Aid and Investment Diplomacy to

African Nations—I
1. See Stuart Schram, The Political Thought of Mao Tse-tung (New York: Praeger,
1966), p. 256.
2. Philip Snow, “China and Africa: Consensus and Challenge,” in Thomas W.
Robinson and David Shambaugh (eds.), Chinese Foreign Policy: Theory and
Practice (Oxford: Clarendon Press, 1994), p. 284.
3. There has also been speculation that China and the Soviet Union divided
Africa into spheres of influence at this time, with China taking East Africa and
the Soviet Union West Africa, or at least some of the countries in each region.
See John K. Cooley, East Wind over Africa (New York: Walker, 1955), p. 25.
4. See World Knowledge Handbook (Peking: World Knowledge Publishing Co.,
1961), p. 408, and Peter Hann, “Africa: New Target for Peking,” China
Factbook (Hong Kong: 1962), cited in John F. Copper, China’s Foreign Aid:
An Instrument of Peking’s Foreign Policy (Lexington, MA: D. C. Heath, 1976),
p. 88.
5. In fact, the Chinese Foreign Ministry was reorganized at this time in recogni-
tion of its new and broader interest in Africa. The West Asian and African
Affairs Department was created to shift the responsibilities for Africa from
the West European and African Department. See Joseph Camilleri, Chinese
Foreign Policy: The Maoist Era and Its Aftermath (Seattle: University of
Washington Press, 1980), p. 97.
6. See Sidney Klein, Politics versus Economics: The Foreign Trade and Aid Policies
of China (Hong Kong: International Studies Group, 1968), p. 166, and David
H. Shinn and Joshua Eisenman, China and Africa: A Century of Engagement
(Philadelphia: University of Pennsylvania Press, 2012), p. 265.
7. Janos Horvath, Chinese Technical Transfer to the Third World: A Grants Economy
Analysis (New York: Praeger, 1976), pp. 40–41.
8. See People’s Daily, September 14, 1960, cited in Copper, China’s Foreign Aid,
p. 89.
208 ● Notes
9. For an account of this, see Philip Snow, The Star Raft: China’s Encounter with
Africa (New York: Weidenfeld and Nicolson, 1988), p. 145, and Wei Liang-
Tsai, Peking versus Taipei in Africa, 1960–1978 (Taipei: Asia and the World
Institute, 1982), pp. 110–11.
10. Snow, The Star Raft: China’s Encounter with Africa , p. 145. The author notes,
that China was suffering from food deficiencies and that peasants in some
areas were eating leaves of tree to ward off hunger.
11. The Communist Economic Offensive through 1964, U.S. Department of State,
p. 18, cited in Klein, Politics versus Economics, p. 167.
12. Copper, China’s Foreign Aid, pp. 89–90.
13. See Jan S. Prybyla, “Communist China’s Economic Relations with Africa
1960–1964,” Asian Survey, April 1964, pp. 1136.
14. In 1962, the United States started giving aid to Guinea, amounting to between
$45 and 60 million by 1966. See Copper, China’s Foreign Aid, p. 90.
15. Daniel Wolfstone, “Sino-African Economics,” Far Eastern Economic
Review, February 14, 1964, and Marshall Goldman, Soviet Foreign Aid
(New York: Praeger, 1967), p. 173, both cited in Copper, China’s Foreign
Aid , p. 90.
16. Le Monde, December 21, 1966, cited in Snow, The Star Raft, p. 297.
17. Zhou, accompanied by Foreign Minister Chen Yi, visited the United Arab
Republic, Algeria, Morocco, Tunisia, Ghana, Mali, Guinea, Sudan, Ethiopia,
and Somalia. China sought support for the upcoming second Afro-Asian
Conference, China’s nuclear test and its view on the test ban treaty, and its
principles of foreign aid giving. See Alan Lawrance, China’s Foreign Relations
since 1949 (London: Routledge and Kegan Paul, 1975), p. 171.
18. “China’s Aid Failures,” Asian Analyst, March 1966, cited in Copper, China’s
Foreign Aid, p. 90.
19. John F. Copper, “China’s Military Assistance,” in John F. Copper and Daniel
S. Papp (eds.), Communist Nations Military Assistance (Boulder, CO: Westview
Press, 1983), p. 120.
20. Wolfgang Bartke, China’s Economic Aid (New York: Holmes and Meier, 1975),
p. 116.
21. Ibid., p. 120.
22. African Report, February 1967, cited in Copper, China’s Foreign Aid, p. 90.
23. People’s Daily, March 13, 1970 cited in Copper, China’s Foreign Aid, p. 90.
Also see Bartke, China’s Economic Aid , p. 120.
24. “Chronicle and Documentation,” China Quarterly, January-March 1970, cited
in Copper, China’s Foreign Aid, p. 91.
25. Bartke, China’s Economic Aid, p. 116. The author believes the aid was given in
the form of a loan first negotiated in 1969.
26. Horvath, China’s Technology Transfer to the Third World, p. 6. The author says
the loan was for $41 million.
27. Agreements of this kind, but more important a treaty of friendship—which
China also signed with the government of Guinea—indicated that Chinese
Notes ● 209
leaders viewed Guinea as a friendly, anti-imperialist state. See Harold C.

Hinton, China’s Turbulent Quest (New York: Macmillan, 1970), p. 193.
28. China Topics, March 1973, cited in Copper, China’s Foreign Aid, p. 91. Also
see Horvath, Chinese Technology Transfer to the Third World, p. 8. The author
puts the aid at $10 million saying it was “budgetary aid.”
29. Xinhua, December 13, 1972, cited in Bartke, China’s Economic Aid, p. 116.
30. The Military Balance (London: IISS, 1974), p. 66.
31. New China News Agency, June 25, 1973, cited in Copper, China’s Foreign Aid,
p. 91.
32. Horvath, Chinese Technology Transfer to the Third World , p. 8.
33. Copper, China’s Foreign Aid in 1979–80 (Baltimore: University of Maryland
School of Law, 1981), p. 52. In 1980, a Chinese medical facility was completed.
34. Kwame Nkrumah had led Ghana to independence from Britain in 1957 and
established a centralized government designed to transform Ghana into a
socialist state. See Camilleri, Chinese Foreign Policy, p. 97.
35. Hinton, China’s Turbulent Quest, p. 260.
36. People’s Daily, August 22, 1961, cited in Copper, China’s Foreign Aid, p. 92.
37. Bartke, China’s Economic Aid , pp. 114–15.
38. Lawrance, China’s Foreign Relations since 1949, pp. 109–10.
39. China had signed a trade agreement as well as a treaty of friendship and non-
aggression with the government of Ghana. See Hinton, China’s Turbulent
Quest, p. 193.
40. Alexander Eckstein, Communist China’s Economic Growth and Foreign Trade
(New York: McGraw Hill, 1965), p. 232.
41. The principles were contained in a speech Zhou gave on January 15, 1964, in
Accra, Ghana.
42. People’s Daily, July 15, 1964, cited in Copper, China’s Foreign Aid, p. 92.
Horvath notes the aid was for technical assistance, which could have included
budgetary support. See Horvath, Chinese Technology Transfer to the Third
World , p. 9.
43. Nkrumah’s Subversion in Ghana (Accra: State Publishing Corporation, 1966),
p. 56.
44. Ian Taylor, China in Africa: Engagement and Compromise (London: Routledge,
2006), p. 32.
45. Klein, Politics versus Economics, p. 168.
46. Copper, China’s Foreign Aid, p. 93. China’s premier Zhou Enlai visited several
African countries, including Ghana, in December 1963 and January 1964 to
drum up support for China’s stance on the conference. See John W. Garver,
Foreign Relations of the People’s Republic of China (Englewood Cliffs, NJ:
Prentice Hall, 1993), p. 143 for details. It is uncertain whether Ghana was
going to take China’s side on the conference in view of the fact that by the end
of 1964 China had provided Ghana with about $40 million in aid compared
to $89 million that the Soviet Union had extended and $82 million given by
Eastern European nations. See Klein, Politics versus Economics, p. 168.
210 ● Notes

48. New York Times, October 26, 1966, cited in Copper, China’s Foreign Aid,
p. 93.
49. Probably a number of small aid projects funded by China were cancelled or
not finished. See Bartke, China’s Economic Aid pp. 206, 209, and 214 for men-
tion of several.
50. Taylor, China in Africa, p. 32.
51. Copper, China’s Foreign Aid, p. 93.
52. Chinese aid efforts were seen in the form of a spinning mill and irrigation and
rice cultivation among other projects. See Copper, China’s Foreign Aid in 1978,
p. 35 and Copper, China’s Foreign Aid in 1979–80, p. 51.
53. See Hinton, China’s Turbulent Quest, p. 100; Camilleri, Chinese Foreign Policy,
pp. 99–100.
54. People’s Daily, September 23, 1961, cited in Copper, China’s Foreign Aid,
p. 93.
55. It was later reported that China had sent military experts to Mali and provided
training to Mali military personnel in China, though neither were very large.
See Communist Aid Activities in Non-Communist Less Developed Countries 1978
(Washington, DC: Central Intelligence Agency, 1979), p. 4. The number of
Chinese arms technicians was put at 15 and the number trained in China
was 50. Another source reports that China provided Mali with military assis-
tance worth around $1 million during the period up to 1976. See Joseph P.
Smaldone, “Soviet and Chinese Military and Arms Transfers to Africa: A
Contextual Analysis,” in Warren Weinstein and Thomas H. Hendrickson
(eds.), Soviet and Chinese Aid to African Nations (New York: Praeger, 1980),
p. 105.
57. Ibid., p. 94.
58. Ibid.
59. Ibid.
60. Bartke, China’s Economic Aid , p. 129.
61. Ibid.
62. Shinn and Eisenman, China and Africa, p. 241.
63. Show, The Star Raft, p. 150.
65. Ibid.
67. Far Eastern Economic Review, September 28, 1979, p. 34; AFP June 8, 1979;
and Xinhua, May 17, 1980. All are cited in Copper, China’s Foreign Aid in
1979–80, pp. 46 and 48.
68. People’s Handbook 1965, p. 230, cited in Copper, China’s Foreign Aid, p. 110.
Another source puts the value of this aid at $5 million, stating that it was
half in cash and half in the form of an interest-free loan. See Bartke, China’s
Economic Aid, p. 106.
Notes ● 211
69. Gordon C. McDonald, Area Handbook for the People’s Republic of China
(Washington, DC: U.S. Government Printing Office, 1971), p. 116, cited in
Copper, China’s Foreign Aid, p. 110; Bartke, China’s Economic Aid , p. 106;
Shinn and Eisenman, China and Africa, p. 265.
72. See Philip Snow, “China and Africa: Consensus and Camouflage,” in Thomas
W. Robinson and David Shambaugh (eds.), Chinese Foreign Policy: Theory and
Practice (Oxford: Clarendon Press, 1993), p. 290. The term “America’s second
Vietnam” was mentioned in People’s Daily on January 17, 1966.
73. M. Crawford Young, “The Congo Rebellion,” Africa Report, April 1965, cited
74. Horvath, Chinese Technological Transfer to the Third World , p. 9.
75. Daily Telegraph, April 27, 1965, cited in Bartke, China’s Economic Aid, p. 108.
76. “Chinese Communist Activities in Africa,” p. 5, cited in Shinn and Eisenman,
China and Africa, p. 296.
77. Xinhua, April 11, 1967, cited in Bartke, China’s Economic Aid , p. 107.
78. Xinhua, January 25, 1977 and Far Eastern Economic Review, October 3, 1967
(regarding the number of experts in country), both cited in Bartke, China’s
Economic Aid, p. 106.
79. Xinhua, August 13, 1968, cited in Bartke, China’s Economic Aid , p. 107.
81. Yuan Wei-lun, “Peiping’s Economic and Technical Aid to Foreign Countries
in 1969,” Issues and Studies, March 1970, cited in Copper, China’s Foreign Aid,
p. 111.
83. China Quarterly, “Chronicle and Documentation,” January-March 1971, cited in
Copper, China’s Foreign Aid, p. 111. It is uncertain if this was the formalization
of earlier aid or new aid. No new aid agreements were published by either side.
84. Snow, The Star Raft, p. 157. In fact, the author notes that Chinese doctors took
care of the president’s mother, giving them access to considerable information
about what was going on in country.
85. Radio Brazzaville, January 6, 1973, cited in Copper, China’s Foreign Aid, p. 111.
86. Xinhua, July 30, 1973, and China Quarterly, “Chronicle and Documentation,”
October-December 1973. Bartke, citing Xinhua of October 20, 1972, and July
30, 1973, notes that China extended two donations of aid worth $30 million
and $10 million, respectively. See Bartke, China’s Economic Aid, p. 106.
88. The coup was characterized in the West as creating a “black Cuba.” The new
government, however, favored China over the Soviet Union. See Taylor, China
and Africa , p. 27.
89. Bruce Larkin, China and Africa, 1949–1970: The Foreign Policy of the People’s
Republic of China (Berkeley: University of California Press, 1971), p. 94, cited
212 ● Notes
90. See Helen Kitchen (ed.), A Handbook for Africa (New York: Praeger Publishers,
1963), p. 182, and Larkin, China and Africa, 1949–1970, p. 94, cited in
Copper, China’s Foreign Aid, p. 97.
93. Ibid.
94. People’s Daily, June 17, 1964, cited in Copper, China’s Foreign Aid, p. 97.
95. The number of Chinese advisors was said to be 300 and within a few years
China was the only country providing military personnel to Tanzania. See
Taylor, China and Africa, p. 276.
96. Cooley, East Wind over Africa, pp. 20 and 52, cited in Copper, China’s Foreign
Aid, pp. 97–98.
97. Copper, China’s Foreign Aid, p. 98. At this time, China’s important ally in
Southeast Asia, Indonesia, withdrew from the United Nations over the UN’s
stance on Indonesia’s confrontation with Malaysia. China at the time sup-
ported Indonesia’s call for forming a new, “revolutionary” United Nations.
Some say that China advanced the idea itself.
98. Communist Governments and Developing Nations; Aid and Trade, U.S.
Department of State, cited in Klein, Politics versus Economics, p. 172.
99. Shinn and Eisenman, China and Africa, pp. 260–61.
100. Ibid., p. 173.
101. Waldemar A. Nielsen, The Great Powers and Africa (New York: Praeger 1969),
p. 230, cited in Copper, China’s Foreign Aid, p. 100. Also, see Klein, The
Foreign Trade and Aid Policies of China , p. 172.
102. Larkin, China and Africa, 1949–1970, p. 94, and People’s Daily, July 9, 1966,
cited in Copper, China’s Foreign Aid, p. 98. Also, see Klein, The Foreign Trade and
Aid Policies of China, p. 173. The author states that $2 million of the $2.8 million
grant was used to buy a 10,000-ton freighter. Also see Camilleri, Chinese Foreign
Policy, p. 100. This writer states that the value of the aid was $4.2 million.
103. Far Eastern Economic Review, July 14, 1966, cited in Taylor, China and Africa,
p. 27.
104. Taylor, China and Africa, p. 27.
106. The author makes this judgment based on the fanfare accorded to Nyerere
when he visited China and also because the Chinese media cited many of his
laudatory comments about Mao and China.
107. George T. Yu, China and Tanzania: A Study in Cooperative Interaction
(Berkeley: University of California Press, 1970), p. 66.
108. The Sunday Telegraph, June 20, 1971, and the Hong Kong Standard, June 12,
1971, cited in Copper, China’s Foreign Aid, p. 99.
109. Deborah Brautigam, The Dragon’s Gift: The Real Story of China in Africa
(New York: Oxford University Press, 2009), p. 34.
110. China had already provided training to 250 Tanzanian pilots to fly the planes
and technicians to repair them. See Daily Telegraph, June 20, 1971, cited in
Notes ● 213
Anne Gilks and Gerald Segal, China and the Arms Trade (London: Croom
Helm, 1985), p. 54.
112. Ibid.
113. New York Times, March 31, 1974, cited in Copper, China’s Foreign Aid, p. 99.
114. See Copper, China’s Foreign Aid in 1978, p. 44, and Copper, China’s Foreign
Aid in 1979–80, p. 22, 46, and 52. This aid included a coal survey, medical,
and other aid.
115. Goldman, Soviet Foreign Aid , p. 46, cited in Copper, China’s Foreign Aid,
p. 101.
116. At this time Zambia was slated to become the headquarters of the African
Committee of Nine to aid liberation movements. See Cooley, East Wind over
Africa, p. 93.
117. People’s Daily, June 24, 1967, cited in Copper, China’s Foreign Aid, p. 101;
Bartke, China’s Economic Aid , p. 200.
120. Shinn and Eisenman, China and Africa , p. 324.
122. Ibid.
123. Ibid. Also see Ian Taylor, China and Africa, p. 164.
124. Copper, China’s Foreign Aid , p. 102; Taylor, China and Africa , pp. 164–65.
Whether Zambia was actually adopting a socialist system, however, has been
questioned. Some say it was state capitalism. China, on the other hand, did
not seem to care about this point. See A. Callinicos and J. Rogers, Southern
Africa after Soweto (London: Pluto, 1977), cited in Taylor, China and Africa ,
p. 168.
127. Xinhua, February l2, 1974, and Carol H. Fogarty, “China’s Economic Relations
with the Third World,” in China: A Reassessment of the Economy (Washington,
DC: U.S. Government Printing Office, 1975), both cited in Copper, China’s
Foreign Aid, p. 103. Also see Bartke, China’s Economic Aid, p. 200.
128. S. Chan, “China’s Foreign Policy and Africa: The Rise and Fall of China’s
Three Worlds Theory,” Round Table, Volume 10, p. 378. The Three Worlds
idea, of course, had been talked about before this.
130. Ibid., p. 170.
131. Xinhua, February 23, 1978, translated by FBIS, February 23, 1978, cited in
Copper, China’s Foreign Aid in 1978, p. 30.
132. According to the Central Intelligence Agency, China granted $230 million
in aid to Zambia in the period 1964 through 1979 compared to the Soviet
Union’s $15 million and Eastern Europe’s 60 million. See Taylor, China and
Africa, p. 171. The percentage of Zambia’s debt also reflected the importance
214 ● Notes
of China’s economic help: in the 1960s it was virtually nil; by 1976 it was
40 percent of Zambia’s total.
133. Communist Aid Activities in Non-Communist Less Developed Countries, 1980
(Washington, DC: Central Intelligence Agency, 1981), pp. 18–20.
134. Xinhua, January 14, 1979, and Xinhua, July 28, 1980, cited in Copper, China’s
Aid in 1978–80, pp. 47 and 49.
135. The term Tan-Zam (from Tanzania and Zambia) is the official name of the
project and the railroad. In East Africa it is more commonly known as the
Uhuru (or freedom) Railroad. The term “freedom” was understood to mean
that Zambia was freed from depending on export routes to the south while also
referring to the drive against the white regimes in Rhodesia and South Africa.
See Richard Hall and Hugh Peyman, The Great Uhuru Railway: China’s
Showpiece in Africa (London: Victor Gollancz, Ltd., 1976), p. 17.
136. See Copper, China’s Foreign Aid, pp. 103–5. There has been some disagreement
about the cost, one writer putting it at $500 million. See Martyn J. Davies,
“Special Economic Zones: China’s Developmental Model Comes to Africa,”
in I. Rotberg (ed.), China into Africa: Trade, Aid, and Influence (Washington,
DC: Brookings, 2008), p. 147. The discrepancy may have come from valuing
the loan in 1976 dollars, when the project was commissioned. Alternatively, the
latter figure may have included later costs for locomotive repairs and replace-
ment engines. In any event, the cost in 2008 dollars was near $2 billion.
137. Bartke, China’s Economic Aid , p. 178. Another source put the loan at
$401 million. See “Quarterly Chronicle and Documentation,” China
Quarterly, May-June 1975, cited in Copper, China’s Foreign Aid , p. 105.
138. See Copper, China’s Foreign Aid, pp. 103–4.
139. Ibid., p. 100.
141. See Hall and Peyman, The Great Uhuru Railway, p. 14. The authors opine
that the bitter ideological struggle between China and the Soviet Union was
China’s main motivator. They note that Zhou Enlai visited Africa in 1964 and
observed that the Soviet Union building the Aswan Dam had given Moscow
tremendous prestige in Africa.
142. China lacked copper, a needed resource. It produced about half of its domestic
requirement. In 1974, China signed a contract with Zambia to buy 24,000 metric
tons of copper. See Hall and Peyman, The Great Uhuru Railway, p. 194.
143. Taylor, China and Africa , p. 39.
144. Snow, “China and Africa,” p. 287.
145. Ibid.
146. This point is discussed in previous chapters. One writer has noted that China’s
decision to do the Tam-Zam project came just three months after it first tested
a hydrogen bomb. See Camilleri, Chinese Foreign Policy, p. 111.
147. The idea of building the railroad originated with Cecil Rhodes in the nineteenth
century as part of a railway system to link Britain’s colonies in Africa from
“Cape to Cairo.” The plan was not pursued seriously at the time, however.
Notes ● 215
148. For details, see George T. Yu, “Chinese Aid to Africa: The Tanzania-Zambia
Railway,” in Warren Weinstein (ed.), Chinese and Soviet Aid to Africa (New
York: Praeger, 1975), pp. 30–33.
149. Ibid.
150. Brautigam, The Dragon’s Gift, pp. 40–41.
151. Ibid.
152. Ibid.
153. Hall and Peyman, The Great Uhuru Railway, p. 13.
154. Yu Fai Law, Chinese Foreign Aid: A Study of Its Nature and Goals with Particular
Reference to the Foreign Policy and World View of the People’s Republic of China,
1952–1982 (Saarbrucken, Germany: Verlag Breitenbach, 1984), p. 302.
155. Hall and Peyman, The Great Uhuru Railway, p. 13.
156. It has even been suggested that the United States responded. Henry Kissinger
ordered a study done at the time the project was launched and Congress appro-
priated $14 million to expand facilities in Diego Garcia at the time the project
was finished. See Hall and Peyman, The Great Uhuru Railway, p. 18.
157. See New York Times, March 4, 1970, cited in Copper, China’s Foreign Aid,
p. 106.
159. Sarah Raine, China’s African Challenges (London: International Institute for
Strategic Studies, 2009), p. 57.
161. Law, Chinese Foreign Aid, p. 312.
162. Economist, September 13, 1980, cited in Law, Chinese Foreign Aid, p. 312.
163. Large aid in this case means aid totaling more than $75 million.
164. Zaire changed its name back to the Democratic Republic of the Congo in
1997.
165. Larkin, China and Africa, 1949–1970, p. 94, cited in Copper, China’s Foreign
Aid, p. 95.
166. People’s Daily, August 10, 1964, cited in Copper, China’s Foreign Aid, p. 95.
Another source put the loan at $20 million. See Bartke, China’s Economic Aid,
p. 163. Also see Horvath, Chinese Technology Transfer to the Third World , p. 11.
The author says some aid went for mineral prospecting and a water survey.
168. Ibid.
169. Cooley, East Wind over Africa , pp. 32–33.
170. Nielsen, The Great Powers and Africa , p. 213.
172. Bartke, China’s Economic Aid, p. 163. Also see Horvath, Chinese Technology
Transfer to the Third World , p. 11. Horvath says some of the aid went for an
irrigation scheme, factories, and experimental farms.
173. Copper, China’s Foreign Aid, p. 96, and Bartke, China’s Economic Aid , p. 163.
174. People’s Daily November 15, 1967, cited in Copper, China’s Foreign Aid,
p. 96.
216 ● Notes
175. See China Topics, March 8, 1972, and World Report (Japan), August 24, 1962,
cited in Copper, China’s Foreign Aid, p. 96.
176. Ibid.
177. Ibid. These figures are total figures up to the end of 1974.
180. Xinhua, April 23, 1978, cited in Copper, China’s Foreign Aid in 1978, p. 31.
181. Ibid.
182. Ibid.
183. “Desert Highway in Somalia,” Peking Review, September 15, 1978, p. 29, cited
in Copper, China’s Aid in 1978, p. 31.
184. James MacManus, “Graveyard for White Elephants,” The Guardian, March 6,
1978, p. 14, cited in Copper, China’s Aid in 1978, p. 31.
185. Xinhua, July 25, 1979, cited in Copper, China’s Foreign Aid in 1979–80,
p. 46.
187. Camilleri, Chinese Foreign Policy, pp. 97 and 99.
188. “Chronicle and Documentation,” China Quarterly, July-September 1970 and
Larkin, China and Africa, 1949–1970, p. 94, both cited in Copper, China’s
Foreign Aid, p. 89.
189. See Copper, China’s Foreign Aid, p. 82.
190. New York Times, October 17, 1971, cited in Copper China’s Foreign Aid,
p. 83.
193. New York Times, July 18, 1972, cited in Copper, China’s Foreign Aid, p. 83.
194. China Topics, March 1973, cited in Copper, China’s Foreign Aid , p. 83.
195. Copper, China’s Foreign Aid , p. 83.
196. Horvath, Chinese Technology Transfers to the Third World , pp. 63 and 65.
197. Copper, China’s Foreign Aid in 1979–80, p. 29.
198. “Sudan Foreign Aid,” Translator, Data as of June 1991 (online at www.photius
.com/countries/sudan/economy/sudan_economy_foreign aid.html).
199. The current national title is Democratic Republic of the Congo. In 1997 Zaire
again became the Democratic Republic of the Congo.
200. Cited in Bartke, China’s Economic Aid , p. 199.
201. New York Times, January 29, 1973, cited in Copper, China’s Foreign Aid,
p. 150.
203. The U.S. Department of State put the amount of the loan at $100 million.
Bartke reported it as worth $115 million; see Bartke, China’s Economic Aid,
p. 199. Also see Copper, China’s Foreign Aid, p. 150.
205. Colin Legum and Tony Hodges, After Angola: The War over Southern Africa
(London: Rex Collings, 1976), p. 50.
Notes ● 217
206. Irvin Kaplan (ed.), Zaire: A Country Study (Washington, DC: U.S. Government
Printing Office, 1978), p. 251.
207. New York Times, April 8, 1977, cited in Copper, “China’s Military Assistance,”
in Copper and Papp (eds.), Communist Nations Military Assistance, p. 114.
208. Facts on File, August 25, 1977, cited in Copper, “China’s Military Assistance,”
p. 114.
209. Joseph P. Smaldone, “Soviet and Chinese Military Aid and Arms Transfers
to Africa: A Contextual Analysis,” in Warren Weinstein and Thomas H.
Henriksen (eds.), Soviet and Chinese Aid to African Nations (New York: Praeger,
1980), p. 105.
210. Shin and Eisenman, China and Africa, p. 292.
212. People’s Daily, May 11, 1964, cited in Copper, China’s Foreign Aid, p. 108.
China was the fourth country to grant diplomatic recognition to the newly
independent Kenya.
214. Ibid.
215. See Copper, China’s Foreign Aid, pp. 108–09 for possible explanations of
China’s motives in giving aid to Kenya.
216. Bartke, China’s Economic Aid , p. 125; Horvath, Chinese Technology Transfer to
the Third World, p. 70.
218. New York Times, March 11, 1966, Larkin, China and Africa, 1949–1970,
p. 136, and China Topics, January 28, 1966, all cited in Copper, China’s
Foreign Aid, p. 109.
220. Kenya Weekly News, July 14, 1967, cited in Copper, China’s Foreign Aid, p. 108.
Also see Bartke, China’s Economic Aid , p. 125.
222. “The Communist Economic Offensive through 1964,” U.S. Department
of State, Research Memorandum, August 4, 1965, cited in Copper, China’s
Foreign Aid, p. 111.
224. Ibid., pp. 111–12.
225. Garver, Foreign Relations of the People’s Republic of China, p. 152.
226. People’s Daily, April 22, 1965, cited in Copper, China’s Foreign Aid, p. 112.
228. Horvath, Chinese Technology Transfer to the Third World , p. 12. China did not
provide information to confirm this though.
233. See Copper, China’s Foreign Aid in 1978, p. 34.
218 ● Notes
234. “Communist Governments and Developing Nations: Aid and Trade in 1968,”
U.S. Department of State, Research Memorandum, September 5, 1969, cited
237. Yuan, “Peiping’s Economic and Technical Aid to Foreign Countries in 1969,”
239. China Quarterly, “Chronicle and Documentation,” July–September 1972,
241. “Communist States and Developing Countries: Aid and Trade in 1971,” cited
in Copper, China’s Foreign Aid, pp. 113–14. Bartke, China’s Economic Aid,
p. 113 also cites this amount, citing the Ethiopian News Agency.
242. New York Times, October 11, 1971, cited in Copper, China’s Foreign Aid,
p. 114.
243. China Quarterly, “Chronicle and Documentation,” July–September 1972,
245. Bartke, China’s Economic Aid, p. 113. The author cites the arrival of a number
of survey and technical teams in 1972.
246. Ethiopia, which was in the process of expanding the private sector of its econ-
omy, was one of three important recipients of China’s aid at the time. See
Horvath, Chinese Technology Transfer to the Third World , p. 81.
247. “Communist States and Developing Countries: Aid and Trade in 1970,” U.S.
Department of State, September 22, 1971, cited in Copper, China’s Foreign
Aid, p. 148.
248. China Topics, March 1973, cited in Copper, China’s Foreign Aid, p. 149.
249. Bartke, China’s Economic Aid, p. 162. The author cites Xinhua on various dates.
251. Bujumbura Radio, February 20, 1973, cited in Copper, China’s Foreign Aid,
p. 148.
252. Bartke, China’s Economic Aid, p. 94. Burundi established diplomatic ties with
China in 1963, but subsequently broke off relations when their prime minister
was murdered. China may have seen the reestablishing relations as an apology
or admission of a mistake. China may also have been interested in Burundi since
it had not at this time received foreign aid from any Communist country.
253. Fogarty, “China’s Economic Relations with the Third World,” cited in Copper,
China’s Foreign Aid, p. 148. Bartke, China’s Economic Aid , puts the value of the
loan at $32 million.
255. “China’s Aid to Africa,” in Weinstein (ed.), Chinese and Soviet Aid to Africa
and Daily News (Tanzania), November 13, 1972, both cited in Copper, China’s
Foreign Aid, p. 148. Also see Bartke, China’s Economic Aid, p. 160. Bartke puts
the loan at $20 million.
Notes ● 219
256. China Topics, March 1973, and Current Scene, September 1971, cited in
Copper, China’s Foreign Aid, p. 148. Also see Bartke, China’s Economic Aid ,
p. 102; the author mentions two loans worth $20 million and $10 million in
1972 and 1973.
258. New York Times, April 15, 1973, cited in Copper, China’s Foreign Aid,
pp. 148–49.
259. Bartke, China’s Economic Aid , p. 150; Copper, China’s Foreign Aid, p. 149.
260. Logos Radio, November 5, 1973, cited in Copper, China’s Foreign Aid, p. 149;
Bartke, China’s Economic Aid , p. 110. Bartke cites a figure of $46 million.
262. Ibid. Dahomey was politically unstable at the time, which may have been seen
by Chinese decision makers as an opportunity. Dahomey was renamed Benin
in 1975.
263. China Topics, March 1973, cited in Copper, China’s Foreign Aid , p. 149. Also
see Bartke, China’s Economic Aid, p. 128. He puts the amount of the aid at
$12 million, citing Frankfurter Allgemeine Zeitung as his source but giving no
date.
265. Facts on File, 1974, cited in Copper, China’s Foreign Aid, p. 150.
266. Xinhua, September 15, 1973, cited in Copper, China’s Foreign Aid , p. 150.
Bartke, China’s Economic Aid , p. 194 puts the value of the aid at $10 million.
Horvath, Chinese Technology Transfer to the Third World , p. 50, puts the value
of the aid at $52 million, which includes a subsequent gift of food worth
$2 million.
267. Fogarty, “China’s Economic Relations with the Third World” and Xinhua,
September 15, 1973, both cited in Copper, China’s Foreign Aid, p. 150.
269. Copper, “China’s Aid in 1977,” pp. 19, 21, and 22.
270. Copper, China’s Foreign Aid in 1978, p. 26.
271. Ibid., p. 32.
272. See Copper, China’s Foreign Aid in 1978, p. 31.
273. Ibid., p. 27.
274. Ibid.
275. Copper, China’s Foreign Aid in 1979–80, pp. 20–21.
276. Ibid., p. 24.
277. Ibid., p. 25.
278. It needs to be noted that not included in China’s efforts to promote liberation
wars were efforts to overthrow foreign governments by clandestine means or
by instigating coups, etc. For both practical (mainly that the United States
and the Soviet Union were more capable in doing this and China could not
compete) and ideological reasons, China, as a general rule, did not do this. See
Peter VanNess, Revolution and Chinese Foreign Policy: Peking’s Support for Wars
of National Liberation (Berkeley: University of California Press, 1970), p. 7.
It has to be pointed out also that China supported wars of national liberation
220 ● Notes
anywhere in the Third World, not just in Africa. In terms of the money it
spent, China gave much more to Vietnam. On the other hand, in terms of the
number of such movements that China supported, the overwhelming majority
was in Africa.
279. Peter VanNess, Revolution and Chinese Foreign Policy (Berkeley: University of
California Press, 1971), pp. 112–13.
280. Gilks and Segal, China and the Arms Trade, pp. 53–54.
281. Communist Party documents in 1961 stated that the struggle between East
and West was centered on Africa, which had become the focus of contempo-
rary world problems. See The Chinese People Resolutely Support the Just Struggle
of the African People (Beijing: Foreign Languages Press, 1961).
283. Ibid. China supported such groups as the PAIGC in Guinea, FRELIMO
in Mozambique, the MPLA in Angola, and the CLSTP in Sao Tome and
Principe. China later aided the FNLA in Angola, the PAC in South Africa,
COREMO in Mozambique, and ZANU in Rhodesia.
284. Snow, The Star Raft, pp. 76–83.
285. See Copper, “China’s Military Assistance,” in Copper and Papp (eds.),
Communist Nations Military Assistance, p. 97.
286. VanNess, Revolution and Chinese Foreign Policy, p. 3.
287. Ibid.
288. Segal, “China and Africa,” p. 117.
289. See Hinton, Communist China in World Politics, pp. 162–63. This event
occurred in the context of a general debate in the Soviet Union and China
about the danger of war with the United States.
290. John Gittings, The World and China, 1922–1972 (New York: Harper and
Row, 1974), p. 233.
291. VanNess, Revolution and Chinese Foreign Policy, pp. 2–3.
292. Ibid., p. 28.
293. A. James Gregor, Marxism, China and Development: Reflections on Theory and
Reality (New Brunswick, NJ: Transaction Publishers, 1999), p. 128.
294. David Shinn, “Military and Security Relations: China, Africa and the Rest of
the World,” in Rotberg (ed.), China into Africa , p. 156.
295. “China’s Influence in Africa,” (Hearing before Subcommittee on Africa,
Global Human Rights and International Operations of the Committee of
International Relations House of Representatives) (Washington, DC: U.S.
Government Printing Office, 2005), p. 2.
296. He Wenping, “Moving Forward with the Tie: The Evolution of China’s
African Policy,” cited in Shinn, “Military and Security Relations,” in Rotberg
(ed.), China into Africa , p. 156.
297. G. W. Choudhury, China in World Affairs: The Foreign Policy of the PRC since
1970 (Boulder, CO: Westview Press, 1982), p. 273.
298. Ibid.
299. Ibid., p. 157.
300. Taylor, China in Africa, pp. 32–33.
Notes ● 221
301. Lawrance, China’s Foreign Relations since 1949, p. 153.

302. Arthur Waldron, “Foreword,” in Arthur Waldron (ed.), China in Africa
(Washington, DC: Jamestown Foundation, 2008), p. 5.
303. Gilks and Segal, China and the Arms Trade, p. 54.
304. Shinn, “Military and Security Relations,” in Rotberg (ed.), China into Africa,
p. 158.
306. Ibid.
307. Ibid., p. 55.
308. Ibid., p. 54.
309. U.S. Arms Control and Disarmament Agency, cited in Shinn, “Military and
Security Relations,” in Rotberg (ed.), China into Africa , p. 158.
310. Shinn, “Military and Security Relations,” in Rotberg (ed.), China into Africa,
p. 158.
311. Ibid.
312. Ibid., p. 159. The view that China’s arms aid is understated is my own based
on the value of some of its weapons and the fact the value of its weapons aid
was kept secret or undervalued elsewhere.
313. Daily Telegraph, September 3, 1964, cited in ibid., p. 40.
315. Ibid., 40–41.
317. Ibid., p. 40.
318. Ibid., p. 42.
320. “Communist Aid Activities in Non-Communist Less Developed Countries,”
Central Intelligence Agency, October 1980, p. 17; Copper, China’s Foreign
Aid, p. 23. The former reports China’s total aid to African countries during
the period 1954 to 1979 was $2.78 billion. Assuming the percent drawn was
similar to that elsewhere it would have been just over 50 percent. This writer
estimated that China provided around $1.5 billion in aid to its largest recipi-
ents in Africa up to 1974 and an amount between less than half and over two-
thirds was delivered.
321. Ibid., p. 18.
322. Ibid., pp. 16 and 22.
323. “Communist Aid Activities in Non-Communist Less Developed Countries,”
p. 13.
324. Dambisa Moyo, Dead Aid: How Aid Is Not Working and How There Is a Better
Way (New York: Farrar, Straus and Giroux, 2009), p. xix. Comparisons
between China’s aid to Africa and elsewhere are provided in the concluding
chapter of this volume.
325. Ibid., pp. 11–12.
326. Ibid., p. 12.
328. This is explained in large part by the cost of the Tan-Zam Railroad.
222 ● Notes
329. Garver, Foreign Relations of the People’s Republic of China, pp. 138–39.
330. In 1957, Kwame Nkrumah broke Ghana’s ties with Britain and soon estab-
lished a socialist state. Sekou Toure severed Guinea’s ties with France in 1958
and set up a Leninist state. France took revenge and tried to hurt Guinea eco-
nomically (just as the Soviet Union had done to China in 1960).China filled
the void. In 1960, Mali went in a similar direction.
331. Garver, Foreign Relations of the People’s Republic of China, pp. 139–40.
332. Charles Neuhauser, Third World Politics: China and the Afro-Asian People’s
Solidarity Organization, 1957–1967 (Cambridge, MA: Harvard University
Press, 1968). Also see Copper, China’s Foreign Aid, p. 16.
334. Snow, “China and Africa,” p. 292. The author explains this mainly in terms of
China seeking to stave off Soviet naval expansion in the area. He cites a Beijing
Review article of September 19, 1978, which states that, the “monstrous claws
of the Soviet Union must be chopped off wherever they stretch.”
335. Cooley, East Wind over Africa , p. 148.
336. Ibid.
337. Anna Louise Strong, an American writer who lived in China and maintained
close ties with Mao and the Chinese government, said this and it was pub-
lished in Mao’s Selected Works. See Cooley, East Wind over Africa , p. 213.
338. Brautigam, Chinese Aid and African Development, p. 44. During phase one,
only Swaziland and Malawi did not grant recognition to China, though a
number of African countries switched sides between China and Taiwan.
339. Ibid., pp. 45–46.
340. See Copper, China’s Foreign Aid, p. 85.
341. Gilks and Segal, “China and Africa,” p. 119.
342. Snow, The Star Raft, p. 303.
343. Camilleri, Chinese Foreign Policy, p. 100.
344. Cooley, East Wind over Africa , pp. 3–4.
345. See Brautigam, Chinese Aid and African Development, chapters 4, 5, and 6.
346. Ibid., pp. 34–35.
347. China’s trade with Africa and Middle Eastern countries increased nearly
20-fold from 1951 to 1965. See Klein, Politics versus Economics, p. 161.
348. Klein, Politics versus Economics, pp. 171–73. Also see Horvath, China’s
Technology Transfer to the Third World , p. 63. Horvath includes Egypt and
Zambia in the list of nations where China’s aid engendered trade; he does not
list Mali or Uganda.
349. Ibid., p. 173.
350. Brautigam, Chinese Aid and African Development, pp. 53–55.
352. Snow, “China and Africa,” p. 292.
353. Cooley, East Wind over Africa , p. 5.
354. Brautigam, “China’s Foreign Aid in Africa: What Do We Know?” in Rotberg
(ed.), China into Africa: Trade, Aid and Influence, p. 199.
Notes ● 223
355. Ibid., p. 198.

356. The two approaches were discussed during debates on foreign aid both before
and after Mao died.
357. China’s aid during phase two was much more successful in promoting trade
than during phase one because China was much more driven to buy natural
resources and market its products. Yet it can be argued that China’s aid during
the early period to some extent laid the groundwork. See Horvath, Chinese
Technology Transfer to the Third World , p. 72.
2 China’s Foreign Aid and Investment Diplomacy to

African Nations—II
1. See Ian Taylor, China and Africa: Engagement and Compromise (London:
Routledge, 2006), pp. 32–33, for an assessment of how the Cultural Revolution
affected China’s Africa policy. Taylor calls the Cultural Revolution a “disaster”
for China’s interests and influence in Africa.
2. All of China’s ambassadors to African countries were recalled except its ambas-
sador to Egypt. Tunisia broke off diplomatic relations with China in 1967 and
Kenya expelled China’s charge d’affaires. Other problems abounded. See ibid.
This is not to say, however, that China’s policies at this time engendered a
completely negative response. During the Cultural Revolution China’s policy
was to promote self-reliance in China and abroad. As it was practiced in rural
China and observed by African leaders it was in a number of cases adopted as
a model. See Deborah Brautigam, Chinese Aid and African Development (New
York: St. Martin’s Press, 1998), pp. 176–79.
3. See Robert G. Sutter, U.S.-Chinese Relations: Perilous Past, Pragmatic Present
(Lanham, MD: Rowman & Littlefield, 2010), chapter 4.
4. See James C. Hsiung, “New Strategic Environment and Domestic Linkages in
Peking’s Foreign Policy,” Issues and Studies, October 1988.
5. See Chris Alden, China in Africa (London: Zed Books, 2007), pp. 10–11;
Gerald Segal, “China and Africa,” Annals, January 1992. Segal notes that
China sought prosperity through greater integration with states of the global
market economy and this did not generally include African countries.
6. Sarah Raine, China’s African Challenges (London: International Institute
for Strategic Studies, 2009), p. 21. It is also noteworthy at this juncture that
African nations no longer sought aid to deal with domestic adversaries so
much, even though civil wars raged. They were no longer desperate for aid
even though they were poor. Good feelings remained toward China, but dis-
trust persisted as well. Africa also had something new to offer: markets, labor,
resources, and political support. See Arthur Waldron (ed.), China In Africa
(Washington, DC: Jamestown Foundation, 2008), pp. 6–7.
7. Ian Taylor, The International Relations of Sub-Saharan Africa (New York:
Continuum, 2010), p. 70.
8. Sutter, Chinese Foreign Relations, p. 311.
224 ● Notes
9. Alden, China in Africa, p. 9; Ian Taylor, “China’s Foreign Policy Towards Africa
in the 1990s, Journal of Modern African Studies, September 1998, pp. 443–60.
11. In 1986, some African students in China reacted to what they thought was
neglect and racism and began demonstrations. In 1988–89, there were “anti-
African” demonstrations in China. See Raine, China’s African Challenges,
pp. 21–22.
12. It is worth noting that China supported a larger number of aid projects in
Africa at this time than the United States (though the projects were much
smaller) and Chinese leaders did not usually admit to reducing aid to African
countries. See Ian Taylor, China’s New Role in Africa (Boulder, CO: Lynne
Rienner, 2009), p. 13.
14. Though China’s aid diminished markedly as will be documented in following
pages, its aid giving exceeded that of Japan and the United Kingdom. Also, at
that time China had more aid projects in Africa than the United States. See
Deborah Brautigam, Chinese Aid and African Development, p. 4 and Deborah
Brautigam, “China’s African Aid: Transatlantic Challenges,” (Report to the
German Marshall Fund of the United States), April 2008, p. 11, cited in Raine,
China’s African Challenges, p. 22. China also provided African countries with
$4.78 billion in aid up to 1987 and that figure accounted for 62 percent of
China’s official foreign aid (though as noted numerous times earlier its official
aid was but a small part of its total aid). See Wolfgang Bartke, The Agreements
of the People’s Republic of China with Foreign Countries, 1949–1990 (Munich,
Germany: Saur, 1992), p. 7.
15. Wei Liang, “New Africa Policy: China’s Quest for Oil and Influence,” in Sujian
Guo and Jean-Marc F. Blanchard (eds.), “Harmonious World” and China’s New
Foreign Policy (Lanham, MD: Lexington Books, 2008), p. 153.The author
argues that China continued to ignore Africa during most of the 1990s. The
change came, the author says, with China’s realization that it needed Africa’s
resources.
16. This was partly based on Chinese leaders’ realization of the country’s need to
import energy and raw materials. In 1993, China was no longer self-sufficient
in oil. There was a realization of its growing requirements of many other natu-
ral resources and that Africa was a place to obtain them. See Taylor, China’s
New Role in Africa, p. 15.
17. Li Anshan, “China’s New Policy toward Africa,” in Robert I. Rotberg (ed.),
China into Africa: Trade, Aid, and Influence (Washington, DC: Brookings,
2008), p. 23.
18. See Taylor, China and Africa, p. 53.
19. Yung-lo Lin, “Peking’s African Policy in the 1980s,” in David S. Chou (ed.),
Peking’s Foreign Policy in the 1980s (Taipei: Institute of International Relations,
1989), p. 369.
20. Reference is made here to China’s “independent” foreign policy announced in
1982.
Notes ● 225
21. Teh-chang Lin, “Peking’s African Policy in the 1980s,” Issues and Studies, July
1995. pp. 379–82.
22. Wang Shu, “The Road of Third World Development,” Beijing Review, May 8,
1989, p. 17.
23. Brautigam, Chinese Aid and African Development, p. 43.
24. See, for example, Gong Dafei, “China and Africa Are Fated Partners,” Beijing
Review, December 2, 1985, p. 15.
25. Taylor, “China’s Foreign Policy toward Africa in the 1990s,” p. 445.
26. Ibid.
27. Lin, “Peking’s African Policy in the 1980s,” p. 382.
28. Xinhua, August 7, 1989, cited in Taylor, The International Relations of Sub-
Saharan Africa, p. 70.
29. Xinhua, June 21, 1989, cited in ibid.
30. Segal, “China and Africa,” p. 123.
31. Ibid.
32. Chang Qing, “Chinese Foreign Minister Tours Africa,” Beijing Review, August
28, 1989, p. 14.
33. Cheng Ming, October 10, 1969, cited in Taylor, “China’s Foreign Policy toward
Africa in the 1990s,” p. 447.
34. Article in Cheng Ming, October 10, 1989, cited in Taylor, China and Africa, p. 4.
35. Allen Whiting, “Chinese Foreign Policy Futures,” in David Lampton and
A. Wilhelm (eds.), United States and China Relations at a Crossroads (Lanham,
MD: University Press of America, 1995), p. 59.
36. Dambisa Moyo, Dead Aid: Why Aid Is Not Working and How There Is a Better
Way for Africa (New York: Farrar, Straus and Giroux, 2009), pp. 24–25.
37. Deborah Brautigam, The Dragon’s Gift: The Real Story of China in Africa
(New York: Oxford University Press, 2009), pp. 83–85.
38. Raine, China’s African Challenges, p. 23.
39. Alden, China in Africa, p. 15.
40. See Nicolas Cook, “Sub-Saharan Africa,” in China’s Foreign Policy and “Soft
Power” in South America, Asia, and Africa (Rochester, NY: Scholar’s Choice,
2015), p. 108. This study was prepared for the Committee on Foreign Relations
of the U.S. Senate.
41. People’s Daily, October 10, 2000, cited in Taylor, China and Africa, p. 4.
42. Xu Weizhong, “Sino-African Relations: New Transformations and Challenges,”
in Dorothy-Grace Guerrero and Firoze Manji (eds.), China’s New Role in Africa
and the South (Nairobi: Fahamu, 2008), p. 68.
43. Cook, “Sub-Saharan Africa,” p. 108.
44. Raine, China’s African Challenges, p. 24. The “six pillars” were principles to
govern China’s relations with African countries. The “three principles” drew
from Zhou Enlai’s Five Principles stated earlier but emphasized calling on the
international community to pay more attention to Africa and to promote a
fairer environment in aiding development.
45. “China’s African Policy,” Ministry of Foreign Affairs of the People’s Republic of
China, January 2006 (online at www.fmprc.gov.cn/eng/zxxx/t230615.htm).
226 ● Notes
46. Ibid.
47. Speech made at the Beijing summit on the Forum on China-Africa Cooperation
in October 2006 (online at English.focasumit.org).
49. Ibid.
50. Ibid.
51. Ibid.
52. “Xi Jinping Visits Four Asian and African Countries 2010,” Forum on China-
Africa Cooperation, November 10, 2010 (online at focac.org).
53. Yu Sun, “Xi Jinping’s Africa Policy: The First Year,” Africa in Focus (Bookings),
April 14, 2014 (online at brookings.edu).
54. In 1981, The Institute of West Asian and African Studies in Beijing pub-
lished a study that compared in unfavorable terms the socialist regimes in
Tanzania and Guinea with free-market economies in Kenya and the Ivory
Coast. See Philip Snow, The Star Raft: China’s Encounter with Africa (London:
Weidenfeld and Nicolson, 1988), p. 303. The author cites an article in Africa
Survey, but does not provide a date.
55. Li Anshan, “China’s New Policy toward Africa,” p. 26.
56. Philip Snow, “China and Africa: Consensus and Camouflage,” in Thomas
W. Robinson and David Shambaugh (eds.), Chinese Foreign Policy: Theory
and Practice (Oxford: Clarendon Press, 1994), p. 306. The author cites MTM
March 31, 1989.
57. This also meant China’s “investments.” Brautigam, Chinese Aid and African
Development, p. 47. China’s investments were also small. According to Chinese
data, China invested but $20 million in Africa in 1975. See Moyo, Dead Aid,
p. 103.
58. Li Anshan, “China’s New Policy toward Africa,” pp. 25–26.
59. Snow, “China and Africa: Consensus and Camouflage,” p. 306.
60. See Lin, “Peking’s African Policy in the 1980s,” p. 371.
61. Segal, “China and Africa,” p. 122. The author notes that instead China gave
very small loans such as a “tiny one” to the Central African Republic in
1990, a pledge to build a people’s palace in Chad, disaster relief to Algeria
for 1 million Yuan, and $30,000 to Ethiopia for medicine and medical
equipment.
62. From 1971, when China and Nigeria established diplomatic relations, to 1987,
China had provided Nigeria with only $27.6 million in aid. Marches tropicau
et mediterraneens (Paris), March 31, 1989, cited in Snow, “China and Africa:
Consensus and Camouflage,” p. 292.
63. Segal, “China and Africa,” pp. 121–22.
64. Brautigam, The Dragon’s Gift, p. 46. It is worth noting that China also
observed that foreign investments in Africa were profitable for Japan as well as
the United States and the United Kingdom See Moyo, Dead Aid, p. 102.
65. “Bu Ming on Banking Contacts Abroad,” Xinhua, February 6, 1980, cited in
ibid., p. 48.
Notes ● 227
66. Brautigam, The Dragon’s Gift, p. 52. The author states that the Central
Committee of the Chinese Communist Party and the State Council (govern-
ment) both registered this view.
67. Ibid., p. 53.
68. “The Brief Survey Report on the Rehabilitation of Production of the Barrake
Cane and Sugar Complex,” Ministry of Agriculture (from the Liberia Sugar
Company files), cited in Brautigam, The Dragon’s Gift, p. 55.
69. Ibid., pp. 62–63.
71. Ibid., pp. 64–65. China followed the Japanese and Western aid model in doing
this. It made many aid projects profitable and employed Chinese technicians
and workers.
72. Brautigam, The Dragon’s Gift, p. 57.
73. Ibid.
74. Ibid., p. 58. The author notes that aid projects fail due to the fact that sole
control and responsibility for their working is given to the local government
when they are finished.
75. Ibid.
76. Ibid., p. 55.
77. Liu Haifang, “China’s Development Cooperation with Africa: Historical and
Cultural Perspectives,” in Fantu Cheru and Cyril Obi (eds.), The Rise of China
and India in Africa (London: Zed Books, 2010), p. 56.
78. The Aid Program of China (Paris: OECD, March 1987), p. 8. Not counted,
however, were debt relief, medical aid, and scholarships.
81. Ibid., pp. 182–83.
82. Speech by Liu Guijin titled “China Africa Relations: Equality, Cooperation
and Mutual Development,” November 15, 2004, cited in Joshua Eisenman,
“China’s Post–Cold War Strategy in Africa: Examining Beijing’s Methods
and Objectives,” in Joshua Eisenman, Eric Heginbotham, and Derek Mitchell
(eds.), China and the Developing World: Beijing’s Strategy for the Twenty-First
Century (Armonk, NY: M. E. Sharpe, 2007), p. 45.
83. Lin, “Beijing’s Foreign Aid Policy in the 1990s,” p. 38.
84. Liu, “China’s Development Cooperation with Africa,” p. 58.
85. Ibid.
86. Craig S. Smith, “World Business Briefing: Asia; China Forgives Some African
Debt, New York Times, October 12, 2000 (cited Joshua Eisenman, “China’s
Post-Cold War Strategy in Africa, p. 47).
87. “China Grants 750 Million U.S. Dollar Debt Relief to Africa,” People’s Daily,
September 6, 2003, cited in ibid.
88. Ibid.
89. Moyo, Dead Aid, pp. 104–5.
90. Brautigam, “China’s African Aid: Transatlantic Challenges,” p. 13.
228 ● Notes
91. “China’s Eight-Measure Economic Policy on Africa Well-Implemented,”

Xinhua, January 20, 2009, cited in Raine, China’s African Challenges, p. 27.
93. Sheng Ding, The Dragon’s Hidden Wings: How China Rises with Its Soft Power
(Lanham, MD: Lexington Books, 2008), pp. 140–41.
94. Drew Thompson, “Economic Growth and Soft Power: China’s Africa
Strategy,” in Waldron (ed.), China in Africa , p. 20. Another author called it an
“inauguration ceremony for China’s twenty-first-century march into Africa.”
See Stefan Halper, The Beijing Consensus: How China’s Authoritarian Model
Will Dominate the Twenty-First Century (New York: Basic Books, 2010),
p. 112.
95. The meeting was held in Beijing in October. More than 80 ministers from
China and 44 African countries attended. The two major issues discussed
at this meeting were: how to establish a new international political and eco-
nomic order for the twenty-first century and how to strengthen Sino-African
economic cooperation and trade under new global conditions. See Liu Guijin,
“All-Weather Friends in Need and in Deed: China-African Relations Seen
from the Eyes of a Chinese Diplomat,” in Marcel Kitissou (ed.), Africa in
China’s Global Strategy (London: Adonis and Abbey, 2007), p. 79.
96. Liu, “All-Weather Friends in Need and in Deed,” p. 79.
97. Ibid., p. 80.
99. Ibid.
100. David H. Shinn and Joshua Eisenman, China and Africa: A Century of
Engagement (Philadelphia: University of Pennsylvania Press, 2012), p. 68.
101. See Cook, “Sub-Saharan Africa,” p. 111.
102. Thompson, “Economic Growth and Soft Power: China’s Africa Strategy,”
p. 27.
103. Drew Thompson, “China’s Soft Power in Africa: From the ‘Beijing Consensus’
to Health Diplomacy,” China Brief, December 31, 1969 (online at jamestown.
org).
104. Liu Guijin, “All-Weather Friends in need and in Deed,” p. 82.
106. Ibid.
107. Ibid.
108. Ibid., p. 110.
110. Ibid., p. 2.
111. Fantu Cheru and Cyril Obi, “Introduction—Africa in the Twenty-First
Century: Strategic and Development Challenges,” in Cheru and Obi (eds.),
The Rise of China and India in Africa, p. 5.
112. Tracy McVeigh, “Beijing Pledges Aid Billions to Woo Africa,” Observer,
November 5, 2006 (online at guardian.co.uk). Bloomberg cited China’s entire
largesse as aid.
Notes ● 229
113. See Brautigam, “China’s Foreign Aid in Africa,” p. 208. The author cites
several writers including Danna Harman, “China Takes Up Civic Work in
Africa, Christian Science Monitor, June 27, 2007, p. 1.
114. Obi, “African Oil in the Energy Security Calculations of China and India,” in
Cheru and Obi (eds.), The Rise of China and India in Africa , p. 186.
115. Shjalmali Guttal, “Client and Competitor: China and International Financial
Institutions,” in Dorothy-Grace Guerrero and Firoze Manji (eds.), China’s
New Role in Africa and the South: A Search for a New Perspective (Oxford:
Fahuma Books, 2008), p. 17.
116. Li, “China’s New Policy toward Africa,” p. 33.
118. See the Fund’s webpage at www.cadfund.com/en/Column.asp?Columnid=13.
119. SWF Newsletter, no date cited (online at swfinstitute.org/fund/cad.phjp).
This newsletter is published by the SWF Institute.
120. Ibid.
121. Muhammad Yamany and Zhang Lin, “4th Ministerial Conference of FOCA
concludes in Egypt,” China View, November 10, 2009 (online at news.xinhua-
net.com/English/2009–11–10/contentg_124204444.htm).
122. “Forum on China-Africa Cooperation Sharm El Sheikh Action Plan,” Forum
on China-Africa Cooperation, November 12, 2009 (online at focac.org/eng
/dujvbzjhy/hywj/t66387.htm).
123. Zhang Zhongxiang, “A Win-Win Forum,” Beijing Review, October 28, 2010,
pp. 12–13.
124. “China-Africa Forum to Adopt Declaration,” CCTV, July 20, 2012 (online at
english.cntv.cn).
125. “China, African Countries Pledge to Implement Beijing Action Plan,” Xinhua,
July 20, 2012 (online at xinhua.com.cn).
126. David Shambaugh, China Goes Global: The Partial Power (New York: Oxford
University Press, 2013), p. 109.
127. Special Economic Zones were first proposed in China in 1978 and were
set up in 1979. They were modeled on Taiwan’s Export Processing Zones
(EPZ) established there in 1965 and which were an important component
of Taiwan’s economic miracle. They offered the advantage of promoting free
markets and free trade (within the zone) without shocking the nation’s entire
economy or requiring lowering protectionist bars elsewhere. Laws and regu-
lations within the zones were different: taxes were lower and regulations were
streamlined. In many cases there were no tariffs. Foreign enterprises found
these points very attractive and thus put some of their businesses, especially
manufacturing operations, in the zones. For China they served as a model
for capitalist reform in the rest of the country and were very successful in
fostering economic growth. For further details see, Barry Naughton, The
Chinese Economy: Transitions and Growth (Cambridge: MIT Press, 2007),
pp. 406–7.
230 ● Notes
129. “Chinese Investments in Special Economic Zones in Africa: Progress,

Challenges and Lessons Learned,” The World Bank, January 2011, p. 2.
130. Ibid., p. 170.
131. Africa was not the only place where China supported constructing economic
zones. In fact, the Chinese government in 2006 mentioned supporting as many
as 50 of them. As of 2010 19 had been approved, 5 in sub-Saharan Africa.
Africa seemed an ideal place to establish industrial zones or economic zones as
African companies were less competitive than those in other parts of the world,
due to lack of favorable business policies, weak infrastructure, and, in general,
a poor economic/business environment. See The Africa Competitiveness Report
2009 (Geneva: World Economic Forum, 2009).
132. Loro Horta, “China Building Africa’s Economic Infrastructure: SEZs and
Railroads,” China Brief, July 22, 2010 (online at jamestown.org).
133. Martin J. Davies, “Special Economic Zones: China’s Developmental Model
Comes to Africa,” in Rotberg (ed.), China into Africa , pp. 140–41.
135. Deborah Brautigam and Tang Xiaoyang, “African Shenzhen: China’s Special
Economic Zones in Africa,” Modern African Studies, Vol. 1 2011, pp. 30. It
should be noted that the authors use a different definition of Africa here than
that used elsewhere in this book.
136. Taylor, China and Africa , pp. 171–72. The author calls the bridge the larg-
est one made by Chinese technicians, probably meaning that the number
of Chinese technical staff helping build the project was more than on any
other.
137. Ibid., p. 172.
138. Ibid.
139. Ibid.
140. Xinhua, July 23 and 24, 1990, cited in ibid., pp. 175–76.
141. Ibid., p. 178.
144. Ibid., p. 172.
146. “China Launches Economic Zone in Zambia,” UPI, February 5, 2007 (online
at upi.com). There was also to be another zone or a “sub-zone” of this one that
focused on producing garments, appliances, and electronics.
147. As noted in the previous chapter, China financed copper mining in Zambia
much earlier. According to Brautigam and Tang, China started planning this
zone in 2003.
148. Davies, “Special Economic Zones,” in Rotberg (ed.) China into Africa,
p. 144.
149. “Zambia: China Move Elates Mwanawasa,” Times of Zambia, February 6,
2007 (online at allafrica.com).
150. Zambian Minister Sees Bright Future of Zambia-China Economic Zone,”
People’s Daily Online, November 6, 2009 (online at English.people.com.cn).
Notes ● 231
151. “China, Zambia Sign Mining Economic Zone Pacts,” AFP, February 25, 2010
(online at terradaily.com).
153. Ibid.
154. Ibid.
156. “China, Zambia Sign Mining Economic Zone Pacts.”
157. Ibid.
158. Shin and Eisenman, China and Africa, p. 137.
159. “China, Zambia Sign Mining Economic Zone Pacts.”
162. Copper, China’s Foreign Aid, p. 58 and pp. 148–49.
163. China’s previous lack of interest in Nigeria is explained in part by the fact that
China’s focus in Africa was on Southern Africa, the East African littoral, and
the western Indian Ocean. See Snow, “China and Africa,” in Robinson and
Shambaugh (eds.), Chinese Foreign Policy, p. 292. However, Nigeria was con-
sidered an unstable country and many foreign companies pulled out. China
was willing to take a bigger risk.
164. Ndubisi Obiorah, Darren Kew, and Yusuf Tanko, “‘Peaceful Rise’ and Human
Rights: China’s Expanding Relations with Nigeria,” in Rotberg (ed.), China
into Africa , p. 275.
165. Ibid.
166. Ibid., p. 276.
167. “Special Economic Zones in Nigeria,” BusinessDay, January 11, 2013.
168. Deborah Brautigam, Thomas Farole, and Tang Xiaoyang, “China’s Investment
in African Special Economic Zones: Prospects, Challenges, and Opportunities,”
Economic Premise (The World Bank), March 2010, p. 2.
169. Ibid., p. 148.
170. “Special Economic Zones in Nigeria.”
171. Ibid.
172. “Chinese Investments in Special Economic Zones in Africa,” p. 9.
174. Ibid., p. 273.
175. Horta, “China Building Africa’s Economic Infrastructure.”
176. Ibid.
177. Ding Qingfen, “Ethiopia Seeks More Investment,” China Daily, May 5, 2011
(online at chinadaily.com).
178. Ibid.
179. William Davison, “Huajian of China’s Ethiopian Export Zone May Generate
$4 Billion,” Bloomberg, May 22, 2012 (online at bloomberg.com).
180. Shinn and Eisenman, China and Africa , pp. 274–75.
181. Ibid., pp. 272–73.
182. Davies, “Special Economic Zones,” in Rotberg (ed.), China into Africa,
pp. 146–47.
232 ● Notes
183. Ibid.
184. Tom Minney, “Tanzania’s $10 Billion China-Funded Port Will Start in 2015,”
African Capital Market News, October 30, 2014 (online at africancapitalmar-
ketnews.com).
185. Fumbuka Ng’wanakilala, “Tanzania Says Construction of China-Funded Port
to Start in 2015,” Reuters, October 27, 2014 (online at reuters.com).
186. Minney, “Tanzania’s $10 Billion China-Funded Port Will Start in 2015.”
187. Brautigam and Tang, “African Shenzhen: China’s Special Economic Zones in
Africa,” p. 33. The authors cite the World Bank’s “Doing Business” surveys.
188. John Ghazvinian, Untapped: The Scramble for Africa’s Oil (Orlando, FL:
Harvest Books, 2007), pp. 9–11. In 1996, China’s president Jiang Zemin said
this. See also Alden, China in Africa, p. 15.
189. Ghazvinian, Untapped, pp. 106–08.
191. Obi, “African Oil in the Energy Security Calculations of China and India,”
p. 183.
192. Zhao Hong, “China’s Energy Relations with Africa,” in Manochehr Dorraj
and Carrie Liu Currier (eds.) China’s Energy Relations with the Developing
World (New York: Bloomsbury Academic, 2011), p. 106.
193. Ibid. This is the growth rate up to 2007.
194. Ibid.
196. Ibid.
197. Ibid., p. 89. The author cites a Xinhua piece of August 3, 1992.
198. Ibid., p. 90. The author mentions one interest-free loan for 6.3 million was
announced in 2005 when China’s vice premier Zeng Peiyang visited Angola
that year.
199. “Angola: Drivers of Change, Position Paper One: Economic Change and
Reform,” Chatham House, April 2005.
200. Vivien Foster, William Butterfield, Chuan Chen, and Nataliya Pushak,
Building Bridges: China’s Growing Role as an Infrastructure Financier for Sub-
Saharan Africa (Washington, DC: The World Bank, 2009), p. 27.
201. Ibid.
202. Taylor, China and Africa , p. 90; Brautigam, The Dragon’s Gift, pp. 274–75.
204. Ibid., p. 275.
205. Renato Aguilar and Andrea Goldstein, “The Asian Drivers and Angola,”
OECD Development Center (Draft Paper-2007), p. 13.
206. Benoit France, “China Makes Headway in Angola with Multiple Trade Ties,”
Dow Jones International News, November 30, 2006, cited in Zhao, “China’s
Energy Relations with Africa,” p. 110.
207. Foster et al., Building Bridges, p. 49. The authors put the loan at $2.4 billion.
209. “Angola: Head of State Analyses Bilateral Cooperation with China Eximbank
Chief,” Angola Press Agency, September 28, 2007.
Notes ● 233
210. Alex Vines and Indira Campos, “China and India in Angola,” in Cheru and
Obi (eds.), The Rise of China and India in Africa, p. 194. Also see “China Lends
Angola $15 bn but Creates Few Jobs,” Agence France-Press, March 9, 2011,
cited in Juan Pablo Cardenal and Heriberto Araujo, China’s Silent Army: The
Pioneers, Traders, Fixers and Workers Who Are Remaking the World in Beijing’s
Image (New York: Crown, 2014), p. 306.
211. Cardenal and Araujo, China’s Silent Army, p. 122.
212. Vines and Campos, “China and India in Angola,” p. 194.
213. Henry Lee and Dan Shalmon, “Searching for Oil: China’s Oil Strategies in
Africa,” in Rotberg (ed.), China and Africa, pp. 124–25.
214. Cardenal and Araujo, China’s Silent Army, pp. 126–27.
215. According to a report made by then IMF in 2012, $32 billion in public funds
vanished. See “Angola: Government Denies US$32 Billion Missing from
Public Funds,” All Africa, January 18, 2012 (online at allAfrica.com).
216. “Angola,” Economist Intelligence Unit, February 14, 2015 (online at country.
eiu/.com/angola). Angola has been growing at a rate considerably above the
world’s average in the past few years and is projected to grow at 5.9 percent for
the next four years.
217. J. Millard Burr and Robert O. Collins, Revolutionary Sudan: Hasan al-Turabi
and the Islamist State, 1989–2000 (Leiden: Brill, 2003), p. 246.
218. Janes Defense Weekly, July 3, 1996, cited in ibid., p. 247. Interestingly, the
World Bank reported that the Chinese weapons were paid for by Iran.
219. Michael Winchester, “Inside Story: China, Beijing vs. Islam,” Asiaweek,
October 24, 1997, cited in ibid.
220. Ibid.
221. Ibid., p. 248. Again it was reported that Iran paid for the weapons.
222. Nhial Bol, “Foreign Firms Go for Gold,” IPS, Khartoum, May 29, 1995, cited
in ibid., p. 249.
223. Ibid., pp. 251–52.
224. Henry Lee and Dan Shalmon, “Searching for Oil: China’s Oil Strategies in
Africa,” in Rotberg (ed.), China into Africa , pp. 125–26.
225. Moran, China’s Strategy to Secure Natural Resources, p. 12.
226. See Yitzhak Shichor, “Sudan: Neo-Colonialism with Chinese Characteristics,”
in Waldron (ed.), China in Africa, pp. 127.
227. Moran, China’s Strategy to Secure Natural Resources, pp. 12–13.
228. Robert I. Rotberg, “China’s Quest for Resources, Opportunities and Influence
in Africa,” in Rotberg (ed.), China into Africa, p. 5.
229. Lee and Shalmon, “Searching for Oil: China’s Oil Strategies in Africa,” in
Rotberg (ed.), China into Africa, p. 125.
230. See Shichor, “Sudan: Neo-Colonialism with Chinese Characteristics,”
pp. 124–44.
231. Ibid., p. 125.
232. Moyo, Dead Aid , p. 105.
233. China Statistical Yearbook (various years), cited in Shichor, “Sudan: Neo-
Colonialism with Chinese Characteristics,” p. 126.
234 ● Notes
234. Sebastian Mallaby, “A Palace for Sudan,” Washington Post, February 5, 2007,
p. A15.
235. “Chinese President Tells Sudan Counterpart to Give UN Bigger Role in
Resolving Darfur Conflict,” International Herald Tribune, February 2, 2007,
cited in “China in Sudan” “Having It Both Ways,” Save Darfur, October 18,
2007, p. 1.
236. “Humanitarian Aid from China Leaves for Sudan’s Darfur,” People’s Daily
Online, August 16, 2007 (online at English.peopledaily.com.cn/90776/624546.
html).
238. This was reported in Amnesty International’s Maya 2007 report, cited in
Shichor, “Sudan: Neo-Colonialism with Chinese Characteristics,” p. 124.
239. Ibid.
240. Ibid., p. 132. The author cites the Stockholm International Peace Research
Institute’s (SIPRI) Arms Transfer Database (online at armstrade.sipri.org).
241. Elizabeth Economy and Michael Levi, By All Means Necessary: How China’s
Resource Quest Is Changing the World (New York: Oxford University Press,
2014), p. 182.
242. He Wenping, “The Darfur Issue: A New Test for China’s Africa Policy,” in
Cheru and Obi (eds.). The Rise of China and India in Africa , pp. 157–59.
243. Ibid., p. 158.
244. Ibid., p. 159.
245. Shichor, “Sudan: Neo-Colonialism with Chinese Characteristics,” p. 140. The
author cites a Xinhua broadcast of January 11, 2007.
246. Ibid.
247. Kwesi Aning, “China and Africa: Toward a New Security Relationship,” in
Cheru and Obi (eds.), The Rise of China and Africa in Africa, p. 1; Shinn and
Eisenman, China and Africa, p. 185.
248. Taylor, The International Relations of Sub-Saharan Africa , pp. 74 and 82.
249. One exception is a deal China made in 2008 with the government of the
Congo to build infrastructure of various kinds in return for access to cop-
per and cobalt. The deal was worth more than $6 billion. See Cardenal and
Araujo, China’s Silent Army, p. 97 and pp. 292–93.
251. See David Zweig and Bi Jianhai, “China’s Global Hunt for Energy,” Foreign
Affairs, September-October 2005, p. 31.
252. Ibid.
253. Shinn and Eisenman, China and Africa , pp. 152–53.
254. Howard W. French, China’s Second Continent: How a Million Immigrants Are
Building a New Empire in Africa (New York: Knopf, 2014), p. 5.
255. The reason for this is that because of its geography China has long had a
serious problem with water control and the fact much of China’s arable land
is low and close to two large rivers, the Yellow River and the Yangtze River,
that often flood. Also North China was not self-sufficient in food and had
to transport rice and other food products by roads and canals from South
China.
Notes ● 235
256. One African specialist stated that a diplomat told him that China could build
a railroad before the World Bank could do a cost-benefit analysis.” See Taylor,
China’s New Role in Africa , p. 22.
257. David E. Brown, Hidden Dragon, Crouching Lion: How China’s Advance in
Africa Is Underestimated and Africa’s Potential Underappreciated (Carlisle, PA:
Strategic Studies Institute of the Army War College, 2012), p. 44. The author
cites a World Bank study.
258. Lucy Corkin, “China’s Strategic Infrastructural Investments in Africa,” in
Dorothy-Grace Guerrero and Firoze Manji (eds.), China’s New Role in Africa
and the South: A Search for a New Perspective (Cape Town: Fahamu, 2009),
pp. 140–43.
259. Ibid., p. xii.
260. Foster et al., Building Bridges, p. xi.
261. Ibid., p. iii.
262. Ibid., p. 21.
263. Randall Hackley and Lauren van der Westhuizen, “Africa’s Friend China
Finances $9.3 Billion of Hydropower,” Bloomberg, September 9, 2011 (online
at bloomberg.com).
264. Ibid.
265. Shai Oster, “China: New Dam Builder for the World,” Wall Street Journal,
December 28, 2007 (online at wsj.com); “Three Gorges Dam Builder to
Tackle Nigeria’s Largest Hydropower Station,” Xinhua, April 3, 2007 (online
at china.org.cn).
266. See Peter Bosshard, “China’s Dam-Building Will Cause More Problems Than
It Solves,” Guardian, March 4, 2011 (online at guardian.co.uk).
267. For examples, see “Chinese Dams in Africa,” International Rivers, No date
cited; viewed in September 2011 (online at http://www.internationalrivers.org
/africa/chinese-dams-africa).
268. “The multi-purpose dam, to be built by two Chinese companies and a local
firm, will be capable of generating 381 megawatts of electricity,” World
Bulletin, 2014 (online at worldbulletin.net).
269. Tom Burgis, “Interactive Map—China’s Dams in Africa,” Financial Times,
August 8, 2014 (online at ft.com).
270. Corkin, “China’s Strategic Infrastructural Investments in Africa,” p. 139. The
project was finished in early 2015 and became the longest that China had worked
on. See Lai Hsiang-ru, “CRCC-Built Benguela Railway in Angola Inaugurated,”
Want China Times, February 18, 2015 (online at wantchinatimes.com).
271. Ibid.
272. Foster et al., Building Bridges, p. 23.
273. Aning, “China and Africa,” in Cheru and Obi (eds.), The Rise of China and
Africa in Africa , p. 150.
274. Douglas DeGroot, “China Counters Murderous British World Empire Policy,”
Executive Intelligence Review, May 16, 2014 (online at larouchepub.com).
275. Ibid.
276. Hou Liqiang and Zhao Lei, “China Aids Building Railway in Africa,” China
Daily, January 12, 2015 (online at chinadaily.com.cn).
236 ● Notes
277. Christian Science Monitor, December 12, 1982, cited in Taylor, China and
Africa, p. 62.
278. China Daily, April 3, 1989, cited in Taylor, China and Africa, p. 62.
279. Xinhua, August 29, 1980, cited in Law, Chinese Foreign Aid, p. 312.
280. Xinhua, August 1, 1986, cited in Taylor, China and Africa, p. 61.
282 . “Tanzania-Zambia Railway Revives,” Beijing Review, March 9, 1987,
p. 28.
283. See Davis, “Special Economic Zones: China’s Developmental Model Comes
to Africa,” in Rotberg (ed.), China into Africa, p. 147, and Thomas C. Reed
and Danny B. Stillman, The Nuclear Express (Minneapolis, MN: Zenith Press,
2009), p. 309.
285. “Save the ‘Uhura Railroad’ from Collapse,” This Day, October 29, 2008, cited
in Wikipedia.
287. Lusaka Times, January 2010, and Southern Times, June 2010, cited in
Wikipedia.
288. Amyl Fallon, “Throwing the Tanzania-Zambia Railway a Lifeline,” IPS,
December 11, 2013 (online at ips.com).
289. Martyn J. Davies, “Special Economic Zones: China’s Development Model
Comes to Africa,” in Rotberg (ed.), China into Africa , pp. 147–51.
291. Ibid.
292. Corkin, “China’s Strategic Infrastructural Investments in Africa,” in Guerrero
and Manji (ed.), China’s New Role in Africa and the South, p. 137.
294. Ibid., p. 25.
295. This is not to ignore the fact that China has serious environmental prob-
lems and has received a large amount of aid from international organizations
to resolve these problems. China was not a large recipient of such funds in
the 1980s, but was the world’s largest recipient in the 1990s obtaining more
than $10 billion from 1995 to 1999. See Robert L. Hicks, Bradley C. Parks,
J. Timmons Roberts, and Michael J. Tierney, Greening Aid? Understanding the
Environmental Impact of Development Assistance (New York: Oxford University
Press, 2008), p. 248.
296. This is discussed in Volume 3, Chapter 1. See also Brautigam, China’s Aid and
African Development.
297. “China’s ‘Green Aid’ Offers Lessons for the World,” Worldwatch, April 29,
2011 (online at worldwatch.org).
298. Hackley and Van Der Westthuizen, “Africa’s China Friend Finances $9.3
Billion of Hydropower.”
299. “Kenya and China Team Up to Build Nuclear Power Plants,” Want China
Times, September 9, 2015 (online at wantchinatimes.com.tw).
300. Ibid., p. 199.
Notes ● 237
301. Brautigam, The Dragon’s Gift, p. 170. Broadly defining foreign aid will be
discussed further below.
302. Brautigam, “China’s Foreign Aid in Africa,” in Rotberg (ed.), China into
Africa, p. 198. This happened in the mid-1970s, although China’s total aid
giving at the time was low.
303. Moyo, Dead Aid, pp. 104–5. The author also cites $60 billion in “trade deals”
to substantiate these figures.
304. Alex Vines and Indira Campos, “China and India in Angola,” p. 194. Also
see “China Lends Angola $15 bn but Creates Few Jobs,” Agence France-Press,
March 9, 2011, cited in Cardenal and Araujo, China’s Silent Army, p. 306. Also
see “Tracking the Land of the Dragon’s Billions in Africa,” Daily Monitor,
May 4, 2013 (found online at china.aiddata.org).
305. The positive views of African leaders have been mentioned earlier. For a recent
statement, see “Report Speaks about Advantages of China’s Aid to Africa,”
China Daily, May 14, 2013 (online at chinadaily.com.cn).
306. This information can be found on the organization’s website: china.aiddata.
org. It was also confirmed in the Chinese media, indicating that the Chinese
government did not mind this reporting and may have at least tacitly agreed
with the numbers. See Joseph Boris, “US Researchers Aim to Shed Light on
Africa Aid,” China Daily, May 9, 2013 (online at chinadaily.com.cn).
307. For details on methodology, see Austin M. Strange, Bfian O’Donnell, Daniel
Gamboa, and Bradley Parks, “AidData’s Media-Based Data Collection
Methodology,” AidData, April 2013 (online at china.aiddaa.org).
308. Ekow Quandzie, “China Aid to Africa Totals $75b in One Decade—Report,”
Business News, May 7, 2013 (online at ghanabusinessnews.com).
309. “Tracking the Land of the Dragon’s Billions in Africa,” Daily Monitor, May 4,
2013 (found online at china.aiddata.org).
310. “China Can Do More for Africa,” Daily Monitor, May 2, 2013 (found online
at china.aiddata.org).
311. The term “debt relief” includes both rescheduling debt and cancelling or for-
giving it. At first China preferred the former but in many cases rescheduling
was done multiple times and then written off. See ibid., p. 128.
312. Taylor, The International Relations of Sub-Saharan Africa , p. 74.
314. Guoqian Qi, “China’s Foreign Aid: Policies, Structures, Practice and Trends”
(paper presented at Conference on New Directions on Development Assistance
at Oxford University June 11–12, 2007, cited in Deborah Brautigam, “China,
Africa and the International Aid Architecture” (working paper presented on
March 2010) (online at www.american.edu/sis/faculty/upload/Rev-working
-paperr-China-aid-architecture).
315. This issue will be discussed in greater detail in the concluding chapter of this
volume.
316. However, having said this China’s recent investments in Africa have generated
higher rates of returns than its investments in other regions of the world. See
Brown, Hidden Dragon, Crouching Lion , p. 30.
238 ● Notes
317. Ibid., p. 17.

318. Ibid.
319. Deborah Brautigam, “U.S. and Chinese Efforts in Africa in Global Health and
Foreign Aid,” Center for Strategic and International Studies,” November 2011.
The author states that recipients are requested to source at least half of their
procurements from Chinese firms. But this is not unusual. The Development
Assistance Committee of OECD recommends untying aid. Yet Italy’s aid is
92 percent tied and Canada’s is 68 percent. See “Untying Aid to the Least
Developed Countries,” OECD, 2011.
320. China’s desire to expand its influence globally and in that way become a big
power will be discussed further in the concluding chapter.
321. “Infrastructure Finance,” African Development Bank Group (no date given)
(online at afdb.org).
322. “IMF Conference Highlights Central Africa’s Investment Needs in Infrastruc-
ture,” International Monetary Fund, March 13, 2014 (online at imf.org).
323. “China in Africa,” IDE-Jetro, no date given (online at ide-go.jp) (observed in
March 2013).
325. See “China’s Global Role in Dam Building,” International Rivers (no date given)
(online at internationalrivers.com). This source cites 330 dams Chinese banks
and companies are “involved in” in 74 countries, “particularly in Africa.”
326. Segal, “China and Africa,” pp. 120–21.
327. Brautigam et al., “China’s Investment in African Special Economic Zones,”
p. 1.
329. “Little to Fear but Fear Itself,” Economist, September 21, 2013, p. 51.
330. See Snow, The Star Raft, p. 183.
331. Brown, Hidden Dragon, Crouching Lion , p. 16.
332. Serge Michel and Michel Beuret, China Safar: On the Trail of Beijing’s
Expansion in Africa (New York: Nation Books, 2010), p. 7.
333. Raymond W. Copson, “The U.S. Response to China’s Rise in Africa: Policy
and Policy Options,” in Marcel Kitissou (ed.), Africa in China’s Global Strategy
(London: Adonis and Abbey, 2007), p. 62.
335. Ibid., p. 134.
336. Brautigam, Chinese Aid and African Development, p. 47. This figure is from
1991.
337. See Marcel Kitissou, “Globalization and Fragmentation: The New Era of
Africa-China Cooperation,” in Kitissou (ed.), Africa in China’s Global Strategy,
pp. 13–16.
338. Robert I. Rotberg, “China’s Quest for Resources, Opportunities, and Influence
in Africa,” in Rotberg (ed.), China into Africa , p. 2.
339. Stephanie Hanson, “China, Africa, and Oil,” Backgrounder—Council on
Foreign Relations, 2009, p. 3 (online at www.crf.org/publicatiions/9557/ ).
340. Zhang Zhongxiang, “A Win-Win Forum,” p. 12.
Notes ● 239
341. Alden, China in Africa, p. 5.

342. Guerrero and Manji, China’s New Role in Africa and the South, pp. 142–43.
344. Zweig and Bi, “China’s Global Hunt for Energy,” pp. 25–38.
345. “Country Policy and Institutional Assessments,” World Bank 2008 Assessment
Questionnaire,” World Bank (Operations Policy and Country Services),
September 5, 2008, cited in Brautigam, “China, Africa and the International Aid
Architecture.” Brautigam notes that her own research confirms these findings.
346. According to China’s 2011 White Paper it is 8.9 percent. A number of ana-
lysts of China’s aid in Africa call it “evenly distributed.” See “The West Has
No Right to Criticize the China-Africa Relationship,” Guardian, February 8,
2012 (online at guardian.co.uk) and “Why Are We So Critical about China’s
Engagement in Africa?” Trademark Southern Africa, August 23, 2011 (online
at trademarksa.org).
347. “Little to Fear but Fear Itself,” Economist, p. 51.
348. See “The Chinese in Africa,” Economist, April 20, 2011 (online at economist.
com).
349. Cook, “Sub-Saharan Africa,” in China’s Foreign Policy and “Soft Power” in
South America, Asia, and Africa , p. 112.
350. “African Countries Supporting China on the Adoption of the Anti-Succession
Law,” Forum on China-Africa Cooperation, Ministry of Foreign Affairs,
People’s Republic of China, March 22, 2005, cited in Halper, The Beijing
Consensus, p. 110.
351. “China Thanks African Countries for Defeating Taiwan’s Bid to Join UN,”
Associated Press, September 28, 2007.
352. Stefan Halper, The Beijing Consensus: How China’s Authoritarian Model Will
Dominate the Twenty-First Century (New York: Basic Books, 2010), p. 113.
353. See “Bangkok Statement on Furthering Asia-Africa Cooperation,” issued at
the Second Asia-Africa Forum: Furthering Asia-Africa Cooperation, held June
11–13, 1997 (online at un.org/esa/Africa/Bangkok.html).
354. Halper, Beijing Consensus, pp. 112–13.
3 China’s Foreign Aid and Investment Diplomacy in

Other Regions—Europe, the Middle East,
Latin America, and Oceania
1. Samuel B. Griffith, Albania and the Sino-Soviet Rift (Cambridge: MIT Press,
1963), p. 41.
2. People’s Daily, December 8, 1954, cited in John F. Copper, China’s Foreign Aid:
An Instrument of Peking’s Foreign Policy (Lexington, MA: D.C. Heath, 1976),
p. 35.
3. Michael B. Yahuda, “China and Europe: The Significance of a Secondary
Relationship,” in Thomas W. Robinson and David Shambaugh (eds.), Chinese
Foreign Policy (Oxford: Clarendon Press, 1994), p. 275.
240 ● Notes
4. Peking Review, January 20, 1959, cited in Copper, China’s Foreign Aid , p. 36.
5. Copper, China’s Foreign Aid, p. 36; Harold C. Hinton, China’s Turbulent
Quest (New York: Macmillan, 1970), p. 105.
p. 79. Some questioned China’s ability inasmuch as it had to ship all of its aid
to Albania by sea.
7. See A. Doak Barnett, Communist China and Asia (New York: Random House,
1961), pp. 337–51.
8. People’s Daily, April 26, 1961, cited in Copper, China’s Foreign Aid , p. 36.
10. Yu Fai Law, Chinese Foreign Aid: A Study of Its Nature and Goals with Particular
1952–1982 (Saarbrucken, Germany: Verlag Breitenbach, 1984), p. 197.
12. Shu Guang Zhang, Economic Cold War: America’s Embargo against China and
the Sino-Soviet Alliance, 1949–1963 (Washington, DC: Woodrow Wilson
Center Press, 2001), p. 261.
13. Ibid., p. 261. Also see Bartke, China’s Economic Aid , pp. 79–80.
14. People’s Daily, June 26, 1965, cited in Copper, China’s Foreign Aid, p. 37.
China’s economic situation was probably the reason for it not providing infor-
mation on this aid.
15. People’s Daily, October 20, 1966, cited in Copper, China’s Foreign Aid, p. 37.
16. 1968 Yearbook on Communist China (Taipei: Ministry of Defense, 1968), p. 174.
17. Robert G. Sutter, Chinese Foreign Relations after the Cultural Revolution,
1966–1977 (Boulder, CO: Westview Press, 1978), p. 11.
18. See John F. Copper, “China’s Military Assistance,” in John F. Copper; and
Daniel S. Papp (eds.), Communist Nations Military Assistance (Boulder, CO:
Westview Press, 1983), p. 112.
19. Ibid.
20. David Bligh, “Red China and Europe,” America, March 8, 1969, cited in ibid.
21. See Michael B. Yahuda, China’s Role in World Affairs (London: Croom Helm
Ltd, 1979), p. 207.
22. For details, see Copper, “China’s Military Assistance,” Copper and Papp (eds.),
Communist Nations Military Assistance, p. 112.
23. Joseph Camilleri, Chinese Foreign Policy: The Maoist Era and Its Aftermath
(Seattle: University of Washington Press, 1980), p. 127.
24. Jung Chang and Jon Halliday, Mao: the Unknown Story (New York: Alfred A.
Knopf, 2005), p. 585.
25. Copper, China’s Foreign Aid in 1978 (Baltimore: University of Maryland
School of Law, 1979), p. 24.
26. New York Times, July 27, 1977, cited in ibid., p. 25.
27. Shu, Economic Cold War, p. 26. Bartke, China’s Economic Aid , pp. 79–84.
Bartke provides a list of the projects and their dates. Another source says 91
were completed, another says 23 were nearly completed, and 17 others were in
the survey and design stage. See Law, Chinese Foreign Aid, p. 198.
Notes ● 241

29. See Xinhua, July 3, 1978, and Peking Review, July 26, 1978, both cited in
John F. Copper, “China’s Military Assistance,” in John F. Copper and Daniel S.
Papp (eds.), Communist Nations’ Military Assistance (Boulder, CO: Westview
Press, 1983), p. 112. Confirming the scope of China’s military assistance to
Albania, it was reported Albania sold Chinese weapons and ammunition to
an arms company that in turn sold it to the US military for use in the war in
Afghanistan. See “US Ambassador Implicated in Scheme to Conceal Origin
of Chinese Ammo,” exportlawblog, June 23, 2008 (online at exportlawblog.
com) and C. J. Chivers, “Supplier under Scrutiny on Arms for Afghanistan,”
New York Times, March 27, 2008 (online at nytimes.com).
30. Xinhua, July 13, 1978, cited in Law, Chinese Foreign Aid, p. 198.
31. Cited in Elez Biberaj, Albania and China: A Study of an Unequal Alliance
(Boulder, CO: Westview Press, 1986), pp. 135–36.
33. People’s Daily, November 7, 1956, and Alexander Eckstein, Communist China’s
Economic Growth and Foreign Trade (New York: McGraw-Hill, 1965), p. 140,
both cited in Copper, China’s Foreign Aid, p. 38. The type of aid China
announced may not have been accurate; according to Chang and Halliday,
Mao said at the time the aid did not have to be repaid. See Mao: The Unknown
Story, p. 383.
34. Yahuda, China’s Role in World Affairs, p. 90.
36. However, at the time China took a different position on what seemed a similar
situation in Poland, but in Chinese eyes it was not. In the milieu of Eastern
Europe losing confidence in the Soviet Union’s leadership, and China advanc-
ing the idea (that Mao had long held, but Soviet leaders had rejected) that
there could be contradictions between socialist countries and Communist par-
ties, China became a leading ideological voice in the Communist world. This,
of course, was to later become a factor in worsening Sino-Soviet relations; but
for the moment it gave China a measure of image in the bloc that it had not
had before. See Camilleri, Chinese Foreign Policy, pp. 60–61.
37. Peking Review, May 29, 1970, cited in Copper, China’s Foreign Aid, p. 39.
38. See Kang Hua, “An Analysis of Communist China’s Economic Aid to the Third
World,” Studies on Chinese Communism, October 1972, and Far Eastern Economic
Review, November 27, 1972, both cited in Copper, China’s Foreign Aid, p. 39.
39. See James E. Dornan and Nigel De Lee, The Chinese War Machine: A Technical
Analysis of the Strategy and Weapons of the People’s Republic of China (Wroughton,
UK: Salamander Books, 1979), p. 50, and Bradley Hahn, “The People’s
Republic of China—Recent Naval Developments and Trends,” Proceedings of
the Second International Symposium on Asian Studies, Asian Research Service,
1980, p. 90, both cited in Copper, “China’s Military Assistance,” p. 114.
Chinese weapons were being made in North Korea at this time.
242 ● Notes
42. Xinhua, April 27, 1972, cited in Copper, China’s Foreign Aid, p. 148.
43. See Janos Horvath, Chinese Technology Transfer to the Third World: A Grants
Economy Analysis (New York: Praeger, 1976), p. 13. The author says the loan
was for $45 million.
44. Bartke, China’s Economic Aid, p. 134. Also see “China and Malta,” Ministry of
Foreign Affairs, October 12, 2003 (online at mfa.org.cn).
45. Ibid.
46. Malta News, November 10, 1972, cited in Copper, China’s Foreign Aid,
p. 148.
48. “Malta-China relations,” Wired Malta, February 17, 2005 (online at daily-
malta.com).
49. “The Aid Program of China,” The Organization for Economic Cooperation
and Development, March 1987, p. 19.
50. Samuel S. Kim, “China and the United Nations,” in Elizabeth Economy and
Michel Oksenberg (eds.), China Joins the World: Progress and Prospects (New
York: Council on Foreign Relations, 1999), p. 54.
51. Samuel S. Kim, “Chinese Foreign Policy Faces Globalization Challenges,” in
Alastair Iain Johnston and Robert S. Ross (eds.), New Directions in the Study
of China’s Foreign Policy (Stanford, CA: Stanford University Press, 2005),
p. 295.
52. Czeslaw Tubilewicz, “Taiwan’s Macedonian Project,’ 1999–2001,” China
Quarterly, September 2004, p. 784.
53. “Bilateral Relations,” Ministry of Foreign Affairs, October 12, 2003 (online at
mfa.gov.cn).
54. “China Grants 2m-Euro Aid to Macedonia,” BBC Monitoring Asia Pacific,
January 5, 2007 (online at lexisnexis.com).
55. Jane Lin and Quincy Yu, “China’s School Bus Donation to Macedonia Stirs
Strong Criticism,” Epoch Times, December 2, 2011(online at theepochtimes.
com).
56. “Chinese Companies to Enter European Markets via Macedonia, Says PM
Gruevski,” DiploNews, May 2012 (online at diplonews.com).
57. Olesya Dmitracova, “China’s New Foreign Policy Takes Shape—in Moldova,”
Reuters, February 2, 2010 (online at reuters.com).
58. Louis O’Neill, “China Gains a Foothold in Russia’s Backyard,” Financial
Times, July 28, 2009 (online at ft.com/cms/s/0/b3d9079e-7ba8–11de-9772–
00144ffeaddc0.html).
59. Ibid.
60. M. K. Bhadrakumar, “China Dips Its Toe in the Black Sea,” Asia Times,
August 1, 2009, p. 2 (online at asiatimes.com).
61. Ibid.
62. See O’Neill, “China Gains a Foothold in Russia’s Backyard.” The author sug-
gests this was a motivating factor for Chinese leaders.
63. “$1 Billion Moldova Loan Could Signal China Diversification,” Radio Free
Europe/Radio Liberty, August 8, 2009 (online at www.rferl.org ).
Notes ● 243
64. O’Neill, “China Gains a Foothold in Russia’s Backyard.”

65. Bhadrakumar, “China Dips Its Toe in the Black Sea,” p. 4.
66. “$1 Billion Moldova Loan Could Signal China Diversification,” Radio Free
Europe/Radio Liberty,” November 30, 2012 (online at rferl.org).
67. Mariya Stanimirova, “Moldova to Receive $8 mil Grant from China—Govt,”
See News, July 10, 2013 (online at seenews.com).
68. Wu Jiao and Cheng Guangjin, “China, Ukraine Forge New Partnership,”
China Daily, June 21, 2011 (online at chinadaily.com.cn).
69. In 2009, China granted $500,000 to Ukraine to deal in medical aid. See
“$500,000 to Ukraine to Deal with A/H 1N1 Flu,” Xinhua, December 8,
2009 (online at xinhuanet.com.cn). The aircraft carrier was towed to a dry
dock in Dalian where it underwent completion. It was named the Liaoning
and is 300 meters long and weighs 60,000 tons. See David Shambaugh, China
Goes Global: The Partial Power (New York: Oxford University Press, 2013),
p. 292.
70. Oleg Varfolomeyev, “Ukraine Increasingly Relies on Chinese Finances,”
Eurasia Daily Monitor (Jamestown Foundation), July 30, 2012 (online at
Jamestown.org).
71. Ibid.
72. Ibid.
73. “Democracy Assistance under Fire in Ukraine,” Democracy Digest, September
16, 2011 (online at demdigest.net).
74. The United States offered Ukraine $50 million security aid at this time—a
very small promise compared to China’s. See “US Confirms $50 Million Aid
to Ukraine for Nuclear Security Purposes,” NATO Source (Atlantic Council),
February 16, 2011 (online at acus.org).
75. See Wu and Cheng, “China, Ukraine Forge New Partnership.”
76. Tadeusz Iwanski, “Ukraine, Belarus and Moldova and the Chinese Economic
Expansion in Eastern Europe,” Centre for Eastern Studies, May 28, 2012
(online at osw.waw.pl).
77. Shambaugh, China Goes Global , p. 197.
78. Valery Thachev, “Ukraine Has Become China’s New Strategic Partner.”
79. Ibid.
80. “Beijing to Buy Grain from the Ukraine,” Asianews.it, September 13, 2013
(online at asianews.it).
81. Alexander Gabeuv, “A ‘Soft Alliance’? Russia-China Relations after the
Ukraine Crisis,” Policy Brief (European Council on Foreign Relations),
February 2015 (online at ecf.eu).
82. Artyom Lukin, “Ukraine: And the Winner Is . . . China,” Foreign Policy
Research Institute, March 2014 (online at fpri.org) and John Grady, “China
May Be Surprising Winner in Ukraine Turmoil,” USNI News, October 27,
2014 (online at usni.org).
83. Samuel Ramani, “Hey, Putin, Have You Seen How Much China Is Investing
in Ukraine?” Washington Post, July 24, 2015 (online at washingtonpost.com).
84. Ibid.
244 ● Notes
85. “Humiliated by West, Belarus Turns to China Rating Agency,” Reuters,

November 8, 2011.
86. Ibid.
87. Nataliya Nedzhvetskaya, “China and Belarus: A Special Relationship,”
Harvard Political Review, December 20, 2011 (online at hpoline.org).
88. “Belarus, China to Implement Huge Investment Project,” Xinhua, December
24, 2011 (online at china.org.cn).
89. “Chinese Capital Could Compete with Russian Capital,” Solidarity with
Belarus Information Office, July 24, 2012 (online at solidarityby.eu).
90. “China to Allocate $16m for Belarus’ Chernobyl Programs,” “China Ready
to Provide $3b on Chinese-Belarusian Industrial Park,” “Chinese Loans for
Minsk Airport Development,” Belarusian-Chinese Committee on Trade and
Economic Cooperation, October 30 and 31, 2012.
91. “Belarus, China Agree to Strengthen Investment Cooperation,” DiploNews,
October 31, 2012 (online at diplonews.com).
92. “China Funding over 20 Investment Projects in Belarus,” Kazinform, October
30, 2012 (online at infom.kz).
93. “Belarus,” New York Times, November 29, 2012 (online at nyt.com).
94. Nedzhvetskaya, “China and Belarus.”
95. “Belarus Seeks Chinese Aid as Devaluation Looms,” Moscow Times, July 17,
2013 (online at themoscowtimes.com).
96. Tadeusz Iwanski, “Ukraine, Belarus and Moldova and the Chinese Economic
Expansion in Eastern Europe,” Center for Eastern Studies, May 28, 2012.
97. Alkman Granitsas and Costas Paris, “Chinese Transform Greek Port Winning
Over Critics,” Wall Street Journal, November 20, 2014 (online at wsj.com).
98. Ibid.
99. Shannon Tiezzi, “Can China Save Greece—and the European Union?” The
Diplomat, June 30, 2015 (online at thediplomat.org) and Dean Chen, “Could
China Save Greece from Financial Ruin?” Foreign Policy, July 4, 2015 (online
at foreignpolicy.com).
100. Tom Little, “Nasser and the Cold War Strategy,” Arab World, July 1959,
p. 8, cited in Joseph E. Khalili, Communist China’s Interaction with the Arab
Nationalists since the Bandung Conference (New York: Exposition Press, 1970),
p. 99.
101. Cairo Radio, May 16, 1956, and “Peking and Cairo,” China News Analysis,
November 22, 1956, cited in Yitzhak Shichor, The Middle East in China’s
Foreign Policy, 1949–1977 (London: Cambridge University Press, 1979),
p. 43.
102. Lillian Craig Harris, China Considers the Middle East (London: I. B. Tauris,
1993), p. 90.
103. Lillian Craig Harris, “Myth and Reality in China’s Relations with the Middle
East,” in Robinson and Shambaugh (eds.), Chinese Foreign Policy: Theory and
Practice, p. 330.
104. Xinhua, November 10 and 12, 1956, cited in Copper, China’s Foreign Aid,
p. 71.
Notes ● 245
105. Harris, “Myth and Reality in China’s Relations with the Middle East,” p. 330.
106. International Financial News Survey, January 25, 1957, p. 225, cited in Khalili,
Communist China’s Interaction with the Arab Nationalists since the Bandung
Conference, p. 99.
107. Anne Gilks and Gerald Segal, China’s and the Arms Trade (London: Croom
Helm, 1985), p. 51.
108. See Mohamed Hassanein Heikal, The Cairo Documents: The Inside Story of
Nasser and His Relationship with World Leaders, Rebels, and Statesmen (New
York: Doubleday, 1973), chapter 10. It is also noteworthy that Nasser became
president in June; China’s aid pledge was made in November.
109. In May 1955, Egypt proposed to the Arab League about recognizing China.
See Joseph E. Khalili, Communist China’s Interaction with the Arab Nationalists
(New York: Exposition Press, 1970), p. 96.
110. For further details, see Robert C. North, The Foreign Relations of China
(Colorado Springs, CO: Dickenson Publishing Co., 1974), p. 137.
112. Ibid.
113. Peking Review, December 24, 1964, cited in Copper, China’s Foreign Aid, p. 72.
114. Marshall Goldman, Soviet Foreign Aid (New York: Praeger, 1967), p. 73.
115. Harris, “Myth and Reality in China’s Relations with the Middle East,” p. 331.
116. Bartke, China’s Economic Aid, p. 112; Copper, China’s Foreign Aid, p. 73.
Bartke says that none of China’s aid was used. It was reported elsewhere that
only around 13 percent of the aid pledge had been drawn. See Mahmud al-
Maragh, “What in the Talks between Egypt and People’s Republic of China,”
Ruz al-Yusuf, February 23, 1970, cited in Yitzhak Shichor, The Middle East in
China’s Foreign Policy, 1949–1977 (Cambridge: Cambridge University Press,
1979), p. 206.
117. “Developments of the Quarter: Comment and Chronology,” Middle East
Journal, Summer 1965, p. 352, cited in North, The Foreign Relations of China,
p. 138, and Mohammed Heikal, The Cairo Documents: The Inside Story of
Nasser and His Relationship with World Leaders, Rebels and Statesmen (New
York: Doubleday, 1973), p. 313.
118. Heikal, The Cairo Documents, p. 268.
119. Yitzhak Shichor, The Middle East in China’s Foreign Policy, 1949–1977
(London: Cambridge University Press, 1979), p. 109.
120. Christian Science Monitor, July 11, 1967, cited in Gilks and Segal, China and
the Arms Trade, p. 80 (footnote 181).
121. New York Times, June 12, 1967, cited in Copper, China’s Foreign Aid, p. 73.
122. See Bartke, China’s Economic Aid, p. 112. The author says that none of the aid
China promised was used.
123. People’s Daily, March 7 and 30, 1976, cited in Copper, “China’s Aid in 1976,”
p. 19.
124. Keesings Contemporary Archives, July 2, 1976, cited in Copper, “China’s Aid
in 1976,” p. 19. It was uncertain how much of this was new aid and how much
was funds left over from earlier pledges that were not used.
246 ● Notes
125. The Times, March 23, 1976, cited in Gilks and Segal, China and the Arms
Trade, p. 59.
126. G. W. Choudhury, China in World Affairs (Boulder, CO: Westview Press,
1982), p. 279.
127. Daily Telegraph, September 29, 1977, cited in Gilks and Segal, China and the
Arms Trade, p. 47.
128. SIPRI Yearbook 1980, p. 129 cited in Gilks and Segal, China and the Arms
Trade, p. 64.
129. New York Times, December 1, 1958, cited in Copper, China’s Foreign Aid,
pp. 73–74.
130. Harold Hinton, Communist China in World Politics (Boston, MA: Houghton
Mifflin, 1966), p. 185; Goldman, Soviet Foreign Aid , p. 46.
132. John W. Garver, Foreign Relations of the People’s Republic of China (Englewood
Cliffs, NJ: Prentice Hall, 1993), p. l38.
133. Gilks and Segal, China and the Arms Trade, p. 100. Algeria became China’s
first training base for guerrilla fighters from Portuguese and southern Africa
and was a supply route for Chinese arms to the Congo.
135. George S. Masannat, “Sino-Arab Relations,” Asian Survey, April 1966,
pp. 222–23.
136. Peking Review, October 18, 1963, cited in Copper, China’s Foreign Aid, p. 74.
137. New York Times, February 4, 1965, cited in Copper, China’s Foreign Aid,
p. 74.
138. Newsweek, January 13, 1964, cited in Copper, China’s Foreign Aid, p. 74. Also
see Gilks and Segal, China and the Arms Trade, p. 37.
p. 75.
140. Statistical Yearbook (New York: United Nations, 1968), pp. 6892–95, cited in
Copper, China’s Foreign Aid, p. 74.
141. Choudhury, China in World Affairs, p. 29.
143. People’s Daily, February 22, 1963, cited in Copper, China’s Foreign Aid, p. 77.
145. Ibid.
146. Sidney Klein, Politics versus Economics: The Foreign Trade and Aid Policies of
China (Hong Kong: International Studies Group, 1968), p. 170.
147. Facts on File, January 10, 1969, cited in Copper, China’s Foreign Aid, p. 77;
Gilks and Segal, China and the Arms Trade, p. 212.
149. New York Herald Tribune, June 26, 1971, cited in Copper, China’s Foreign Aid,
p. 77.
150. New York Times, February 1, 1972, cited in Copper, China’s Foreign Aid, p. 77.
For details on the projects, see Bartke, China’s Economic Aid, pp. 176–77. Also
Notes ● 247
see Harris, China Considers the Middle East, p. 151. The author states that
China also sent 50 technicians.
151. It is also uncertain whether the second loan may have consolidated and
increased the former. Different amounts and dates have also been cited for
China’s aid at this time. See Bartke, China’s Economic Aid, p. 176 and Horvath,
Chinese Technology Transfer to the Third World , p. 17. The former cites a 1971
loan as worth $36 million and a 1972 loan for $47; the latter mentions only a
$45 million loan in 1972.
152. Xinhua, January 13, 1958, cited in Copper, China’s Foreign Aid, p. 78.
153. Eckstein, Communist China’s Economic Growth and Foreign Trade, p. 235, and
Khalili, Communist China’s Interaction with the Arab Nationalists, p. 107. Also
see Shichor, The Middle East in China’s Foreign Policy, 1949–1977. The author
notes that the Yemeni government asked China to keep its aid people and
workers away from the local population, something China elsewhere had been
criticized for.
155. Yemen abstained when the United Nations in 1951 condemned China as an
aggressor in Korea and voted against postponing the debate on China’s admis-
sion in 1956. See Shichor, The Middle East in China’s Foreign Policy, 1949–
1977, pp. 29 and 47.
156. Chiang Tao, “Economic Aid to Asian and African Countries by Communist
China,” Studies on Chinese Communism, February 28, 1967, cited in Copper,
China’s Foreign Aid, p. 79.
157. Goldman, Soviet Foreign Aid, p. 152.
158. Copper, China’s Foreign Aid, p. 79; Gilks and Segal, China and the Arms Trade,
p. 140.
159. China Topics, September 1968, cited in Copper, China’s Foreign Aid, p. 79.
p. 79.
161. Ibid.
164. Xinhua, September 18, 1968, cited in Copper, China’s Foreign Aid, p. 80.
165. Southern Yemen was formed from Aden and the Aden Protectorate.
166. Certainly China had cause to think this way. The South Yemen foreign min-
ister visited China at this time and said that China’s liberation offered an
“example for all people seeking to break away from imperialism.” See Xinhua,
March 31, 1979, cited in Harris, China Considers the Middle East, p. 109.
168. The Soviet Union was critical of “ultra-left wing politics” in Southern Yemen
and had threatened to cut its economic aid. See Copper, China’s Foreign Aid,
p. 81.
169. Middle East News Agency, July 31, 1970, cited in Copper, China’s Foreign Aid,
p. 81; Bartke, China’s Economic Aid , p. 166.
248 ● Notes
170. China Topics, March 8, 1972, cited in Copper, China’s Foreign Aid, p. 81.
171. Facts on File 1971, cited in Copper, China’s Foreign Aid, p. 81.
172. See Bartke, China’s Economic Aid, p. 166 regarding the agreement. For the aid
pledge see China Topics, March 1973, cited in Copper, China’s Foreign Aid,
p. 82.
174. Copper, China’s Foreign Aid, p. 148 and 150.
175. Ibid., p. 13.
176. Harris, China Considers the Middle East, p. 118. The author states that China
gave 30,000 Syrian pounds for the camps.
177. Harris, “Myth and Reality in China’s Relations with the Middle East,”
p. 333.
178. Harris, China Considers the Middle East, p. 118.
179. New York Times, September 29, 1966, cited in Gilks and Segal, China and the
Arms Trade, p. 42.
180. Ze’ef Schiff and Raphael Rothstein, Fedayeen (London: Valentine & Mitchell,
1971), p. 209, cited in ibid.
181. Harris, China Considers the Middle East, p. 119. The author cites an Israeli
intelligence agent as the source for this figure.
182. Ibid., p. 161. Author cites a conversation with a Fatah security chief.
183. Ibid. Syria seized the tanks.
184. Harris, “China and the Middle East,” p. 333.
186. Ibid.
187. Ibid., pp. 102–3.
188. Ibid., p. 103.
189. Harris, “China Considers the Middle East,” pp. 334–36.
190. Jon B. Alterman, “The Vital Triangle,” in Bruce Wakefield and Susan L.
Levenstein (eds.), China and the Persian Gulf: Implications for the United States
(Washington, DC: Woodrow Wilson International Center, 2011), pp. 27–37.
According to two writers, China has no vital strategic interest that needs to be
protected in the Middle East. The region is distant from China and is not an
area where hostile forces could threaten China. It is not a traditional sphere of
influence. China can deal with the oil problem there by paying more if prices
are increased. See Jon B. Alterman and John W. Garver, The Vital Triangle:
China, the United States and the Middle East (Washington, DC: Center for
Strategic and International Studies, 2008), p. 18.
191. Ibid., chapter 2. The authors argue that China is geographically too far from
the Middle East for it to exercise much influence there and perceives that it
can pay higher prices for oil if necessary.
192. Harris, “Myth and Reality in China’s Relations with the Middle East,”
p. 332.
193. Lu Ning, “Central Leadership, Supraministry Coordinating Bodies, State
Council Ministries, and Party Departments,” in David M. Lampton (ed.),
The Making of Chinese Foreign and Security Policy in the Era of Reform,
Notes ● 249
1978–2000 (Stanford: Stanford University Press, 2001), p. 51. Arms sales

became viewed as foreign trade at that time.
194. The author does not want to argue that arms sales constitute foreign aid; how-
ever, due to the price, conditions on the sales, and the unavailability of these
arms elsewhere, the recipient received a financial or other advantage and thus
there is at least an “aid component” involved.
195. Iran did get help from France and Russia, but this was limited. As noted in
Volume 2, Chapter 3, North Korea provided Iran with help to build a nuclear
weapon (it having attained the ability to do that with China’s help).
196. Manochehr Dorraj and Carrie Liu Currier, “China’s Quest for Energy
Security in the Middle East: Strategic Implications,” in Carrie Liu Currier and
Manochehr Dorraj (eds.), China’s Energy Relations with the Developing World
(New York: Continuum, 2011), p. 65.
197. Afshin Molavi, “The New Silk Road, “Chindia,” and the Geo-Economic
Ties That Bind the Middle East and Asia,” in Bruce Wakefield and Susan L.
Levenstein (ed.), China and the Persian Gulf: Implications for the United States
(Washington, DC: Woodrow Wilson International Center, 2011), p. 45.
198. Gilks and Segal, China and the Arms Trade, p. 3 and p. 48. The authors suggest
around 1980 as the date China changed its policy of selling arms rather than
giving arms as aid—though this policy applied mainly to large weapons, not
small arms.
199. Yitzhak Shikor, “Unfolded Arms: Beijing’s Recent Military Sales Offensive,
Pacific Review, Volume 1, Issue 3, 1988, cited in Harris, “China and the
Middle East,” p. 344.
200. Defense and Foreign Affairs Daily, April 20, 1983, cited in Gilks and Segal,
China and the Arms Trade, p. 135.
201. Danile L. Byman and Roger Cliff, China’s Arms Sales: Motivations and
Implications (Santa Monica, CA: Rank Corporation, 1999), p. 50.
202. “Mubarak on the Wing,” Middle East International, May 25, 1990, p. 7, cited
in Harris, “Myth and Reality in China’s Relations with the Middle East,” in
Robinson and Shambaugh (eds.), Chinese Foreign Policy, p. 332.
203. New York Times, June 26, 1977, cited in Copper, “China’s Foreign Aid in
1977,” p. 28.
204. Copper, “China’s Foreign Aid in 1977,” p. 28.
205. David H. Shinn, “Military and Security Relations: China, Africa and the
Rest of the World,” in Robert I. Rotberg, China into Africa: Trade, Aid, and
Influence (Washington, DC: Brookings, 2008), p. 162. It is uncertain how
much of this was free aid and how much was sales. In any case, China did not
gain much leverage over Cairo’s policies in view of the fact that US arms aid
totaled $5.8 billion during this period.
206. “China Invests $16 Million for Textile Makeover in Egypt,” Embassy of the
People’s Republic of China in the Arab Republic of Egypt, November 21,
2005, cited in Alterman and Garver, The Vital Triangle, p. 78.
207. The reader needs to keep in mind that China has cancelled recipients’ debts
on investments and it seemed likely this would be another one. In other
250 ● Notes
words, there was a low expectation of repayment and thus the “investments”
were aid.
208. See Deborah Brautigam, Thomas Farole, and Tang Xiaoyang, “China’s
Investment in Africa’s Special Economic Zones: Prospects, Challenges, and
Opportunities,” World Bank, March 2010.
209. Ibid., p. 39.
210. Ibid.
211. Ibid., p. 40.
212. Alaa Shahine, “Egypt Offers Opportunities to China Sovereign Funds,
Bloomberg, June 15, 2010 (online at bloomberg.com).
213. Erin Cunningham, “Is China ‘Buying’ Egypt from the U.S.? Global Post,
September 6, 2012 (online at globalpost.com).
214. Ibid.
215. “China’s Investments in Egypt Increase by 60%,” China Daily, April 22, 2013
(online at chinadaily.com).
216. “China-Egypt Investments Hit 10 Billion Dollars in 2013,” State Information
Service, February 3, 2014 (online at sis.com).
217. John W. Garver, China and Iran: Ancient Partners in a Post-Imperial World
(Seattle: University of Washington Press, 2006), p. 166.
218. Ibid., pp. 178–79. Another source mentions that in 1982 Iran took a “signifi-
cant quantity” of arms from China as part of a $1.3 billion deal. See Gilks and
Segal, China and the Arms Trade, p. 212.
219. Wu Bingbing, “Strategy and Politics in the Gulf as Seen by China,” in
Wakefield and Levenstein (eds.), China and the Persian Gulf, p. 14.
220. Robert Lowe and Claire Spencer, Iran, Its Neighbors, and the Regional Crises
(London: Chatham House, 2006) cited in Geoffrey Kemp, The East Moves
West: India, China, and Asia’s Growing Presence in the Middle East (Washington,
DC: Brookings, 2010), p. 77.
221. Kemp, The East Moves West, p. 77.
222. Ibid., p. 76.
223. Erica Downs, “China-Gulf Energy Relations,” in Wakefield and Levenstein
(eds.), China and the Persian Gulf, pp. 67–73.
224. Ibid.
225. “China Defends Nuclear Cooperation with Iran,” China Institute (University
of Alberta), cited in Kemp, The East Moves West, p. 76.
226. David Patrikarikos, Nuclear Iran: The Birth of an Atomic State (London: I. B.
Tauris, 2012), p. 135.
227. Ibid., p. 137.
228. “China Defends Nuclear Cooperation with Iran,” p. 76.
229. See Sutter, Chinese Foreign Relations, pp. 300–1 and Andrew J. Nathan and
Andrew Scobell, China’s Search for Security (New York: Columbia University
Press, 2013), pp. 182–83.
230. Downs, “China-Gulf Energy Relations,” p. 62.
231. Zachary Keck, “China’s Trade and Investment in Iran Plummets,” The
Diplomat, March 22, 2013 (online at thediplomat.org).
Notes ● 251
232. “China to Double Iranian Investment,” BBC, November 16, 2014 (online at
bbc.com).
234. Wu, “Strategy and Politics in the Gulf as Seen by China,” in Wakefield and
Levenstein (eds.), China and the Persian Gulf, p. 14.
235. Ibid., p. 66. The authors cite International Herald Tribune, January 13, 1983.
236. Ibid.
237. Alterman and Garver, The Vital Triangle, p. 31.
238. Ibid., p. 32. The authors note the debt cancelled was to the Chinese govern-
ment. There may have been other debts to Chinese companies.
239. Tim Arango and Clifford Krauss, “China Is Reaping the Biggest Benefits of
Iraq Oil Boom,” New York Times, June 2, 2013 (online at nyt.com).
240. “PetroChina to Join Exxon on Giant Iraqi Oilfield: report,” Reuters, August
11, 2013 (online at reuters.com).
241. Peter Ford, “Why China Stays Quiet on Iraq, Despite Being no. 1 Oil Investor,”
Christian Science Monitor, June 27, 2014 (online at cmonitor.com).
242. “More Effective Aid to Foreign Countries,” Xinhua, March 1, 1984 (online at
xinhua.com).
243. “China and Libya: What’s the Real Story” China and Africa: The Real Story,
March 4, 2011 (online at chinaafricarealstory.com).
244. “China’s investment in Libya is more than $20 billion and the amount of
loss is difficult to estimate,” Chonzfashion, no date (online at chonzfashion.
hubpages.com). This report was published in 2011 as evidenced by mention
of the events of that year. It cites a report published by the US Commerce
Department saying that 20 companies had invested in huge projects valued at
$18.5 billion.
245. “China to Help Libya with Reconstruction,” China Daily, February 16, 2012
(online at libyabusinessnew.com).
246. “UPDATE 2-China in 140,000 bpd Libya Oil Deals for 2012-Traders,”
Reuters, March 1, 2012 (online at reuters.com).
248. David H. Shinn and Joshua Eisenman, China and Africa: A Century
of Engagement (Philadelphia: University of Pennsylvania Press, 2012),
pp. 234–35.
249. “China Invested $1.5 Billion in Algeria in a Decade: Envoy,” AFP, April 14,
2013 (online at economictimes.indiatimes.com).
250. “Algeria: Africa’s Largest Chinese Community,” Dragons Tail, February 26,
2013 (online at dragonstail.worldpress.com).
251. Naser al-Tamimi, “China-Algeria Relations: Growing Slowly but Surely,”
Al Arabiya News, March 26, 2014 (online at english.alarabiya.net).
252. Ibid., pp. 235–38.
253. Erica Downs, “Who’s Afraid of China’s Oil Companies,” Brookings Institution
(research paper), July 2010 (online at brookings.org).
254. Shinn and Eisenman, China and Africa, p. 238. China made a $6 million
donation to a development project.
252 ● Notes
255. Nadia Rabbaa, “China Now Sees Morocco as a Base for Manufacturing,” Africa
Report, June 3, 2015 (online at theafricareport.com) and “Morocco-China:
Trade Agreements,” Africa Trade Bulletin, December 30, 2014, p. 20624C.
256. Mohammad Zulfikarf Rakhmat, “China and Tunisia: A Quiet Partnership,”
The Diplomat, June 28, 2014 (online at thediplomat.com) and “Tunisia Seeks
China Investment,” Global Times, September 9, 2013 (online at globaltimes.
cn).
257. Choudhury, China in World Affairs, pp. 282–83.
259. Choudhury, China in World Affairs, p. 284.
260. Dennis Warner, Hurricane from China (New York: Macmillan, 1961), p. 101.
261. People’s Daily, December 1, 1960, cited in Copper, China’s Foreign Aid, p. 34.
263. Hang Shixue, “The Chinese Foreign Policy Perspective,” in Riordan Roett
and Guadalupe Paz (eds.), China’s Expansion into the Western Hemisphere:
Implications for Latin America and the United States (Washington, DC:
Brookings, 2008), p. 29.
265. Hang, “The Chinese Foreign Policy Perspective,” in Roett and Paz (eds.),
China’s Expansion into the Western Hemisphere, p. 29.
266. People’s Daily, February 23, 1963, cited in Copper, China’s Foreign Aid, p. 34.
267. Copper, China’s Foreign Aid, p. 34. Some of the aid, including arms, was,
however, apparently delivered. Later China, in denying that it had sent arms to
El Salvador, said that it had earlier sent arms to Cuba and that these weapons
were sent to guerrillas in El Salvador. See Law, Chinese Foreign Aid, p. 201.
Law cites a March 1987 issue of Peking Review.
268. Copper, China’s Foreign Aid, p. 35, and Goldman, Soviet Foreign Aid , p. 160.
270. New York Times, July 4, 1971, cited in Copper, China’s Foreign Aid, p. 147.
271. Carol Fogarty, Chinese Economy Post-Mao. Washington, DC: Joint Economic
Committee of Congress, 1978. Also see Bartke, China’s Economic Aid , p. 105.
Bartke states that the loan was for $65 million.
272. Bartke, China’s Economic Aid, p. 105. Horvath, Chinese Technology Transfer
to the Third World , p. 44, however, cites that the loan was repayable after
30 years with a 10-year grace period and at no interest.
273. El Siglo, December 30, 1972, cited in Copper, China’s Foreign Aid, p. 149.
274. See New York Times, November 23, 1971, cited in Copper, China’s Foreign
Aid, p. 147.
275. Copper, China’s Foreign Aid, p. 149. On the other hand, it is worth noting
that relations between China and Chile did not deteriorate badly with the new
Pinochet government. China’s leaders liked Allende on a number of counts. He
had been the head of the Chile-China Friendship Association and he was the
first Latin American head of state to grant diplomatic status to China. Zhou
Enlai personally sent a message of condolence to Allende’s widow upon his
death. On the other hand, Chinese spokespersons said it was Soviet influence
Notes ● 253
and their doctrine of peaceful transition that led to his overthrow. Class ene-
mies were not clearly recognized and were not defeated. Allende nationalized
small businesses and extended pay increases to workers and social benefits
far beyond the government’s capacity to maintain them, which was “ultra-
leftism.” Thus the Allende government lost the support of the masses. From
China’s perspective the Brezhnev regime was worse than that of Pinochet.
See Yahuda, China’s Role in World Affairs, p. 280.
276. Bartke, China’s Economic Aid, p. 158. The author asserts that Peru was China’s
first recipient in South America. This would be true if one were to exclude the
$2 million in emergency aid given to Chile cited above.
277. Ibid.
278. R. Even Ellis, China in Latin America: The Whats and Wherefores (Boulder,
CO: Lynne Rienner, 2009), p. 149.
279. Hungdah Chiu, “China and the Law of the Sea Conference,” in James C.
Hsiung and Samuel S. Kim (eds.), China in the Global Community (New York:
Praeger, 1980), p. 192.
280. Copper, China’s Foreign Aid, pp. 147 and 150.
281. Choudhury, China in World Affairs, pp. 284–85.
282. Thomas Lum et al., “China’s Foreign Aid Activities in Africa, Latin America,
and Southeast Asia,” CRS Report for Congress (Congressional Research
Service), February 25, 2009, p. 14.
283. China gave some small amounts of aid (during period one of its foreign aid)
before this. In 1985, when the then prime minister Zhao Ziyang visited four
Latin American countries, China put its foreign aid giving, broadly defined,
back on track and extended a $20 million credit line to Argentina to purchase
Chinese goods, a $10 million loan to Nicaragua, $2 million to Antigua and
Barbados, and earthquake relief aid to Mexico. All of these pledges were called
foreign aid. In early 1986, China made aid offers to four other Latin American
countries, Bolivia, Grenada, Peru, and Surinam, and a new $20 million loan
for food and other commodities to Nicaragua. These “donations” were said to
reflect China’s desire to acquire new sources of natural resources and energy,
find new markets for Chinese products, isolate Taiwan, and secure strategic
advantages as China emerged as a world power. See The Aid Programme of
China (Paris: Organization for Economic Cooperation, 1987), p. 17 and Evan
Ellis, China in Latin America, p. 9.
284. Mary Anastasia O’Grady, “The Middle Kingdom in Latin America,” Asian
Wall Street Journal, September 6, 2004, p. A7.
285. See Qi Leyi, “Communist China and Cuba Sign Military Cooperation
Agreement,” China Times, January 2, 2001, p. 14, and Bill Gertz, “China
Secretly Shipping Cuba Arms,” Washington Post, June 12, 2001, p. A1, both
cited in Chung-chian Teng, “Hegemony or Partnership: China’s Strategy and
Diplomacy toward Latin America,” in Joshua Eisenman, Eric Heginbotham,
and Derek Mitchell (eds.), China and the Developing World: Beijing’s Strategy
for the Twenty-First Century (Armonk, NY: M. E. Sharpe, 2007), p. 92.
286. Ibid., p. 2.
254 ● Notes
287. Ibid.
288. Jiang Shixue, “Sino-Cuban Relations Enter New Phase of Comprehensive
Development,” Chinese Academy of Social Science, November 2008, cited in
ibid.
289. “Presidente chino firma docena de acuedos en su visita a Cuba,” cited in Ellis,
China in Latin America, p. 243.
290. Beijing Review, December 2, 2008, cited in ibid.
291. Yinghong Cheng, “Beijing and Havana: Political Fraternity and Economic
Patronage,” China Brief, April 30, 2009, p. 1.
292. There had been around 50,000 Chinese in Cuba. By 2004, 1000 had returned
and there were 20,000 new Chinese in Cuba. See Zhou Li, “Gu ba hua she
ying” [A Glimpse of the Chinese Community in Cuba], in Haiwai Zongheng,
No. 5, 2004, cited in ibid., p. 2.
293. Ibid.
294. Ellis, China in Latin America, p. 239.
295. Ibid., p. 240.
296. “Total Import and Export Value by Country (Region) (2007/01/01–12,” cited
in Evan Ellis, China in Latin America, p. 238.
297. “Cuba propuso a China 37 proyectgos por $1,500 millions,” El Neuvo Herald
(Miami), November 23, 2008, cited in Ellis, China in Latin America, p. 237.
298. Alvaro Murillo, “presidente Arias ya se encuentra en China,” Nation (Costa
Rica), January 22, 2008, cited in Ellis, China in Latin America, p. 239.
299. Tom Lasseter, “‘Old Friends’ Cuba, China Strengthen Ties,” McClatchy
Newspapers, September 16, 2009 (found online at Outlook Web Access
Light). The author cites an Agence France Presse report and notes that the
pledge was not announced in China.
300. Ibid.
301. See Mark M. Lowenthal, Intelligence: From Secrets to Policy (Washington, DC:
CQ Press, 2009), p. 319.
302. “Why Has China Snubbed Cuba and Venezuela,” Economist, June 6, 2013
(online at economist.com).
303. “China, Cuba Vow to Push forward Ties to New High,” Xinhua, November
24, 2011 (online at xinhuanet.com).
304. Jeff Frank, “Oil Rig Arrives for Cuba Offshore Exploration Work,” Reuters,
January 17, 2012 (online at reuters.com).
305. Wu Jiao and Zhang Yunbi, “China, Cuba Sign Cooperation Agreements dur-
ing Xi’s Visit,” China Daily, July 23, 2014 (online a chinadaily.com.cn).
306. Ibid.
307. China still gave some relative small amounts of foreign aid. For example, in
the early 1990s, China offered foreign aid to the government of Guyana to
help local industry; however, no figure on this aid was mentioned. The next
year a protocol was signed and it was reported that the amount of China’s aid
was $26 million. Chinese experts were soon seen in Guyana training brick-
layers, building rice farms, and upgrading the cotton industry. See New York
Notes ● 255
Times, November 23, 1971, cited in Copper, China’s Foreign Aid, p. 147, U.S.
News and World Reports, June 19, 1972, cited in Copper, China’s Foreign Aid,
p. 147, and Bartke, China’s Economic Aid , p. 121.
308. “China Plans to Invest $19B in Argentina,” Xinhuanet, November 17, 2004
(online at chinaview.cn).
309. Chung-chian Teng, “Hegemony or Partnership: China’s Strategy and
Diplomacy toward Latin America,” in Eisenman et al. (eds.), China and the
Developing World , p. 100.
310. “China Funds Argentina’s Rail Revival,” Railway Gazette, July 19, 2010 (online at
railwaygazette.com/news/single-view/view/10/china-funds-argentiana-revival/
brouse/3html).
311. “Chinese Investments in Argentina, IHLO (Hong Kong Liaison Office of
International Trade Union Confederation and Global Union Federation),
August 2013 (online at ihlo.com).
312. Joel Richards, “Xi’s Visit Brings Fresh Investment to Key Areas in Argentina,”
CCTV, July 20, 2014 (online at cctv.com).
313. Peter Howard Wertheim, “Petrobras Signs Strategic Alliance with China’s
Sinopec,” Oil and Gas Journal , July 5, 2004, p. 37.
314. Teng, “Hegemony or Partnership,” p. 100. China also signed a contract that
year with Chile to set up a joint-venture company to finance copper projects.
315. “Codelco y China Minmetals firman contrato por 15 anos,” Portal Mineero,
December 21, 2005, cited in Ellis, China in Latin America, p. 37.
316. “Venezuela. China Govts Create $6 Bln Joint Development Fund,” Dow Jones
Newswires, November 6, 2007.
317. “Luksic negocia sociedad con China Minmetals para ingresar a espeeranza,”
Portal Minero, November 28, 2007, cited in Ellis, China in Latin America,
p. 37.
318. Mark P. Sullivan, “Latin America and the Caribbean,” in China’s Foreign
Policy and “Soft Power” in South America, Asia, and Africa , p. 27.
319. “Latin America and the World Recession,” Universia (Georgetown University),
Vol. 3 No. 1, 2009 (online at gcg.universia.net).
320. Manuel Orozco, “Migration and Remittances in Times of Recession: Effects
on Latin American Economies,” Inter-American Dialogue, April 2009 (online
at oecd.org).
321. Ibid.
322. Ibid.
323. Geoff Dyer, The Contest of the Century: The New Era of Competition with
China—and How America Can Win (New York: Alfred A. Knopf, 2014),
p. 261. According to another source China’s investments in Venezuela amount
to more than half of its total investments in Latin America. See “Flexible
Friends,” Economist, April 12, 2014, p. 28.
324. Douglas E. Schoen and Melik Kaylan, The Russia-China Axis: The New Cold
War and America’s Crisis of Leadership (New York: Encounter Books, 2014),
pp. 66–67.
256 ● Notes
325. Orozco, “Migration and Remittances in Times of Recession: Effects on Latin

American economies.”
326. Juan Pablo Cardenal and Heriberto Araujo, China’s Silent Army The Pioneers,
Traders, Fixers and Workers Who Are Remaking the World in Beijing’s Image
(New York: Crown, 2014), p. 314.
327. “China, Ecuador Sign $2 Billion Loan Deal,” Wall Street Journal, June 29,
2011, cited in ibid., pp. 314–15. Another source puts the total at just under
$10 billion (up to 2013) and ranks Ecuador fourth among Latin American
recipients. See “Flexible Friends,” p. 27.
328. Orozco, “Migration and Remittances in Times of Recession.”
329. Ibid.
330. Du Wenjuan, “China Investment in Brazil More Diversified,” China Daily,
May 14, 2013 (online at chinadaily.com.ch). Brazil is often seen as the recipi-
ent of more financial help than any other Latin American country. The large
Bank of China loans to Venezuela noted above, however, may suggest other-
wise. On the other hand, it is uncertain if all of these loans have been finalized
and whether, if not, they will be continued after Hugo Chavez died in 2013.
331. Ibid.
333. Shambaugh, China Goes Global , pp. 114 and 117.
334. “China and Brazil Confirm Trade and Investment Deals Worth Billions,”
Guardian, May 19, 2015 (online at theguardian.com).
335. Dominic Wilson and Roopa Purushothaman, “Dreaming with BRICs: The
Path to 2050,” Goldman Sachs (global paper), October 1, 2003 (online at
media.library.ku.edu.tv).
336. Yue Fubin, “Viewpoint: China and the BRICS—Golden Years,” BBC,
November 27, 2011 (online at bbc.co.uk).
337. Schoen and Kaylan, The Russia-China Axis, p. 211.
338. Jeffrey Hays, “China Abroad: Foreign Policy, Aid, the U.N., G-20, NGOs,
Peacekeeper and Chinese Workers,” Facts and Details, November 2011, p. 1
(online at factsanddetails.com).
339. Rush Doshi and David Walter, “China’s Rising Tide in the Caribbean,” Wall
Street Journal, September 30, 2013, cited in Schoen and Kaylan, The Russia-
China Axis, p. 211.
340. “Lessons Worth Learning,” Beijing Review, February 18, 2010, p. 10.
341. “China Starts Building a $2.6b Resort in the Bahamas,” BBC News, February 21.
2011 (online at bbc.co.uk).
342. Sebastian Castaneda, “South America Awake to Risks of China Ties,” Asia
Times, April 21, 2011 (online at atimes.com).
343. Zhang Chunyan, “All the Way to the Bank of BRICS,” China Daily, March 28,
2013 (online at chinadaily.com.cn).
345. Patricia Rey Mallen, “Is the Partnership between China and Latin America
Paying Off?” International Business Times, May 8, 2014 (online at ibtimes.com).
Notes ● 257
346. “As the U.S. Sleeps, China Conquers Latin America,” Forbes, October 15,
2014 (online at forbes.com).
347. Cedilia Jamasmie, “Chinese Investment to Make Peru World’s Second-Largest
Copper Producer,” InfoMine, August 27, 2014 (online at mining.com).
348. Xiao Lixin, “China, Lat Am Ready for ‘Next Level,’” China Daily, May 18,
2015 (online at chinadaily.com).
349. Kathy Watson, “What Will China’s Investment Do for Latin America,” BBC,
July 7 2015 (online at bbc.com).
350. These are the Cook Islands, the Federated States of Micronesia, Fiji, Kiribati,
Marshall Islands, Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon
Islands, Tonga, Tuvalu, and Vanuatu. All are Pacific Islands except for Papua
New Guinea, which on the map appears to be part of Southeast Asia. All
are small in population, under a million, and territory except for Papua New
Guinea. China had not provided bilateral foreign aid to all of them, though all
have benefited from China’s aid to a regional body.
351. See Terence Wesley-Smith, China in Oceania: New Forces in Pacific Politics
(Honolulu: East-West Center, 2007), chapter 1, for an overview of China’s
interests in the region. There have been no Chinese settlements, however, in
Tuvalu, Tokelau, or Niue. There are a total of around 80,000 Chinese living
in Oceania, including 20,000 in Fiji and 20,000 in Papua New Guinea. Papua
New Guinea and Vanuatu have recently attracted Chinese businesspeople. See
Graeme Dobell, “The Pacific Proxy: China vs. Taiwan,” ABC Radio Australia
(cited in “Sino-Pacific Relations,” Wikipedia (viewed August 2011).
352. Yongjin Zhang, “China and the Emerging Regional Order in the South
Pacific,” Australian Journal of International Affairs, September 2007, p. 375.
353. See Terence Wesley-Smith,” China’s Pacific Engagement,” in Terence Wesley-
Smith and Edgar A. Porter (eds.), China in Oceania: Reshaping the Pacific?
(New York: Berghahn Books, 2010), p. 43.
354. See John Henderson and Benjamin Reilly, “Dragon in the Pacific,” National
Interest, Summer 2003, pp. 93–94.
355. See Sutter, Chinese Foreign Policy, p. 238. Sutter notes that China did not have
any great security or other concerns with the area at the time.
356. “China Announces Initiatives to Expand Ties with PIF Member Countries,”
Embassy of the People’s Republic of China in Papua New Guinea, November
24, 2003, cited in “Sino-Pacific relations,” Wikipedia (viewed August 2011).
357. Directions in China’s Foreign Relations: Implications for East Asia and Australia
(Canberra: Parliamentary Library Research Brief, December 5, 2003),
pp. 51–54.
358. “Premier Wen Visits 4 Countries, Attends Forum,” China View, April 5, 2006
(online at www.chinaview.cn). See also Document 1 in Wesley-Smith and
Porter (eds.), China in Oceania, pp. 198–201.
359. Mathew Dornan, Denghua Zhang, and Philippa Brant, “China Announces
More Aid, and Loans, to Pacific Islands Countries,” Devpolicyblog
(Development Policy Center), November 13, 2013 (online at devpolicy.org).
258 ● Notes
360. See “China and the Pacific: The View from Oceania,” New Zealand
Contemporary China Research Centre (conference held February 25–27,
2015) (online at victoria.ac.nz).
361. Tarcisius Kabutaulaka, “Feeding the Dragon: China and Natural Resource
Development in Oceania,” paper presented at conference at the University of
Hawaii February 25–26, 2015 (online at victoria.ac.nz).
362. “PNG Governor General Visits China,” Embassy of the People’s Republic of
China in Papua New Guinea, July 28, 2003.
363. See Hank Nelson, “Chinese in Papua New Guinea,” in Wesley-Smith and
Porter (eds.), China in Oceania, pp. 111. The author notes that MCC is a
government-owned company that may or may not offset infrastructure costs
against tax concessions, has a ten-year tax holiday, and does not appear to have
to disclose its financial records as companies normally do.
364. Geoffrey York, “Papua New Guinea and China’s New Empire,” Globe and
Mail, March 31, 2009 (online at theglobeandmail.com).
365. Ibid.
366. “Concern in PNGF at Defense Training Links with China,” Radio New
Zealand, May 19, 2008, cited in “Sino-Pacific Relations,” Wikipedia (viewed
August 2011).
367. Graeme Smith, “Beyond the Reach of the Whip: Chinese Investment in Papua
New Guinea,” Africa East Asian Affairs, no date given (online at sydney.edu.au).
368. Enda Curran, “Papua New Guinea Draws Interest in Energy Projects,” Wall
Street Journal, May 8, 2013 (online at wsj.com).
369. Jemima Garrett, “Chinese Companies Make Push for Sensitive Mining
Projects in Papua New Guinea,” Australia Broadcasting Corporation, June 4,
2015 (online at abc.net.au).
370. Sandra Tarte, “Fiji’s ‘Look North’ Strategy and the Role of China,” in Wesley-
Smith and Porter (eds.), China in Oceania, p. 119.
371. Ibid., p. 121.
372. Ibid., p. 120.
373. Ibid., pp. 122–23.
374. Ibid., pp. 125–26.
375. Fergus Hanson, “Don’t Ignore the Big New Player in Fiji,” Sydney Morning
Herald , May 9, 2008, cited in “Sino-Pacific Relations,” Wikipedia (viewed
August 2011). The amount was said to have been increased from € 650,000
to 100,000,000. The Euro was worth approximately 1.5 US dollars at that
time.
376. “China Ready to Assist Fiji in Development,” The Fiji Government, May 30,
2013 (online at fiji.gov.fj).
377. Lucy Craymer, “Fiji Attracts Old Friends as China’s Clout Grows,” Wall Street
Journal, October 30, 2014 (online at wsj.com).
378. Iasi Iasi, “China and Samoa,” in Wesley-Smith and Porter (eds.), China in
Oceania, p. 153.
379. Ibid., p. 154.
Notes ● 259
380. Ibid., p. 158.

381. Ibid., p. 159.
382. “China’s Engagement in Samoa Poised for a Big Step Forward,” Pacific
Periscope, May 27, 2011 (online at pacificttadeinvst.com).
383. “Samoa Backs China’s Handling of Tibet,” Samoa Observer, March 27, 2008,
cited in: Sino-Pacific Relations,” Wikipedia (observed in August 2011).
384. Ibid., p. 154 and 158.
385. Claire Farrell, “Samoa: Will the Island Be ‘Exploited’ by Chinese Firms?” The
Foreign Report.com, June 13, 2013 (online at theforeigneport.com).
386. Nanai T. Laveiiga Tuiletufuga, “China Commits More Aid to Samoa,” Savali,
October 9, 2013 (online at savalinews.com).
387. “Samoa PM Hits Back at Opposition to China Aid,” Radio New Zealand,
January 9, 2015 (online at radionz.co.nz).
388. Palenitina Langa’oi, “China’s Diplomatic Relations with the Kingdom of
Tonga,” in Wesley-Smith and Porter (eds.), China in Oceania, p. 167.
389. Ibid., p. 168.
390. “Chinese Government Donates Military Supplies to TDS,” Tonga Now,
January 9, 2008, cited in “Sino-Pacific Relations,” Wikipedia (observed
August 211).
391. Ibid., p. 168.
392. Ibid., p. 172.
393. Ibid.
394. Ibid., p. 173.
395. Ibid.
396. Michael Brissenden, “Growing Chinese Investment in Tonga Causes Concern,”
ABC News, May 14, 2013 (online at ab.net.au).
397. Vernon Small, “Tonga Defends China’s Aid,” Stuff, May 6, 2014 (online at
suff.co.nz).
398. “China and the Pacific: The View from Tonga,” Matangi Tonga Online,
March 2, 1015 (online at matangitonga.to).
399. “South Tarawa Island, Republic of Kiribati,” GlobalSecurity.org (no date
given) (online at globalsecurity.org/space/world/china/Kiribati.htm).
400. Robert D. Kaplan, “How We Would Fight China,” Atlantic Monthly, June
2005 (online at theatlantic.com). Wesley-Smith, China in Oceania, p. 16,
however, suggests there is no good evidence to support this.
401. Anthony Van Fossen, “The Struggle for Recognition: Diplomatic Competition
between China and Taiwan in Oceania,” Journal of Chinese Political Science,
February 2007, p. 136.
402. “China Ceases Diplomatic Relations with Kiribati,” Embassy of the People’s
Republic of China in Estonia, November 29, 2003, cited in “Sino-Pacific
Relations,” Wikipedia (viewed August 2011).
403. “Kiribati and Diplomatic Relations: Whither China’s Space Program,” Stratfor
Global Intelligence, November 7, 2003.
404. Van Fossen, “The Struggle for Recognition,” p. 137.
260 ● Notes
405. Ibid. The author states that Taiwan pledged $8 million in 2003, which was
five times more than China’s allocation for that year.
406. “China Commits to Fund Vanuatu Projects,” Vanuatu Daily Post, July 23,
2010, cited in “China-Pacific Relations,” Wikipedia (viewed August 2011).
407. It bears repeating that the countries of Oceania are all small in both popu-
lation and land area. Papua New Guinea is the largest and thus received
more aid.
408. Ben Laidler, Qu Hongbi, Todd Dinivant, Simon Francis, Thomas Hilboldt,
and Andre Loes, “South-South Special: What a Globalizing China Means for
Latin America,” HSBC Global Research, November 2013.
409. Mellor et al., “China’s Investment in Latin America,” p. 61.
410. Holley Lee, “More US and Less China Could Be a Good Thing for Cuba,”
CNBC, January 6, 2015 (online at cnbc.com).
411. Albania could be considered a close and loyal Chinese ally during the period of
China’s extensive aid giving to Albania. However, there was no formal treaty
of defense between the two.
412. This has been called retributive nationalism in China. See Shambaugh, China
Goes Global, p. 56.
413. China’s strategy of acquiring global influence by expanding its control over
the international economy will be discussed in the concluding chapter of this
volume.
414. David Shambaugh, “China and Europe: The Emerging Axis,” Current History,
September 2004, pp. 243–48.
415. Shichor, The Middle East in China’s Foreign Policy, 1949–1977, p. 12.
417. Beijing Domestic Service, April 22, 1979, cited in Thomas W. Robinson,
“Sino-Soviet Competition in Asia,” in Douglas T. Stuart and William T. Tow
(eds.), China, the Soviet Union and the West: Strategic and Political Dimensions
in the 1980s (Boulder, CO: Westview Press, 1982), p. 189.
418. Shichor, The Middle East in China’s Foreign Policy, 1949–1977, p. 207.
419. Ibid., pp. 208–11.
421. Kim, “China and the Third World,” p. 146.
422. Ibid.
423. Jonathan D. Spence, The Search for Modern China (New York: W. W. Norton,
1999), p. 691.
424. See Kim, “China and the Third World,” p. 148. The author does not cite
Egypt, which is also mentioned in the section on Egypt in this chapter.
425. R. Evan Ellis, “Strategic Implications of Chinese Aid and Investment in Latin
America,” China Brief, October 7, 2009 (online at Jamestown.com).
426. Nathan and Scobell, China’s Search for Security, p. 180.
427. Ibid., pp. 146–47.
428. Michael Godley, “China: The Waking Giant,” in Ron Crocombe, Te’o
Fairbairn, Yash Ghai, et al. (eds.), Foreign Forces in Pacific Politics (Suva, Fiji:
Institute of Pacific Studies, 1983), pp. 131 and 139.
Notes ● 261
429. See Robert C. Kaplan, “How We Would Fight China,” Atlantic Monthly, June
2005, pp.
430. John Henderson and Benjamin Reilly, “Dragon in Paradise: China’s Rising
Start in Oceania,” National Interest, Summer 2003, pp. 94–104.
433. Henderson and Reilly, “Dragon in Paradise,” pp. 93–94.
434. See Schoen and Kaylan, The Russia-China Axis.
4 Summary and Conclusions

1. David Shambaugh, China Goes Global: The Partial Power (New York: Oxford
University Press, 2013), p. 61. The Foreign Ministry and some other ministries
declassify materials after 30 years, but they are often not made available and
many documents are not included in the declassification process.
2. See Charles Wolfe Jr., Xiao Wang, and Eric Warner, China’s Foreign Aid and
Government-Sponsored Investment Activities: Scale, Content, Destinations and
Implications (Santa Monica, CA: Rand Corporation, 2013), p. viii. In this
study, in contrast to others, as indicated in its title, the term used is “foreign
aid and government-sponsored investment activities.” This explains its larger
numbers and why they are close to this author’s numbers.
3. See ibid. The author’s numbers by region are also similar. There is a sizeable dif-
ference in the case of Central Asia, but that can be explained by a very recent,
large investments by China in Kazakhstan that were made after the Rand study
was published. Also included in the author’s estimates are funds China provided
to ASEAN, the SCO, and FOCAC. A recent announcement by China on its
“financial diplomacy” cites the same order of recipient regions (Asia, Africa, and
Latin America). See Pu Zhendong and Chen Weihua, “Beijing Works to Spur
Global Development,” China Daily, October 21, 2013 (chinadaily.com.cn).
4. The order of the last two would be reversed if China’s aid to Vietnam were
translated to current dollars.
5. This includes the $20 billion that China said it provided to Vietnam and the
report that half of China’s foreign aid was given to North Korea. The writer
assumes the former figure may be true. The latter is not, but may be if using a
definition of foreign aid not used elsewhere.
6. This was especially true of China’s arms aid during period one as noted in
previous chapters. It was also true of China’s financial help to North Korea
and some other countries during period two and was probably considerable.
7. Wolfe et al., China’s Foreign Aid and Government-Sponsored Investment Activity,
p. xiv. The authors state that only 9.4 percent of aid and investments have been
delivered.
8. There were many instances of this during period one of China’s foreign assis-
tance. It has not been very common during period two. The Philippines is a
noted exception.
262 ● Notes
9. In some cases the recipients have been paid less than the market value for their
resources; in some other cases it has been the opposite. This issue has been men-
tioned several times in this book. The most notable case of China paying less for
resources is its buying petroleum from Venezuela for as little as 6 dollars a barrel
(when the world market price neared 100). Under Hugo Chavez, Venezuela, of
course, gave “friendly prices” to many countries. Also China may be said to have
used some of the money to build oil refineries in Cuba, a country Venezuela
was also assisting. See Juan Pablo Cardenal and Heriberto Araujo, China’s Silent
Army: The Pioneers, Traders, Fixers and Workers Who Are Remaking the World in
Beijing’s Image (New York: Crown, 2014), p. 134. One of the most obvious cases
of China paying more than the market price was its purchase of a copper mine
in Afghanistan. However, there are a number of other instances.
10. China announced many of these tariff reductions and exemptions as noted in
previous chapters. But it has never suggested how much they are worth.
11. “China’s Foreign Aid,” Information Office of the State Council, July 2014
(online at xinhuanet.com). See Appendix.
12. Claire Provost, “China Publishes First Report on Foreign Aid Policy,”
Guardian, April 28, 2011 (online at guardian.co.uk).
13. “China’s Foreign Aid. Section VI.”
14. “China Workers Easy Prey as Growth Sends More Citizens Abroad,”
Bloomberg/Business, February 1, 2012 (online at bloomberg.com).
15. China has been importing workers in areas where the cost of labor has been
fast increasing. Some are from other countries. This is likely to increase even
though the Chinese government is worried about unemployment. Meanwhile
Chinese workers abroad are on the increase and they are sending money back
to China, though much of that money originates in China. Thus China’s
remittances are difficult to calculate as a form of aid and will probably be even
more difficult to count in the future.
16. “Rich but Rash,” Economist, January 31, 2015 (online at economist.com).
17. Various commentators viewed China’s actions as aimed at extending its com-
mercial influence globally but also directed at weakening the World Bank,
the IMF, and the Asian Development Bank. Beijing sees these organizations
as controlled by Western countries that have not allowed China much say,
especially given its economic size and might. See William Pesek, “China Steps
In as the Banker to Call in a Pinch,” Bloomberg, December 29, 2014 (online
at japantimes.com).
18. Jack Friefelder, “Currency Swap Potential Boon to Argentina,” China Daily,
September 29, 2014 (online at chinadaily.com.cn).
19. “China and Brazil Sign $30bn Currency Swap Agreement,” BBC News,
March 26, 2013 (online at bbc.news.com).
20. Shambaugh, China Goes Global, p. 69. The author notes that they do not
cooperate with Chinese government agencies to any degree even when the lat-
ter seek their help.
21. This was, as noted in Volume 2, Chapter 3, the case in China’s financial assis-
tance to Mongolia. It has been true in many other cases as well.
Notes ● 263
22. Axel Dresher and Andreas Fuchs, “Rogue Aid? On the Importance of Political
Institutions and Natural Resources for China’s Allocation of Foreign Aid,”
VOX, January 27, 2012.
23. Inflation, as just mentioned, was a factor. China overvalued its currency for a
variety of reasons. Early on China did not seek to export much, so this was not
important. Later it did. China’s currency was devalued by a quite large amount
in 1994. See Michael Pettis, Avoiding the Fall: China’s Economic Restructuring
(Washington, DC: Carnegie Endowment, 2013), p. 34.
24. This is a very controversial issue, especially in the United States, since it is
seen as the cause of US unemployment among other problems. Since China’s
trade surplus is much greater with the United States than with other coun-
tries and there is a large outflow of money from China, one would think that
China’s currency is not undervalued by much and that other economic factors
are the cause. The International Monetary Fund has stated that China’s cur-
rency is undervalued, but has not said that China is a “currency manipulator.”
See “IMF Reviews China Currency’s Value,” Wall Street Journal, January 30,
2012 (online at wsj.com). Pettis suggests it is 15–30 percent undervalued.
See Avoiding the Fall, p. 35.
25. There is an interesting twist to be made about this matter: Assuming the Yuan
has been undervalued as much as some critics say, China’s foreign aid and
investments would be considerably greater in value than the data indicate.
It has even been said that because China’s Yuan is not pegged as it should
be China has been giving $240 billion per year in foreign aid to developed
countries (including and most important the United States). Does one add
this to China’s foreign assistance data? No one has suggested this. See Stefan
Karlsson, “China’s $40 Billion in Foreign Aid,” Christian Science Monitor,
October 11, 2011 (online at csm.com).
26. This the author has estimated, using a fairly strict definition of military aid and
not considering the troops that China, provided to North Korea. See John F.
Copper, China’s Foreign Aid: An Instrument of Peking’s Foreign Policy (Lexington,
MA: D.C. Heath, 1976), p. 134. Also see John F. Copper, “China’s Military
Assistance,” in John F. Copper and Daniel S. Papp (eds.), Communist Nations’
Military Assistance (Boulder, CO: Westview Press, 1983), p. 96. The author sug-
gests a very large portion of China’s foreign aid was military aid. It needs to be
pointed out that China’s arms aid was higher during the Korean War and during
the early part of the Vietnam War and declined in the 1970s, especially in the
latter part of that decade. It needs also be noted that Communist Bloc nations
also gave a large portion of their aid in military assistance. See Daniel S. Papp,
“Communist Military Assistance: An Overview,” in Copper and Papp (eds.),
Communist Nations’ Military Assistance, pp. 1–3. See Volume 1, Chapter 1, for
a definition of military aid. Much of the aid the United States gave was con-
sidered military aid because it went to the allies and was justified on security
grounds when Congress approved it. China kept its aid to North Korea and
Vietnam secret and when mentioned it did not generally refer to it as military
aid but rather help to a “fraternal” Communist country.
264 ● Notes
27. Copper, China’s Foreign Aid, pp. 134–35; Copper, “China’s Military
Assistance”; Carol H. Fogarty, “China’s Economic Relations with the Third
World,” China: A Reassessment of the Economy (U.S. Congress Joint Economic
Committee) (Washington, DC: U.S. Government Printing Office, 1975),
p. 735.
28. This can be gleaned from the context in which China gave military aid.
Further, at the beginning of period two Chinese officials said that “friend-
ship prices” had to be generally discontinued. At this time, China began to
show its arms at exhibitions, at international arms trade fairs, and began to
advertise its weapons. The Chinese official’s statement was in a newspaper
article in the Wall Street Journal, cited in Anne Gilks and Gerald Segal, China
and the Arms Trade (London: Croom Helm, 1985), p. 1.
29. Andrew J. Nathan and Andrew Scobell, China’s Search for Security (New York:
Columbia University Press, 2013), pp. 182–83.
30. Ibid., p. 182.
31. Ibid.
32. Daniel L. Byman and Roger Cliff, China’s Arms Sales: Motivations and
Implications (Santa Monica, CA: Rank Corporation, 1999), p. 29.
33. Ibid., p. 30. Through military sales Beijing also helped finance its own mili-
tary by bringing down the unit cost of weapons while facilitating the develop-
ment of technology in China.
34. Another reason was that the government used money made from military sales
to finance its military so that it did not divert too much money from economic
development.
35. China was much less reluctant to provide help to other countries to develop
missiles than nuclear bombs for understandable reasons.
36. Shambaugh, China Goes Global, pp. 302–3. Of course, there persisted prob-
lems associated with China exporting prohibited arms and weapons technol-
ogy. Chinese leaders attributed this to its companies not abiding by the rules
or unclear rules.
37. The main reason to believe this is that it can be convincingly argued that
it is in China’s interest to do so. See Nathan and Scobell, China’s Search for
Security, p. 274.
38. See “Adherence to and Compliance with Arms Control, Nonproliferation and
Disarmament Agreements and Controls,” Department of State, August 2012
(online at state.gov).
39. Shambaugh, China Goes Global, pp. 301–2. The author cites the Stockholm
International Peace Research Institute, the U.S. Congressional Research
Service and the U.S. Department of Defense.
40. These were Algeria, Argentina, Bangladesh, Benin, Bolivia, Cambodia, Chad,
Columbia, Congo, Ecuador, Egypt, Gabon, Ghana, Indonesia, Iran, Kenya,
Laos, Malaysia, Mexico, Myanmar, Namibia, Nepal, Niger, Nigeria, Pakistan,
Peru, Rwanda, Saudi Arabia, Sierra Lone, Sri Lanka, Sudan, Tanzania,
Thailand, Timor Leste, Turkey, Uganda, Venezuela, Zambia, and Zimbabwe.
See “Global Transfers of Major Conventional Weapons Sorted by Supplier
Notes ● 265
(Exporter) 2006–2010,” Stockholm International Peace Research Institute,

cited in Shambaugh, China Goes Global , p. 303.
41. Byman and Cliff, China’s Arms Sales, pp. 4–5.
42. Nathan and Scobell, China’s Search for Security, p. 183. One of the main
reasons for not providing much training early on was that Chinese weapons
did not require detailed instructions on their use. Currently this is much less
true.
43. Ibid., p. 182.
44. Ibid., p. 183.
p. 204.
47. Ibid.
48. Wolfe et al., China’s Foreign Aid and Government-Sponsored Investment
Activities, p. 22.
49. Pu and Chen, “Beijing Works to Spur Global Development.”
50. “Great Wall Builders,” Economist, October 27, 2012 (online at economist.
com). The article cites the magazine International Construction as its source.
51. Ibid.
52. Brahma Chellaney, “China Remains the World’s Biggest Dam Builder at
Home and Abroad,” Indiatoday.in, December 16, 2011 (online at indiatoday.
intoday.in).
53. Ibid.
54. “CNPC: China to See Rapid Expansion of Pipelines in the Next 5–10 Years,”
Xinhua, October 24, 2012 (online at xinhuanet.com).
55. Rita Tubb, “2012 Worldwide Pipeline Construction Report,” Pipeline and Gas
Journal, January 2012. Seventy-five percent of the pipelines are for gas.
56. Jasmine Wang, “China Rail-Builders’ Profits Fall as Construction Slows on
Crash,” Bloomberg, August 30, 2012 (online at bloomberg.com).
57. Ibid.
58. China is predicted to pass Siemens in three to four years and Alstom in ten
(two of the world’s largest). Having the world’s largest home market, larger
than the rest of the world combined, recently, China can no doubt “go out”
with its work. See “4rail.net-lSuper High Speed Trains—Manufacturers,”
Railroad reference, no date provided (online at 4rail.net).
59. Bridgette Meinhold, “China to Connect Its High Speed Rail All the Way to
Europe,” Inhabitat, March 15, 2010 (online at inhabitat.com).
60. Copper, China’s Foreign Aid, p. 44, 49, 50–51, 58–59, 63,74, 78–85, 101,
148.
61. “Road-Building Rage to Leave U.S. in Dust,” Wall Street Journal, January 18,
2010 (online at wsj.com). As of 2010 China had built 46,000 miles of highway,
just a 1,000 short of the United States and was planning to almost double that
amount by 2020. Chinese officials also noted that China had built most of the
national highways in the last five years whereas the United States spent more
than 30 years building its highway system.
266 ● Notes
62. For details see Deborah Brautigam, The Dragon’s Gift: The Real Story of China
in Africa (New York: Oxford University Press, 2009), chapters 9 and 10.
63. Elizabeth Economy and Michael Levi, By All Means Necessary: How China’s
Resource Quest Is Changing the World (New York: Oxford University Press,
2014), p. 64.
64. Ibid.
65. David H. Shinn and Joshua Eisenman, China and Africa: A Century of
Engagement (Philadelphia: University of Pennsylvania Press, 2012), p. 151.
66. Economy and Levi, By All Means Necessary, pp. 29–32.
67. Li Jia, “Superbowl,” News China, April 2014, p. 10. One of the problems the
author mentions is that harvests have lagged behind consumption for a num-
ber of years. He also notes that China imports 80 percent of its soybeans, most
of that from the United States.
68. China’s trade surplus in agricultural goods in 2001 of $4.2 billion by 2004
was a deficit of $4.64 billion. That year the China Agricultural University
opened the China Food Security Research Centre. See David Lampton, The
Three Faces of Chinese Power : Might, Money, and Minds (Berkeley: University
of California Press, 2008), p. 243.
69. It is said that 15 percent of China’s land is only marginally for agriculture due
to some kind of pollution. Bloomberg reports that 2 percent cannot be used.
The government recently published a study noting that an area the size of
Belgium is too polluted to grow crops and that 28,000 rivers have disappeared
since 1990. See Frances Martel, “Pollution in China’s Farmlands Triggers Food
Security Concerns,” Breitbart, January 4, 2014 (online at breitbart.com).
71. “China’s Foreign Aid,” Part III.
72. Lampton, The Three Faces of Chinese Power, p. 94.
74. Kurt Muller, The Foreign Aid Programs of the Soviet Union and Communist
China: An Analysis (New York: Walker and Company, 1964), p. 234.
75. See Shinn and Eisenman, China and Africa , pp. 150–51.
76. Western aid in this realm has been harshly criticized for its lack of effective-
ness. See William Easterly, The White Man’s Burden: Why the West’s Efforts to
Aid the Rest Have Done So Much Ill and So Little Good (New York: Penguin,
2006), pp. 3–5.
77. Shino Watanabe, “China’s Foreign Aid,” in Hyo-sook Kim and David M.
Porter (eds.), Foreign Aid Competition in Northeast Asia (Sterling, VA:
Kumarian Press, 2012), p. 60.
78. Copper, “China’s Military Assistance,” in Copper and Papp (eds.), Communist
Nations’ Military Assistance, pp. 96–97. That the United States had never failed
to win any war was, of course, more perception than reality. But it was a widely
held view.
79. According to one author, it can be said that Chinese (and Soviet) aid spe-
cifically contributed to the fall of Diem Bien Phu on May 7, 1954, the fall of
Saigon on April 30, 1975, the fall of the Lon Nol government to the Khmer
Notes ● 267
Rouge and the Sihanouk government on April 17 that year, and the fall of Laos
to the Communist Pathet Lao on May 14. See Vang, Five Principles of Chinese
Foreign Policies, pp. 216–17.
80. Nathan and Scobell, China’s Search for Security, p. 17. The authors note, how-
ever, that China also has significant “alignments” with Pakistan and Myanmar,
both of which have also been major recipients of China’s arms aid.
81. The Kremlin’s defeat in Afghanistan, of course, happened for a variety of
reasons, China’s aid to the Afghan rebels being only one of them. Yet the
defeat was in a number of ways similar to the US defeat in Vietnam. Certainly
Moscow’s position on arms agreements, its fading image in the Communist
world (as witnessed by it no longer claiming undisputed ideological leader-
ship), and its negotiations to improve relations with China are very similar.
See Sutter, Chinese Foreign Relations: Power and Policy Since the Cold War
(third edition) (Lanham, MD: Rowman and Littlefield, 2010), pp. 271–72.
82. The anticipation of a multipolar world is the most common view. A bipolar
view is expressed in the idea of Chinamerica and G-2 and the Beijing Consensus
versus the Washington Consensus. The unipolar view is expressed in Martin
Jacques, When China Rules the World: The End of the Western World and the
Birth of a New Global Order (London: Allan Lane, 2012).
83. Copper, China’s Foreign Aid, pp. 118–17. The Soviet Union, of course, did not
accept this.
84. China has become admired and emulated in the Third World as a result of the
growing “Beijing Consensus.” See Stefan Halper, The Beijing Consensus: How
China’s Authoritarian Model Will Dominate the Twenty-First Century (New
York: Basic Books, 2010), p. 232. The author notes China’s advances in soft
power. In addition China has become a model for Third World countries that
are disappointed with democracy and have abandoned it or are looking for
another model. See Joshua Kurlantzick, Democracy in Retreat: The Revolt of the
Middle Class and the Worldwide Decline of Representative Government (New
Haven, CT: Yale University Press, 2013), chapter 7.
85. Bruce A. Elleman and Clive Schofield, “Introduction,” in Bruce A. Elleman,
Stephen Kotkin, and Clive Schofield (eds.), Beijing’s Power and China’s Borders:
Twenty Neighbors in Asia (Armonk, NY: M. E. Sharpe, 2013), p. 3.
86. Ibid., p. 9.
88. This connection was stated clearly in Volume 1, Chapter 3. It has been made
more recently by other analysts. See, for example, Wolfe et al., China’s Foreign
Aid and Government-Sponsored Investment Activities, p. xiv.
89. Nathan and Scobell, China’s Search for Security, p. 276. The authors note that,
unlike rising powers in the past, China has not shown much of a tendency to
compete with others as to create interdependence and a new global economic
system. This point will be pursued later in this chapter.
90. Thomas G. Moore and Dixia Yang, “Empowered and Restrained: Chinese
Foreign Policy in the Age of Economic Interdependence,” in Lampton (ed.),
The Making of Chinese Foreign and Security Policy, pp. 221–22.
268 ● Notes
91. Anup Shah, “Foreign Aid for Development Assistance,” Global Issues, April 8,
2012 (online at globalissues.org). At the same time Western countries were
increasingly overpricing their goods, much aid money was being lost to cor-
ruption, and protectionism increased markedly.
92. Larry Elliot, “Why the Golden Era for Overseas Aid Is over—for Now,”
Guardian, April 4, 2011, and Mark Tran, “Drop in Aid Shows Declining
Will for Global Partnership on Development,” Guardian, September 20, 2012
(online at guardian.co.uk).
93. See John F. Copper and Ta-ling Lee, Coping with a Bad Global Image (Lanham,
MD: University Press of America, 1997), pp. 167–68.
94. Richard Gowan and Flanziska Brantner, “A Global Force for Human Rights?
An Audit of European Power at the UN,” European Council on Foreign
Relations, September 2007, pp. 1–2 and pp. 24–25.
95. Stefan Halper, The Beijing Consensus: How China’s Authoritarian Model Will
Dominate the Twenty-First Century (New York: Basic Books, 2012), p. 116.
96. Richard Spencer, “Hillary Clinton: Chinese Human Rights Secondary to
Economic Survival,” Telegraph, February 20, 2009 (online at telegraph.co.uk).
Many observers noted a huge change in Hillary Clinton’s attitude from when
she attended the women’s conference in Beijing in 1995.
97. Chang Qing, “Chinese Foreign Minister Tours Africa,” Beijing Review, August
28, 1989, p. 14.
99. Halper, Beijing Consensus, p. 116.
100. The details are in Volume 2, Chapter 1.
101. Kavi Chongkitavorn, “The South China Sea Will Be Next Dispute to Top Asean’s
Agenda,” The Nation, March 22, 2010 (online at www.nationmultimedia.com).
102. One may even speculate that border agreements with Russia in 1991, a supple-
mentary agreement in 2004, and a protocol agreement in 2008 were influ-
enced by China’s ability to buy weapons and other goods from Russia at a time
when its economy was not in good shape.
103. Taiwan gained three during this period, so the net gain for China was five.
104. The United States called the law “unnecessary.”
105. These include Belarus, Cambodia, Cuba, Ethiopia, Indonesia, Nepal,
Pakistan, and Uzbekistan.
106. The only country to establish diplomatic relations with Beijing after 2008 was
South Sudan, shortly after it became independent. Beijing did not try to strip
more countries away from Taipei because it perceived it did not need to; in
any event it did not make any efforts in this direction, though it might have
easily. This reflected Taipei’s declaring an end to the diplomacy war. The end
of independence as a viable issue in Taiwan seemed quite apparent after the
opposition Democratic Progressive Party lost the presidential and legislative
elections in 2008 and again in 2011. See John F. Copper, The KMT Returns
to Power, p. 232.
107. Stephanie Hanson, “China, Africa, and Oil,” Backgrounder—Council on
Foreign Relations, 2009, p. 3 (online at crf.org).
Notes ● 269
108. Dibasa Moyo, Dead Aid: How Aid Is Not Working and How There Is a Better
Way (New York: Farrar, Straus and Giroux, 2009), chapter 4 and pp. 103–6.
109. Mohamed A. El-Erin, “Into Africa: The New Normal,” Foreign Policy, May/
June 2013, pp. 29–30.
111. See “Not Always with Us,” Economist, June 1, 2013, p. 23.
112. Toh Han Shih, “China’s Formula to Reduce Poverty Could Help Developing
Nations,” South China Morning Post, March 29, 2013 (online at scmp.com).
Mentioned especially are China’s capitalist model in agriculture, its cancelling
debts, and reducing tariffs.
113. See Chin-hao Huang, “China’s Renewed Partnership with Africa: Implications
for the United States,” in Robert I. Rotberg (ed.), China into Africa: Trade,
Aid, and Influence (Washington, DC: Brookings, 2008), p. 298. Also see “Not
Always with Us,” Economist, June 1, 2013, p. 23 The writer notes the strong
connection between growth and poverty elimination and states that it has
been faster during the later years. He or she does not make the claim that
China has been the cause; but the timing certainly suggests this.
114. See Halper, The Beijing Consensus, p. 71.
115. Watanabe, “China’s Foreign Aid,” in Kim and Potter (eds.), Foreign Aid
Competition in Northeast Asia, p. 69.
116. The reader is reminded of the fact that the West destroyed China’s tribute
system in the 1800s and China did not make any serious efforts to restore it.
Also China did not engage in foreign aid giving in any meaningful sense until
1950.
117. The reader is reminded that, as noted in Volume 1, Chapter 2, Mao’s ideol-
ogy was revolutionary and reflected his intentions of creating a very new and
different China. Reference was often made to “new China.” China’s official
news agency was called the New China News Agency. For more details on
this point, see Franz Schurmann and Orville Schell (eds.), Communist China:
Revolutionary Reconstruction and International Confrontation 1949 to the
Present (New York: Vintage Press, 1967), Part I.
118. As noted in previous chapters, China gave large amounts of aid to North
Korea and Vietnam during the 1950s and when it made the transition to add-
ing non-Communist countries to its list of recipients the aid donations it made
were not large. No total figures were offered because China’s aid to North
Korea and Vietnam were not known with any precision. One writer states that
in the 1950s, 87.9 percent of China’s aid went to “neighboring” Communist
countries and 97 percent of grants for projects also went to “neighboring”
Communist countries. “Jinnianlai de Duiwai Jingji Jishu Yuanzhu Gongzuo”
(Document from the Archives of the Ministry of Foreign Affairs), July 1, 1960,
cited in Watanabe, “China’s Foreign Aid,” in Kim and Porter (eds.), Foreign
Aid Competition in Northeast Asia, p. 65.
119. It needs to be noted that Japanese foreign assistance was much more an exten-
sion of US assistance than European aid because the United States exercised
more influence over the Japanese government.
270 ● Notes
120. See Copper, China’s Foreign Aid, pp. 123–26. This point is also discussed in
Volume 1, Chapter 2.
121. Samuel B. Griffith, “The Military Potential of China,” in Alistair Buchan
(ed.), China and the Peace of Asia (New York: Praeger, 1965), pp. 65–91.
122. This point was discussed in previous chapters. Also see Peter VanNess,
Revolution and Chinese Foreign Policy: Peking’s Support for Wars of National
Liberation (Berkeley: University of California Press, 1970), p. 169.
123. Up to 1970, almost all of the countries that China provided foreign aid also
received aid from the Soviet Union. See Copper, China’s Foreign Aid, p. 119.
124. There, of course, is a caveat to be mentioned here. China’s financial aid to
Vietnam was restored during period two and had considerable favorable
impact for Beijing.
125. Michael Pillsbury, The Hundred-Year Marathon: China’s Secret Strategy to
Replace America as the Global Superpower (New York: Henry Holt, 2015),
pp. 57–58.
126. Now, of course, Sino-Cuban relations are quite good.
127. Harold C. Hinton, Communist China in World Politics (Boston, MA: Houghton
Mifflin, 1966), p. 45. The author notes that China had given up splitting the
United States and the Soviet Union and had proclaimed itself a Third World
country at this time. It should be noted that the $20 billion would be a much
larger figure if converted to current dollars.
128. Of course, relations between China and Albania now are cordial.
129. Gerald Segal, “Foreign Policy,” in David S. G. Goodman and Gerald Segal
(eds.), China in the 1990s: Crisis Management and Beyond (Oxford: Clarendon
Press, 1991), p. 180.
130. As early as 1960 Chinese leaders attending a Central Work Conference on
Foreign Affairs questioned China’s aid policies. It was said that by the early
1970s China’s aid program was seen as unsustainable. In September 1977 a
report by China’s Liaison Department on the International Economy recom-
mended that foreign aid should not exceed 4 percent of government spending
and Beijing decided to accept requests for aid only selectively. See Watanabe,
“China’s Foreign Aid,” in Kim and Potter (eds.), Foreign Aid Competition in
Northeast Asia, p. 63.
131. One of the reasons for extending aid to so many countries was that China
wanted to win diplomatic recognition to gain admission to the United Nations
and to undermine Taiwan’s external relations. Thus China’s giving aid to
many countries may not be seen necessarily as a mistake.
132. Michael B. Yahuda, China’s Role in World Affairs (Kent, UK: Croom Helm
Ltd, 1979), p. 13.
133. The complex nature of China’s aid and investment bureaucracies is explained
in Volume 1, Chapter 4. Also, see Watanabe, “China’s Foreign Aid,” in Kim
and Potter (eds.), Foreign Aid Competition in Northeast Asia, pp. 72–74.
134. David Arase, Japan’s Foreign Aid: Old Continuities and New Directions (London:
Routledge, 2012), p. 1. In recent times as China’s economy has boomed and
Japan’s has floundered Beijing’s foreign aid and foreign investments have far
Notes ● 271
exceeded Tokyo’s. In Africa, for example, recently China’s aid has exceeded
Japan’s by fivefold and its investments eightfold. “First China, Now Japan
Moves to Woo African Nations at Economic Forum,” South China Morning
Post, May 31, 2013 (online at scmp.com).
135. David M. Porter, “Japan’s Official Development Assistance,” in Kim and Porter
(eds.), Foreign Aid Competition in Northeast Asia , pp. 13–31. Japan’s aid influ-
ence, however, waned after 1998 falling from its peak by 40 percent by the
year 2012. This, of course, was the product of Japan’s poor economic perfor-
mance in the 1990s and after.
136. Currently it appears that China is making progress in dealing with Vietnam
using its economic power, but with the Philippines it is not, perhaps because
the Philippines is dealing with a problem of too much aid among other
reasons.
137. Xinjun Zhang, “China’s ‘Peaceful Rise,” ‘Harmonious’ Foreign Relations, and
Legal Confrontation—and Lessons from the Sino-Japanese Dispute over the
East China Sea,” Foreign Policy Research Institute, April 16, 2010 (online at
fpri.org).
138. Geoff Dyer, The Contest of the Century: The New Era of Competition with
China—and How America Can Win (New York: Knopf, 2014), pp. 88–98.
139. Zhang, “China’s ‘Peaceful Rise,” pp. 76 and 163.
141. Cardenal and Araujo, China’s Silent Army, pp. 51 and 53.
142. Ibid., pp. 52–53. On the other hand, China has not supported US and
European sanctions outside the rubric of the United Nations, which Beijing
views as an effort to apply extra-territoriality.
144. Cardenal and Araujo, China’s Secret Army, p. 279.
145. Ibid., p. 304. The Iranian deputy oil minister suggests a much smaller figure—
$40 billion.
146. “U.S.-China Interactions in the Middle East, Africa, and Latin America,”
in David Shambaugh (ed.), Tangled Titans: The United States and China
(Lanham, MD: Rowman and Littlefield, 2013), p. 327.
147. Brian Fishman, “Al-Qaeda and the Rise of China: Jihadi Geopolitics in a Post-
Hegemonic World,” Washington Quarterly, Summer 2011, pp. 47–62.
148. In 2011 China evacuated more than 35,000 personnel from Libya by leasing
commercial planes, ferries, and boats in nearby countries. China’s Air Force
and Navy lacked the capabilities to undertake the task. See Shambaugh, China
Goes Global, p. 285.
150. Ibid., p. 240.
151. Ibid., p. 232 and 240. This included an incident involving three Chinese
companies that had discussed $200 million in arms aid to the government of
Libya, which the Chinese government said it did not know about. Meanwhile
Chinese state-owned companies had contracted for oil purchases in rebel-
held areas.
272 ● Notes
152. Brautigam, The Dragon’s Gift, chapter 11.

153. See, for example, Moises Naim, “Rogue Aid,” Foreign Policy, March/April
2007, pp. 95–96. Naim sees China as the chief villain, but also cites Iran,
Saudi Arabia, and Venezuela.
154. Stephen Browne, Aid and Influence: Do Donors Help or Hinder? (New York:
Taylor and Francis, 2006), p. 113. In 2004, 70 percent of US aid was tied to
the purchase of American products. The percentage was even higher in the
case of Japan.
155. Ibid., pp. 123–25. OPEC aid began earlier, in the late 1970s.
156. Halper, The Beijing Consensus, p. 30. The author states that this will create a
“force multiplier” and increase China’s economic influence.
157. This issue is discussed in G. John Ikenberry, “The Future of the Liberal World
Order: Internationalism after America,” Foreign Affairs, May/June 2011,
and Amitai Etzioni and G. John Ikenberry, “Changing the Rules: Ikenberry
Replies,” Foreign Affairs, November/December 2011.
158. Some authors are convinced that China has changed or will change. See
Shambaugh, China Goes Global , chapter 8.
159. See, Zhang Weiwei, The China Wave: Rise of a Civilizational State (Hackensack,
NJ: World Century, 2012), chapter 3; Cardenal and Araujo, China’s Silent
Army, epilogue; Jacques, When China Rules the World, chapters 7 and 12.
Recently China has shown little willingness to cooperate with the Development
Assistance Committee of OECD but has been eager to work with the devel-
opment working group of the G-20. See Bonnie Glaser, “The Diplomatic
Relationship: Substance and Process,” in Shambaugh (ed.), Tangled Titans,
p. 166.
160. See Copper, China’s Foreign Aid, p. 42 and pp. 162–63.
161. Nathan and Scobell, China’s Search for Security, p. 347. China, of course, did
utilize aid and investments to counter the spread of democracy when it chal-
lenged China’s interests.
162. Paul Collier, The Bottom Billion: Why the Poorest Countries Are Failing and
What Can Be Done about It (Oxford: Oxford University Press, 2007), p. 186.
163. “Staffan I. Lindberg, “The Power of Elections in Africa Revisited,” in Staffan
I. Lindberg (ed.), Democratization by Elections: A New Mode of Transition
(Baltimore: Johns Hopkins University Press, 2009), p. 46.
164. Collier, The Bottom Billion, p. 86.
165. Lindberg, “A Theory of Elections as a Mode of Transition,” in Lindberg (ed.),
Democratization by Elections, p. 330.
166. Collier, The Bottom Billion, pp. 86–87.
167. Halper, The Beijing Consensus, p. 69.
168. See “China’s Foreign Aid Activities in Africa, Latin America and South East
Asia,” Congressional Research Service, February 25, 2009.
169. For details, see Nathan and Scobell, China’s Search for Security, pp. 326–39.
170. Nathan and Scobell, China’s Search for Security, pp. 331–39.
172. Ibid.
Notes ● 273
173. Ibid., p. 296.

174. Chinese officials do not deny that there is corruption in China and usually
admit it is a serious problem. Speaking up for China, however, one writer con-
tends that if political contributions, the costs of lobbying, and the dishonest
practices of American financial institutions were counted, corruption in the
United States would also have to be considered serious. See Zhang, The China
Wave, p. 86.
175. Cardenal and Araujo, China’s Silent Army, pp. 111–13.
176. Transparency International ranks China 29 among 30 countries surveyed for
giving bribes. The International Monetary Fund blacklisted six Chinese firms
after a six-year study on bid rigging in the Philippines. See Brautigam, The
Dragon’s Gift, p. 295.
177. Ibid., pp. 292–93.
178. Maria Hsia Chang, The Labors of Sisyphus: The Economic Development of
Communist China (New Brunswick, NJ: transaction Publishers, 1998),
pp. 119–20, and Jacques, When China Rules the World , p. 225.
179. Ibid., 112.
180. Robert McMahon, “World Bank Stalks Corruption,” Analysis Brief (Council
on Foreign Relations), April 21, 2006 (online at fr.org).
181. See David Osterfeld, Prosperity versus Planning: How Government Stifles
Economic Growth (New York: Oxford University Press, 1992), p. 209 and 204,
and David Bayley, “The Effects of Corruption in a Developing Country,”
Western Political Quarterly, December 1966, p. 727.
182. Cardenal and Araujo, China’s Silent Army, p. 123. Angola is cited as a case in
point. Also see Brautigam, The Dragon’s Gift, p. 294. The author notes that
China often puts its aid money in escrow to assure it is used properly and keeps
very good records.
183. Ibid., pp. 216–19.
184. Brautigam, The Dragon’s Gift, pp. 299–303, and Cardenal and Araujo, China’s
Silent Army, pp. 192–99.
185. The criticism of China’s environmental negligence has diminished in recent
years due to the fact the United States did not sign on the Kyoto standards.
The 2008 global recession also reduced environmental concerns globally.
See Sutter, Chinese Foreign Relations, pp. 97–99.
186. This was in 1992, at a meeting in Rio de Janeiro to develop a “Grand Bargain”
to deal with global environmental degradation. Agenda 21 was the result,
a 700-page plan for “sustainable development.” Very little happened beyond
a lot of negotiations. Thirteen years later another attempt was made at a
G-8 meeting in Scotland. The results were similar. See Robert L. Hicks,
Bradley C. Parks, J. Timmons Roberts, and Michael J. Tierney, Greening Aid?
Understanding the Environmental Impact of Development Assistance (London:
Oxford University Press, 2008), pp. 1–3.
187. See Ivan Tselichthev and Frank-Jurgen Richter, China versus the West:
The Global Power Shift of the 21st Century (New York: John Wiley, 2012),
pp. 63–66.
274 ● Notes
188. Hicks et al., Greening Aid, p. 248.

190. See Economy and Levi, By All Means Necessary, pp. 5–6.
191. Cardenal and Araujo, China’s Silent Army, chapter 6.
192. Ibid., p. 278.
194. “Flexible Friends,” Economist, April 12, 2014, pp. 27–28.
195. “The Twilight of the Resource Curse,” Economist, January 10, 2015, pp. 41–42.
The writer notes that Africa had averaged GDP growth of 5 percent for a
decade and this decreased, though not seriously.
196. Economy and Levi, By All Means Necessary, pp. 5–6 and 138–39. The authors
also note that China importing resources and using aid to find or procure them
is not new. Japan has been frequently mentioned though not so much recently.
198. “China’s Foreign Aid.”
199. Li Wuzhou and Dang Xiaofei, “China’s Outbound Investment Benefits the
World,” China Today, April 2014, p. 23.
200. Collier, The Bottom Billion, p. 120.
202. “China, Industry, the WTO and the Impact of Anti-Dumping Duties,” World
Risk Review, September 2013 (online at worldriskreview.com).
203. Cardenal and Araujo, China’s Secret Army, p. 157.
204. Ibid., p. 158.
205. Ibid., p. 154.
206. Ibid., pp. 156–57.
207. “Chinese investem na soya brasilera,” Folha de Sao Paulo, April 3, 2011, cited
in ibid., p. 318.
208. Cardenal and Araujo, China’s Secret Army, pp. 158–59.
209. China’s position is that it is giving agricultural aid mainly to improve food
production locally and in the process this makes available food exports for
China to purchase. Other aid-giving countries have frequently done this.
See Stephen Marks, “China and the Great Global Landgrab,” Pabazuka News,
December 11, 2008, and “China Says Not Pushing to Expand Farming
Overseas,” Alibaba.com, March 4, 2009, both cited in Shinn and Eisenman,
China and Africa , p. 139.
210. See Senya Ketene, “These 14 Countries Are Buying Incredible Amounts of
Foreign Land in Deals You Never Hear about,” Business Insider, May 4, 2012
(online at businessinsider.com). According to the author’s list, India is the larg-
est followed by China and the United States.
211. See Cardenal and Araujo, China’s Secret Army, pp. 164–91, and Brautigam,
The Dragon’s Gift, pp. 300–1.
212. See Cardenal and Araujo, China’s Secret Army, chapter 6.
213. Ibid., chapter 6. The most recent incident of killing workers is in Ghana’s gold
mines. See Alex Busman Baafi, “Why Are Chinese Miners Here?” GhanaWeb.
com cited in The Week, May 24, 2013, p. 15.
Notes ● 275
214. Cardenal and Araujo, China’s Secret Army, chapter 6.

215. Ibid.
216. Ibid., p. 170.
217. Joshua E. Keating, “Gun Runner No. 1,” Foreign Policy, May/June 2013,
p. 26.
218. See Copper, China’s Foreign Aid, chapter 6. This point is also discussed in
chapter 4.
219. Shambaugh, China Goes Global, p. 204. The author cites the China Statistical
Yearbook for the figure on China’s aid. He does not cite a source for the amount
of US aid.
220. “Aid Statistics,” Development Co-operation Directorate, OECD, no date
given, viewed November 16, 2011 (online at http://www.oecd.org/document
/49/0,3746,en_2649_34447_46582641_1_1_1_1,00.html).
221. Carol Lancaster, Foreign Aid: Diplomacy, Development and Domestic Politics
(Chicago: University of Chicago Press, 2007), p. 2. The author cites a DAC
report.
222. Tselichtchev and Richter, China versus the West, p. 174. The authors cites the
Wagner School for the first figure. The US figure is for 2008.
223. “Comparing Global Influence: China’s and US Diplomacy, Foreign Aid,
Trade and Investment in the Developing World,” Congressional Research
Service, August 15, 2008, p. 4.
224. “China Lending Hits New Heights,” Financial Times, January 17, 2011 (online
at ft.com).
225. The website is aiddatachina.org. See Joseph Boris, “US Researchers Aim to
Shed Light on Africa Aid,” China Daily, May 9, 2013 (online at chinadaily.
com.cn).
226. See aiddatachina.org (viewed May 20, 2013).
227. “U.S. Net International Investment Position: End of the Fourth Quarter and
Year 2012,” Bureau of Economic Analysis, U.S. Department of Commerce,
March 26, 2013 (online at bea.gov).
228. James K. Jackson, “U.S. Direct Investment Abroad: Trends and Current
Issues,” Congressional Research Service, October 26, 2012, p. 3.
229. China Global Investment Tracker; 2012, Heritage Foundation (online at heri-
tage.org/research reports). Included only were investments of $100 million or
more. See Cardenal and Araujo, China’s Silent Army, p. 5.
230. Joshua Kurlantzick, Charm Offensive: How China’s Soft Power Is Transforming
the World (New Haven, CT: Yale University Press, 2007), p. 98. The Rand study
cites China’s “aid” (defined to include foreign investments) was $189.3 billion
in 2011 compared to the United States giving $8 billion (not including aid to
Iraq and Afghanistan) and the US Export-Import Bank extending $6.3 billion
in loans. See Wolfe et al., China’s Foreign Aid and Government-Sponsored
Investment Activities, p. xiv.
231. Douglas E. Schoen and Melik Kaylan, The Russia-China Axis: The New Cold
War and America’s Crisis of Leadership (New York: Encounter Books, 2014),
p. 208.
276 ● Notes
232. Li Wuzhou, “China Eyes up the World Market,” China Today, April 2014,
p. 26.
233. Li and Zhang, “Promising Outlook on US, China Investment.”
234. US foreign investments in 2010 amounted to $328.9 billion while its total
investment was around $4 trillion. See ibid., p. 178.
235. Ibid., p. 28.
Activities, p. xii.
237. See Anoralee Saxerian, The New Argonauts: Regional Advantages in the Global
Economy (Cambridge: Harvard University Press, 2006). Also see Louise
Fawcett and Andrew Harrel, Regionalism in World Politics (London: Oxford
University Press, 2000).
238. Sixty percent of Western aid is still tied. See James Watkins, “Future of
International Aid,” Harvard International Review, Fall 2013, p. 28.
239. According to one observer, China would lose its influence among developing
countries if it adopted Western liberal economic views. See Halper, The Beijing
Consensus, p. 20.
240. Report on U.S. Humanitarian Assistance to North Koreans, United States Aid to
International Development, April 25, 2005, p. 6.
241. Mark E. Manyin, “Foreign Assistance to North Korea,” Congressional
Research Service, May 26, 2005, Summary (no page number indicated).
242. Ibid., p. 22.
243. North Korea Restricts Food Aid Monitoring, General Accounting Office Report
GAO/lNSIAD-00–34, October 1999 (online at gao.gov).
244. Donald M. Seekiongs, “Myanmar in 2009: A New Political Era?” Asian
Survey, January-February 2010, p. 50.
245. Joshua Kurlantzick, “Beijing’s Safari: China’s Move into Africa and Its
Implications for Aid, Development, and Governance,” Policy Outlook
(Carnegie Endowment for International Peace), November 2006, p. 1.
246. Matthew J. Nelson, “Pakistan in 2009: Tackling the Taliban?” Asian Survey,
January-February 2010, p. 122.
247. China’s gross domestic product, according to the International Monetary
Fund, is more than threefold that of Brazil and more than fourfold that of
India. Its aid and foreign investments is manifold in these two countries and
the others cited.
248. Alexander Bernard, “For US Foreign Aid, Better Strategy Is the Answer,”
World Policy Review, December 9, 2011 (online at worldpoliticsreview.
com).
249. Ibid.
250. For an examination of the broader implications of this situation, see Economy
and Levi, By All Means Necessary.
251. Bernard, “For US Foreign Aid, Better Strategy Is the Answer.”
252. Joseph O’Keefe, “Aid—From Consensus to Competition?” (paper presented at
the Brookings Institution on August 3, 2007) (online at brookings.edu).
253. Hicks et al., Greening Aid? p. 248.
Notes ● 277
254. Ibid., p. 166.

255. Tselichtchev and Richter, China versus the West, p. 167.
256. Thomas Friedman and Michael Mandelbaum, That Used to Be Us (New
York: Picador, 2012), pp. 196–97.
257. Ibid., p. 197. In 2008, the United States was the world’s leader in investment
and financing clean energy. In 2009, China took the lead with $54 billion in
promoting clean energy. The authors note that in the new century the United
States has underinvested in energy at a time when China recognized the prob-
lem and began to invest heavily in wind, solar battery, and nuclear power
(p. 155).
258. “China’s ‘Green Aid’ Offers Lessons for the World,” Worldwatch Institute,
April 29, 2011 (online at blogs.worldwatch.org).
259. Hicks et al., Greening Aid, p. 264.
260. Ibid.
261. See “Great Wall Builders,” Economist, October 27, 2012 (online at economist.
com). China boasts of the top four construction companies in the world based
on the value of their work and has five of the top seven.
262. “The Gated Globe,” Economist, October 12, 2013, p. 3 (a special report on the
world economy).
263. This is especially noticeable in Africa. In 2009, China announced that it
would grant zero-tariff treatment to 60 percent of the exports of less developed
countries in Africa with diplomatic ties with China and would increase that
to 95 percent in the future. See “The New Eight-Point Plan China Pledged at
the Fourth FOCAC Ministerial Conference,” Xinhua News, November 2009
(online at xinhuaenglishnews.cn).
264. “China Takes Over As Top Trading Partner,” Investors Insight, December 4,
2012 (online at investorsinsight.com).
265. Shambaugh, China Goes Global , pp. 126–28.
266. Ibid., p. 125.
268. Ibid., p. 191.
269. See Ansuya Harjami, “Yuan to Supersede Dollar as Top Reserve Currency:
Survey,” CNBC, February 26, 2014 (online at cnbc.com). The author sur-
veyed a number of top financial people and investors and found that 53 percent
believed this.
270. Joseph S. Jr. Nye, The Future of Power (New York: Public Affairs Press, 2011),
p. 180.
271. For this not to happen China’s per capita income would have to remain at a level
of one-tenth that of the United States That is very unlikely by any reckoning.
272. Notwithstanding the many Western critics of China that see a gap between
China’s economic development and its political modernization, some espouse
quite a different view. One writer notes that the legitimacy of the Chinese
state depends on its “millennial foundations” rather than an electoral mandate
and that it is highly competent and probably superior to others. In fact, he
states it may have a powerful influence on the rest of the world in the future.
278 ● Notes
See Jacques, When China Rules the World, p. 425. The well-known US-based
Chinese scholar Minxin Pei, who advocates democracy in China and is a critic
of the Chinese political system, admits that the Chinese Communist Party
has “consolidated” its rule and has forestalled pressure for greater freedoms.
Minxin Pei, China’s Trapped Transition: The Limits of Developmental Autocracy
(Oxford: Oxford University Press, 2010), p. 207.
273. See Roger C. Altman and Richard N. Hass, “America’s Profligacy and
American Power,” Foreign Affairs, November/December 2010, p. 66.
274. Ibid.
275. Harjani, “Yuan to Supersede Dollar.”
276. As noted earlier this point is developed by Amy Chua in The World on Fire:
How Exporting Free Market Democracy Breeds Ethnic Hatred and Global
Instability (New York: Doubleday, 2003).
277. As mentioned in Chapter 3, John Naisbitt makes this point in his book
Megatrends Asia: Eight Asian Megatrends That Are Reshaping Our World (New
York: Simon and Schuster, 1996).
278. Zhang, The China Wave, p. 135.
279. Cardenal and Araujo, China’s Silent Army, p. 30. The authors say that China’s
emigration is increasing because millions in China are leaving rural areas to
move to the cities and they see even better opportunities abroad. The Chinese
government encourages this in order to alleviate unemployment and conquer
markets globally.
280. Ibid. The authors state that for those leaving China, “You never stop being
Chinese, however far you are from China.”
281. This is reflected in the term “tiger mother” to describe it. See Amy Chua,
Battle Hymn of the Tiger Mother (New York: Penguin, 2011).
282. This has long been true. See Orville Schell and John Delury, Wealth and
Power: China’s Long March to the Twenty-first Century (New York: Random
House, 2013), pp. 47, 57, and 59. Various recent studies confirm this connec-
tion. See, for example, the research done by the Lumina Foundation (online at
luminafoundation.org).
283. See “Georgia on Their Minds,” Economist, February 21, 2015, p. 42. At the
end of 2013 there were 1.1 million Chinese students studying abroad, more
than from any other country. This was triple the number a decade earlier.
Currently many more are undergraduate students; one-third of foreign stu-
dents get a BA or BS degree in the United States.
284. As noted earlier annual increases in R&D spending in China approach 20 per-
cent; in the United States, Europe, and Japan the figure is around 3 percent.
285. See Lampton, The Three Faces of Chinese Power, chapter 4.
286. Lee, What the U.S. Can Learn from China , pp. 30–37.
287. Raghuram G. Rajan, Fault Lines: How Hidden Fractures Still Threaten the
World Economy (Princeton, NJ: Princeton University Press, 2011).
288. See Michael Pettis, The Great Rebalancing: Trade, Conflict, and the Perilous
Road ahead for the World Economy (Princeton, NJ: Princeton University Press,
Notes ● 279
2013), and Michael Pettis, Avoiding the Fall: China’s Economic Restructuring
(Washington, DC: Carnegie Endowment for International Peace, 2013).
289. Pettis predicts that China will experience 3 percent growth in the GDP during
its “period of adjustment.” This, of course, is way below the 7 percent widely
seen as necessary to absorb China’s citizens looking for a job. See ibid., p. 189.
290. See Daniel Alpert, The Age of Oversupply: Overcoming the Greatest Challenge to
the Global Economy (New York: Portfolio/Penguin, 2013), chapters 14 and 15;
Pettis, Avoiding the Fall, chapters 5, 6, and 7.
291. Ibid., p. 65.
292. Ibid. Conclusion and Epilogue. The author agues that China has become the
dominant economy in the world and the West must adopt policies in recog-
nition of this. An interesting twist on the argument that as China’s econ-
omy matures, because of the cost factor, China will become a source of large
amount of remittances (as a form of foreign aid) from its foreign workers. See
Lancaster, Foreign Aid: Diplomacy, Development and Domestic Politics, p. 224.
293. Zhang, The China Wave, p. 53.
294. Graham Allison and Robert D. Blackwell with Ali Wyne (interviews done and
selections taken by), Lee Kuan Yew: The Grand Master’s Insights on China, the
United States, and the World (Cambridge: MIT Press, 2013), pp. 2–3.
295. Jacques, When China Rules the World , chapter 11.
296. Kissinger, On China, p. 498.
297. William A. Callahan, China Dreams: 20 Visions of the Future (Oxford: Oxford
University Press, 2013), chapter 1.
298. Ibid., pp. 44–49.
299. Ibid., pp. 52–57.
300. This view was advanced most cogently by Zheng Bijian who had the ear of
Chinese leaders more than most political thinkers or pundits at that time.
301. Jason Dean, James Areaddy, and Selna Ng, “Chinese Premier Blames Recession
on U.S. Actions,” Wall Street Journal, January 29, 2009.
303. Roger C. Altman, “The Great Crash, 2008,” Foreign Affairs, January/February
2009.
304. These were the words of John Williamson. See Kurlantzick, Democracy in
Retreat, p. 119.
305. Robert D. Kaplan, The Revenge of Geography: What the Map Tells Us about
Coming Conflicts and the Battle against Fate (New York: Random House, 2012),
pp. 188–89. The author cites Alfred MacKinder “The Geographical Pivot of
History” and Democratic Ideals and Reality.
306. Kaplan, The Revenge of Geography, p. 196.
307. See Nathan and Scobell, China’s Search for Security, chapter 11. The authors
note that China will likely not catch up with the United States in naval strength
until 2050, p. 315. It will take longer for China to surpass the United States
in total military strength notwithstanding its ability to spend more. China is
competing with the United States (and the world) in other ways much easier.
280 ● Notes
308. Ibid., p. 317.

310. Ibid., pp. 254–55.
311. Chinese are acutely aware of this. As one writer notes: “The burning of the
‘treasure fleet’ became a symbol of the introspection and stagnation that even-
tually brought down imperial China in the early twentieth century.” See Dyer,
The Contest of the Century, p. 76.
312. National Bureau of Statistics of the People’s Republic of China, cited in ibid.,
p. 5.
313. “Trade with the World,” Economist, February 16, 2013, p. 48. There 192
members of the United Nations. Some say there are 196 nations.
Activities, p. 167.
315. Ibid., p. 8.
316. Patricia Rey Mallen, “Is Partnership between China and Latin America Paying
Off?” International Business Times, May 8, 2014 (online at ibtimes.com).
317. Don Rodney Ong Juinio, “Asian Infrastructure Investment Bank: An Idea
Whose Time Has Come?” The Diplomat, December 4, 2014 (online at the
diplomat.com).
318. Ibid.
319. “Why China Is Creating a New ‘World Bank’ for Asia,” Economist ,
November 11, 2014.
320. Pepe Escobar, “The 21st Century Belongs to China: Why the Silk Road
Threatens to End America’s Economic Dominance,” Tom Dispatch, February
24, 2015 (online at group.google.com).
321. “Bank Deposits in China from 2003 to 2013,” Statistica (online at stastica.
com—viewed on February 25, 2015).
Selected Bibliography for
Volume III
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Index
above-market prices for goods, 147 wars of national liberation, China’s

Abuja Rail Mass Transit System, support for, 2–3
Nigeria, 78 wars of national liberation, in
Abuja Sports Complex, Nigeria, 65 Ghana, 6
Afghanistan, taking aid work from Africa (late 1960s–70s), 18–23
Western countries, 192 aid competition, with Soviet Union
Africa (1950s-early 60s), 3–9 in Somalia, 19–20
aid to (late 1970s–80s), 51 aid competition, with Soviet Union
aid workers’ standard of living, 4 in Sudan, 21
colonialism, 3 diplomatic recognition of China, 18,
diplomatic recognition of China, 3 20, 22
foreign aid successes, diplomatic foreign aid successes, diplomatic
recognition of China, 3 recognition of China, 18, 20, 22
imperialism, 3 military aid, to Angola through
military aid, to Ghana, 5, 6 Zaire, 22
military aid, to Guinea, 5 military aid, to Sudan, 21
military aid, to Mali, 8 military aid, to Zaire, 22
military aid, to Republic of the road-building aid, 19
Congo, 9 Africa, economic growth from China’s
nuclear development and aid, 165–6
capabilities, Ghana’s support for African Development Bank, 16, 84–5
PRC’s nuclear testing, 6 African National Congress, 31, 47
nuclear development and African policies, new, 44–50
capabilities, Mali’s support for aid competition with Soviet
PRC, 7 Union, 45
Nuclear Test Ban Treaty, Mali’s aid competition with West in
support for PRC, 7 Africa, 44
prestige projects in Guinea, 4–5 donor fatigue, 48
radio stations, aid for, 9 five point proposal, 48
Seven Year Plan (Ghana), 6 foreign exchange China’s African
small-project tenet of foreign aid, 4 Policy and, 49
296 ● Index
African policies, new—Continued conflation of, 150–1

Four Principles in Economic and definitions of aid, 143–4
Technological Cooperation, 47 disclosures, 143
human rights abuses, 47–8 financial help to organizations, 148
reasons for, 44–7 inflation and currency valuation
six pillars plan, 49 factors, 151
socialism in Africa, 47, 50–1 nuclear weapons assistance, 146–7
South-South friendship and aid, 49 pledged aid, undelivered, 147
tariff reductions and relief, 44 as profitable, 150
wars of national liberation, support tariff reductions and relief, 147
abandoned under Deng, 45 undelivered pledged aid, 147
African Union, 49, 74, 89 United Nations, aid to, 149
African Unity Commission, 57 World Bank, 149
Afro-Asian Conferences See also debt forgiveness/debt relief
aid to Congo-Brazzaville for aid categories summary, 83–5
support at, 8 aid competition
aid to Ghana for support, 6 end of aid contest with Taiwan, 165
aid to Kenya for support, 23 fading interest in, 45
aid to Tanzania for support, 11 with Soviet Union, 160–1
aid to Yemen and, 109 with Soviet Union in Africa, 15,
in Algeria, 108 35–6
as arms transfer country, 33 with Soviet Union in Albania, 93–4
energy search and aid, 69 with Soviet Union in Moldova, 100
Mali’s support for PRC, 7 with Soviet Union in Somalia,
National Liberation Front, 31 19–20
Pan-Africanist Congress, 48 with Soviet Union in Southern
SEZ in, 62 Yemen, 110
Sino-Soviet aid competition at, 170 with Soviet Union in Sudan, 21
Sino-Soviet feud and, 36 with Soviet Union in Yemen, 109
war of national liberation, 3 with Soviet Union to competing
Zambia’s vote on, 13 groups, 31
Zhou met with Nasser, 105, 106 with Taiwan in Macedonia, 99
Afro-Asian Journalists Association, 35 with Taiwan in Oceania, 129–30
Afro-Asian People’s Solidarity with Taiwan in Papua New Guinea,
Council, 35 132
Afro-Asian People’s Solidarity for Tan-Zan Railroad, 168
Organization, 35 with West in Africa, 44
Afro-Asian Solidarity Fund, 33 Western-Communist Bloc
agricultural aid, 53, 157–8 competition, 163
AID (US Aid to International aid estimates, 81–2, 187–90
Development), 190–1 aid giving
aid and investments, magnitude of, aid giving standards, adherence to,
143–51 175–6
above-market prices for goods, 147 for ideological reasons, 168
assessment difficulties, 150 in weak economy, 167
Index ● 297
aid types, 151–9 Al-Qaeda, 174

agricultural aid, 157–8 Amnesty International, 73
amounts recap, 144–5 Anglo-Canadian consortium, railroad
dam building, 155–6 financing attempts, 16
economic aid, 154–7 Angola, 69–71
hydropower development, 155–6 aid without conditions, 70
medical aid/missions, 159 Angola mode, 70
military aid, aid vs. sales, 151–4 bad governance, promotion of, 178
oil/petroleum, pipeline construction, Benguela Railroad, 77–8, 79
156 civil war, 22, 120
railroad construction, 156 corruption in, 70–1
road-building aid, 157 dispute with Namibia, 51
special economic zones (SEZs), 157 energy search and aid, 69
aid without conditions human rights abuses, 178
in Africa, 1–2 IMF talks broken off, 191
bad governance, promotion of, 176–8 investment vs. aid designation, 70
“China’s African Policy” paper, 86 railroad building and rehabilitation, 78
corruption and, 180 relationship history with China,
environmental standards and, 181 69–70
human rights abuses and, 178–9 revolution supported by China, 32
policy change in Sudan, 74 taking aid work from Western
praised in FOCAC meeting, 59 countries, 192
in Tanzania, 12 Tiananmen Square incident, 47, 89
aid workers’ standard of living, 4 wars of national liberation support, 31
AidData, 82 Angolan National Agency for Private
AIIB (Asian Infrastructure Investment Investment, 70
Bank), 205 anti-Cuban aid in Africa, 28
Albania Anti-Succession Law, 89, 165
aid competition with Soviet Union, Antofagasta Minerals, 126
93–4 Arab Spring movement, 114, 119, 137,
as aid failure, 170 174
aid terminated (1978), 95–6 Arafat, Yasser, 111
Five Year Plan, 93 Argentina
period one aid, 92–6 aid to, 125
Albanian Resolution, 25, 95, 110 land acquisition in, 184
Alesana, Tofilau Eti, 133 arms aid. See military aid
Algeria ASEAN (Association of Southeast
aid to, period one, 107–8 Asian Nations), 148, 172, 190
aid to, period two, 118 Asian Development Bank, 149, 193, 205
as Western and Soviet aid recipient, Asian financial crisis, 162–3
108 Asian Infrastructure Investment Bank
Algerian National Liberation Front (AIIB), 205
(FLN), 107 Asian pivot, 102, 124, 172
all-Africa railroad proposal, 78 Associated Press, on China as trading
Allende, Salvador, 121 partner, 204
298 ● Index
Association of Southeast Asian Nations BRICS ( Brazil, Russia, India, China,

(ASEAN), 148, 172, 190 South Africa), 127–8, 150, 175–6
Aswan Dam, 105 Brigham Young University, aid website,
188
bad governance, promotion of, 175, Burma
176–8 bad governance, promotion of, 178
Bagamoyo Economic Zone, 67–8 human rights abuses, 178
Bahamas, aid to, 128 labor conditions and laws abuse, 185
Bandung Conference, 139 Burundi
Bangkok Declaration, 90, 163, 179 aid to, 26
Bank of China, 134 Bagamoyo Port access, 68
Bay of Pigs invasion, 120 dams and hydropower plants, 80
Beibu Gulf Declaration, 172 deteriorated relations with PRC, 24
Beidahuang State Farms Business Bush (G. W.) administration, AID
Trade Group, 184 officials urged joint aid giving,
Beijing Action Plan, 60 190–1
Beijing Consensus (China model), 167, Bush Doctrine, 201
177, 203
Beijing Declaration of the Forum on Cai Jinyong, 195
China-Africa Cooperation, Cairo International Conference Center,
56, 60 113
Beijing Investment Zhao YiLi Cameroon
Management Company, 133 aid to, 26–7
Belarus, aid to, 103–4 dams and hydropower plants, 80
Belinga-Santa Clara Railway, Gabon, 78 timber as natural resource, 74
Ben Bella, Ahmed, 108 Cape Verde, Li’s visit, 50
Benguela Railroad, Angola, 77, 79 capitalism as spur to China’s economic
Berger, Sandy, 115 growth, 197
Bolivia, as caudillo socialist country, Castro, Fidel, 119–20, 170
126 caudillo socialist countries, 126
border agreements, 161, 164–5, 172 Central African Republic, deteriorated
Botswana relations with PRC, 24
aid to, 27 Central Intelligence Agency, on China’s
loan agreements, 54 aid to Brazzaville, 9
brain drain/talent poaching by West, Chad
52, 87 aid to, 27
Brazil civil war in, 51
aid to, 125, 127–8 communications networks, 80
land acquisition in, 184 challenges of foreign aid and
as new aid giver, 191 investments, 186–96
strategic partnership with China, 127 bad governance, promotion of, 190
Brazzaville. See Republic of the Congo climate change mitigation, 193–4
Brezhnev Doctrine, 94 criticism of, 175–86
BRIC (Brazil, Russia, India, China) currency swaps, as uncounted aid,
group, 127 190
Index ● 299
economic future of China, 196–7 China’s navy in Oceania, 129–30

environmental standards, citizens’ opinion of foreign aid, 148,
environmental aid to China, 152
192–3 claim to colonialism and
global aid competition, 192 imperialism, 30
global governance, 195 clean energy development
globalism, China’s support for, 194 technology shared, 193–4
human rights policies, aid without as consumer-driven economy, 200
conditions, 190 culture as advantage of economic
new aid policies, 186–7 growth, 197–9
“rogue aid” policies of China, 191 definitions of aid and investments,
strategic partnerships with China, 190–1
192 diplomatic recognition, 3, 165
taking aid work from Western economy as key to future aid, 196
countries, 192 foreign policy goals and objectives,
as threat to US and West, 186–7 89, 142, 145–6
war profiteering, 192 as foremost in foreign exchange, 198
Chambishi mine, Zambia, 63 as foremost trading nation, 194–5,
Chavez, Hugo, 140 204
Chen Muhua, 20 four principles with foreign
Chen Shui-bian, 165 countries, 52
Chiang Kai-shek, Mao’s success over, 29 future expected foreign investments,
Chile 189
as aid failure, 168 future role in world leadership, 201
aid to, 121, 125 geopolitical advantages, 203
Chilean National Copper Company, 125 global image improvement, 38–9
China, People’s Republic of global power plan, 204–5
African delegations visiting, 31, globalism and, 176, 194, 197
49–50 history in Africa, 1
African foreign policy reassessment, human rights policies, 163–4
46–7 lack of experience with aid giving,
African guerilla training, 32 167
aid by year (1964–1980), 23–8 military strength vs. US, 203
aid compared to US, 82 as “model of development”
aid for diplomatic support, 36–7 (Kaunda), 14
aid given to stimulate China’s motives for aid giving, 1–2, 29, 35,
economy, 100 100, 138–9
aid/investment amount estimates, motives for economic zone creation,
187–90 61–2
aid reduction after late 1970s, 43 “Muslim problem” in, 173–4
Angolan civil war involvement, 120–1 nonintervention policy change in
anti-Western credentials sought, 29 Sudan, 74
characterization of to African population and market size
countries, 36–7 advantage, 198
checkbook diplomacy vs. Taiwan, 89 post-Tiananmen views on Africa, 48
300 ● Index
China, People’s Republic of—Continued China Non-Ferrous Metal Mining

pragmatism in foreign policy, 177 Company, 63
rapprochement with US, 45, 170 China Overseas Shipping (Group)
rise to power through victories in Company (Cosco), 104
Vietnam and Indochina, 160 China Petroleum and Chemical
“rogue aid” policies, 191 Corporation (SINOPEC), 71, 72
sovereignty concept, 164, 176 China Railway Construction
space program, 135 Corporation, 127, 155, 156
taking aid work from Western China Railway Engineering, 155
countries, 192 China Railway Group Ltd., 67, 156
UN China seat attained, 12 China road, Ethiopia, 66
UN peacekeeping mission in Mali, 50 China Space TT and C Station, 135
UN peacekeeping vetoed in China State and Engineering, 155
Macedonia, 99 China State Construction Engineering
UN support in lieu of aid, 149 Corporation, 66, 128
as victim of colonial encroachment, China Trade Exhibition in Nigeria, 65
176 China-Africa Development Fund
world perception of, 161 (CADFund), 49–50, 58, 59, 66
as world power of tolerance and China-Africa summit conference, 48–9
equality, 202 China-Pacific Island Countries
as world’s builder and banker, 204 Economic Development and
See also African policies, new Cooperation Forums, 130–1
China Civil Engineering Construction “China’s Peaceful Development Road,”
Corporation, 65 164, 201
China Communications Construction, “China’s Peaceful Rise,” 164
155 China-Tanzania Air Cargo Company, 12
China Daily, investments breakdown Chinese as entrepreneurial people, 198
report, 155 Chinese Communist Party
China Development Bank concern over aid amounts, 152
Argentina infrastructure financing, Deng stopped support for wars of
125 national liberation, 33
capitalization of CADFund, 59 lack of support for aid, 170
loan to Ukraine, 101 plenum (1962), 30
loans to Oceania countries, 131 Politburo’s African political
loans to Venezuela, 126 decisions, 46
Mauritius loans, 64 Chinese goods marketed in recipient
Zambia mining loans, 63 countries, 183
China International Fund Ltd., 71, 77 Chinese Harbor State Company, 114
China Merchant Holding Chinese managers of African
International, 67 enterprises, 53
China model (Beijing Consensus), 167, Chinese model of financial assistance.
177, 203 See Beijing Consensus
China National Petroleum Chinese products as aid, 39–40, 88
Corporation, 72, 116–17, 126 Chinese Red Cross, 24
Index ● 301
Chinese vs. local workers in recipient criticism of aid and investments,

countries, 87 175–86
Chinese-African People’s Friendship aid giving standards, adherence to,
Association, 35 175–6
civil conflicts. See wars of national bad governance, promotion of, 175,
liberation 176–8
Clinton, Hillary, 164, 203 Chinese goods marketed in recipient
College of William and Mary, aid countries, 183
website, 188 corruption, 179–80
Colombo Conference, 6 environmental standards, 181
colonialism, 3, 30, 35 globalism, China’s support for, 176
Columbia, canal project, 204 human rights abuses and, 178–9
communications networks, 80 human rights conditions
Communism not encouraged by PRC improvement with
in Africa, 38 China’s aid, 179
Communist Bloc human rights policies, aid without
aid competition with West, 163 conditions, 178–9
aid to promote solidarity, 91–3, 138, labor conditions and laws abuse,
161, 176 184–5
North Korea in, 159 land acquisition in recipient
Soviet Union failing as leader of countries, 183–4
(Mao), 30 military aid, 185–6
splintered by China, 160, 169 pragmatism in foreign policy, 177
Comoros Islands, Li’s visit, 50 resource acquisition, in Africa, 182
concessional loans resources curse, 181–2
for African businesses, 60 sovereignty concept
for agricultural aid, 158 (Westphalianism), 176
as aid type, 56 veto use or threat, United Nations,
for economic infrastructure, 155 on democracy as international
for energy and resource development, standard, 177
183 Cuba, 119–25
to Oceania countries, 131 as aid failure, 168
Confucian Institute, Ethiopia, 66 aid to, 92
Congo-Brazzaville. See Republic of Angolan civil war involvement,
the Congo 120–1
Congo-Leopoldville. See Democratic anti-Cuban aid by China, 28
Republic of the Congo Cuban crisis (1962), 30
Cook Islands, approved destination intelligence posts in, 123–4
status to, 130 as vantage point to Latin America,
copper, 13–14, 62–3 124
corporatocracy, 192 Cultural Revolution, 16, 30, 31, 45,
corruption, 70–1, 179–80 167
Costa Rica, aid to, 129 culture as advantage of economic
Coven (construction company), 100 growth, 197–9
302 ● Index
currency swaps Development Assistance Committee

with African countries, 84 (DAC) definitions and guidelines,
with Argentina, 125, 137, 150 171, 187, 190
with Belarus, 103 Development Gateway aid website, 188
with Brazil, 150 diasporas, Chinese, 199
with many countries, 149–50 diplomatic recognition of China, 3, 13,
with Ukraine, 101, 136 18, 20, 22, 161–2
as uncounted aid, 144–5, 190 disaster aid, to Haiti, 128
currency valuation, 151, 162–3 dominant global powers, 161
Cyprus, aid to, period one, 98 Dongfang Electric Corporation, 66
Czechoslovakia, food aid to, 97 donor fatigue, 48
dos Santos, Eduardo, 69, 71
DAC (Development Assistance
Committee) definitions and East China Sea claim disputes, 172
guidelines, 171, 187, 190 East Germany, food aid to, 97
Dahomey (Republic of Benin) East Turkestan Islamic Movement, 174
aid to, 26–7 Eastern Africa, 10–14
deteriorated relations with PRC, 24 Eastern Europe
dams and hydropower plants, 76–7, 80, aid to Ghana, 6
155–6 period one aid review, 91
Dar es Salaam, special economic economic aid, 154–5
zone, 67 economic future of China, 196–7, 200
Darfur genocide, 73–4 economic zones, aid for, 44
debt forgiveness/debt relief See also special economic zones
in Africa, 44, 81, 83 (SEZs)
in calculating China’s aid, 147–8 Economist, on resources curse, 182
at initial FOCAC meeting, 56 Economist Intelligence Unit, 198
in period one, 54–5 Ecuador
at second FOCAC meeting, 57 aid to, 126–7
Zhao on, 52 as caudillo socialist country, 126
debt privatization, 52 education, Chinese emphasis on, 199
democratic nations vs. democratic Egypt
international system, 202 aid to, period one, 104–7
Democratic Republic of the Congo aid to, period two, 113–14
(Leopoldville) Arab Spring movement, 174
Bagamoyo Port access, 68 diplomatic recognition of China, 3
Benguela Railroad, 77–8 objections to Ethiopia dams, 77
communications networks, 80 SEZ in, 62
copper and cobalt as natural Eight Principles for China’s Aid to
resources, 74 Foreign Countries, 6
human rights abuses, 178 embezzlement of investment funds in
war of resistance to US and Belgian Egypt, 113–14
intervention, 8–9 energy and natural resources, 68–75
See also Zaire corruption, 70–1
Deng Xiaoping, 33, 45, 61, 162, 179 Darfur genocide, 73–4
Index ● 303
foreign policy as resource based, Fatah, 111

87–8 Fiji
policy change in Sudan, 74 aid to, 132–3
transparent looting, 70–1 approved destination status to, 130
UN veto use or threat, with supported China’s position in
Darfur, 73 Tibet, 133
energy needs, financial aid tailored financial aid renewal, period two, 50–5
to, 52 financial help to organizations, 148
environmental protection, 77, 80 Financial Times, on China’s lending to
environmental standards, 181, 192–3 developing countries, 188
Equatorial Guinea, aid to, 26 five point proposal, 48
Eritrean-Ethiopia conflict, 66 Five Principles of Peaceful Coexistence,
Ethio-China Polytechnic College, 66 59, 164
Ethiopia Five Year Plan, China, 104–5
as anti-Communist aid recipient, 26 FLN (Algerian National Liberation
communications networks, 80 Front), 107
dams and hydropower plants, 77 FOCAC (Forum on China-Africa
energy search and aid, 69 Cooperation). See Forum on
relationship history with China, 66 China-Africa Cooperation
special economic zone (SEZ), 62, food aid
66–7 to Cuba, 119
tension with Somalia, 19 to Czechoslovakia, 97
Ethiopian Railway Corporation, 67 during drought (1984–85), 53
Ethiopian-Eritrean conflict, 66 to East Germany, 97
Europe to Egypt, 106
aid summary, 136 in North Korea to undercut US, 191
unpopularity of foreign aid, 196 to Poland, 97
European Council on Foreign to Yemen, 109
Relations, 163 food security, 158, 183–4
European countries I, 92–8 foreign aid amount estimates,
See also individual countries China vs. US, 187–90
European countries II, 98–104 foreign aid failures, 165–75
See also individual countries aid competition with Soviet Union
European Parliament on resources and, 169–70
curse, 182 aid giving for ideological reasons,
European Union, 64, 101–2 168
Exim Bank (Export-Import Bank of aid giving in weak economy, 167
China) aid to too many countries, 170–1
Baha Mar resort in Bahamas, 128 Albania, 170
loan to Egypt, 113 Arab Spring movement, 174
loans to African countries, 58 Chile, 168
loans to Angola, 70–1, 80 with Communist Bloc countries, 169
loans to Ethiopia, 67 criticism by West, 174–5
railroad in Mauritania financing, 78 Cuba, 168, 170
Export Controls for Military Goods, 153 Indochina, 168
304 ● Index
foreign aid failures—Continued foreign investments, as both liquid and

Islamic countries, 168 profitable, 200
lack of experience with aid giving, 167 foreign investments term used as
lack of long-term partners, 168 foreign aid, 83
lack of long-term relationships with Forum on China-Africa Cooperation
recipient countries, 171 (FOCAC)
Latin American countries, 168 2006 meeting promises, 59–60
Mongolia, 168 Addis Ababa Action Plan, 57
rapprochement with US and, 170 aid estimates, 81
Tan-Zam Railroad, 168 China’s aid to, 190
Third World countries resentment of China’s control of, 57
China accepting aid, 171 financial help to, 35, 148
Vietnam not retained as ally, 169 large aid pledges through, 55–6
wars of national liberation, 168–9 principles of, 49
West Africa, 168 purpose, 56
foreign aid successes, 159–67 Sino-African relations
Africa’s economic growth from improvements, 57–8
China’s aid, 165–6 ten-year retrospect, 60
Asian financial crisis, 162–3 four dragons, economic growth in, 197
border agreements, 164–5 Four Principles in Economic and
diplomatic recognition of China, 3, Technological Cooperation, 47, 52
13, 18, 20, 22, 161–2 FRELIMO (Mozambique Liberation
end of aid contest with Taiwan, 165 Front), 31
Five Principles of Peaceful French Somaliland, tension with
Coexistence, 164 Somalia, 19
human rights policies, 163–4 “Friends of Democratic Pakistan,” 191
military aid to North Korea and future of China’s aid and investments,
North Vietnam, 159–60 196–205
poverty reduction/alleviation from capitalism as spur to China’s
China’s aid, 165–6 economic growth, 197
strategic partnerships with China, Chinese as entrepreneurial people,
58–9, 127, 164, 192 198
Taiwan, diplomatic recognition culture as advantage of economic
setbacks, 165 growth, 197–9
Tiananmen Square incident, 164 democratic nations vs. democratic
foreign exchange international system, 202
in 2008 global recession, 104 diasporas, Chinese, 199
from arms sales, 152 education, Chinese emphasis on, 199
China as foremost nation in, 196, four dragons, economic growth in,
198, 205 197
China’s African Policy and, 49, 59 G-2 economic axis proposal, 202–3
excess capital to Latin America, 122, global economy if China collapses,
125 200–1
infrastructure aid and, 76 global recession (2008), 202
in period one, 17 Hong Kong, prosperity of, 197
Index ● 305
information technology in China, global economy if China collapses,

198–9 200–1
instability of rapid growth, 197 global governance, 195
international monetary system global recession (2008), 104, 126, 202
reforms, 195–6 globalism, China’s support for, 176,
networking as Chinese trait, 198–9 194, 197
population and market size, 198 going global/going out, 61
Singapore, prosperity of, 197 Great Leap Forward, 30, 39, 167
soft power, 203 Great Uhuru Railroad. See Tan-Zam
Taiwan, prosperity of, 197 Railroad
tribute diplomacy, 203 Greece, Piraeus port investment, 104
Washington Consensus, 203 green energy projects, 77, 80–1
Yuan as an international currency, guerrilla fighting and training, 15, 27,
195–6, 198, 204 31, 32
Guevara, Che, 120
G-2 economic axis proposal, 202–3 Guinea
Gabon aid to (1950s–1970s), 3–5
Belinga-Santa Clara Railway, 78 biogas project, 80
dams and hydropower plants, 76 dams and hydropower plants, 76, 80
energy search and aid, 69 as early aid recipient, 35
labor conditions and laws abuse, financial credits to, 5
185 as first African beneficiary, 3
Tiananmen Square incident guerrilla training by China, 32
support, 89 prestige projects in, 4–5
timber and fish as natural taking aid work from Western
resources, 74 countries, 192
Gaddafi, Muammar, 117 Guinea-Bisseau, rebel training for, 31
The Gambia, doctors’ salaries, 86 Guinea-Mali Railroad, 8
Geely (Chinese automaker), 101 Guyana, aid to, 121–2, 126
General Nuclear Power Corporation, 81
genocide, use of term in Darfur Haile Selassie, 20, 26
conflict, 73–4 Haiti, disaster aid to, 128
Germany, environmental aid to China, He Ying, 10
193 health diplomacy, 57
Ghana Hezbollah, 115
aid to, 3, 5–6, 27, 35 Himin Solar Energy Group, 193
dams and hydropower plants, 76 Hong Kong, prosperity of, 197
diplomatic relations severed and Hoxha, Enver, 95
restored, 6–7 Hu Jintao
fixed-line communications Africa, visits to, 49–50
expansion, 80 Cuba, visits to, 123–4
Seven Year Plan, 6 “Harmonious World” speech, 201
as sub-Saharan foothold for China, at initial FOCAC meeting, 56
5–6 Nigeria, visit to, 65
wars of national liberation support, 31 six pillars plan, 49
306 ● Index
Hu Jintao—Continued intelligence posts, in Cuba,

Sudan, visit to, 72–3 123–4
at third FOCAC meeting, 58 Inter-American Development
Three Principles, 49 Bank, 128, 189
Ukraine, visit to, 101 intercontinental ballistic missile
Zambia-China Economic Trade testing, 10
Cooperation Zone, 63 intermediate zone, 30, 37
Huainan Group, 67 International Atomic Energy Agency
Huawei Technologies, 64, 65, 80 (IAEA), 115
human rights abuses, 47–8 International Development
human rights conditions improvement Agency, 85
with China’s aid, 179 International Financial Corporation
human rights policies, 90, 163–4, (World Bank), 195
178–9, 190 International Monetary Fund (IMF),
humanitarian aid to Sudan, 72–3, 74 70, 84–5, 195
Hundred Flowers Campaign, 96 international monetary system reforms,
Hungary, aid to, 96–7 195–6
hydrogen bomb test supported by investment, use of term, 54
Zambia, 13 Iran
hydropower development, 155–6 aid to, period two, 114–16
arms aid and arms sales, 172–3
IAEA (International Atomic Energy foreign aid failures, 173
Agency), 115 sanctions (2012), 116
IMF (International Monetary Fund). Iran-Iraq War ( Persian Gulf War I),
See International Monetary Fund 114, 116
imperialism, 3, 29, 35 Iraq, aid to, period two, 116–17
India Islam, Islamic extremism, 112
Colombo Conference mediation, 6 Islamic countries as aid failures, 168,
as new aid giver, 191 173–4
Indochina, as aid failure, 168
Industrial and Commercial Bank Jamaica, aid to, 128
of China, dam in Ethiopia Japan
funding, 66 aid influence taken from China by,
information technology in China, 198–9 171–2
infrastructure aid, 75–81 environmental aid to China, 193
in Africa, 84 railroad financing attempts
to Angola, 71 (Tanzania and Zambia), 16
extent of, 75 seat on UN Security Council, 130
history and reasons for, 76 Jiang Zemin, 48, 49, 56, 123
in Iran, 115 Jordan, Jordanian Civil War, 111
quality of work, 76
rate of financing increases, 76 Karakorum Highway, 157
transcontinental and transnational, Kaunda, Kenneth, 13, 14, 16, 62
194 Keita, Modibo, 7, 8, 37
in Zambia, 13 Kennedy, John, 120
Index ● 307
Kenya Lehman Brothers bankruptcy, 202

Afro-Asian Conference (1965) Lekki Free Trade Zone, Nigeria,
support, 23 65–6
Bagamoyo Port access, 68 Lekki Port, 66
Chinese charge d’affaires expelled, 31 Lenin, Vladimir, thesis of
energy search and aid, 69 imperialism, 29
tension with Somalia, 19 Leopoldville. See Democratic Republic
Kiribati, aid failure in, 134–5 of the Congo
Kunming-Bangkok Highway, 149 Li Keqiang, 127
Kwajalein missile test range, Marshall Li Ruogu, 58, 78
Islands, 135 Li Zhaoxing, visit to Africa, 50
liberation movements, 28–33
labor conditions and laws abuse, 184–5 See also wars of national liberation
Lagos Free Trade Zone, 66 Liberia
Lagos-Kano railway, Nigeria, 78 aid to, 27
land acquisition in recipient countries, civil war in, 51
183–4 sugar cane plantation study, 52
large aid pledges, 55–61 timber as natural resource, 74
Latin American countries Libya
as aid failures, 168 aid to, period two, 117–18
aid summary, 137 Arab Spring movement, 174
limited aid to, 92 Lin, Justin, 195
motives for aid giving, 140 Lin Biao, 30
Latin American countries I, 119–22 littoral countries, China’s focus
Latin American countries II, 122–9 on, 36
currency swaps with Argentina, 125 Long Live the Victory of People’s War
disaster aid to Haiti, 128 (Lin), 30
excess capital to Latin America, 122, Lukashenko, Alexander, 103
125 Lumumba, Patrice, 8–9, 22
global recession (2008), 126
intelligence posts in Cuba, 123–4 Macedonia, aid to, period two, 99
military aid to Bolivia, 127 Madagascar
military aid to Cuba, 122–3 aid to, 27
oil/petroleum from Cuba, 123–4 Wu’s visit, 50
oil/petroleum Venezuelan project, 129 Malagasy Republic, aid to, 26–7
one-China policy, Cuba’s support Malawi, Bagamoyo Port access, 68
for, 123–4 Mali
pivot to Asia, 124 aid to (1950s–1970s), 3, 7–8, 35
Russia-China anti-US axis, 126 Chinese managers of African
special economic zones (SEZs) in enterprises, 53
Cuba, 124–5 Hu’s visit, 50
strategic partnerships with China, 127 as radical and leftist, 7
Tangling Nonferrous Metals Group, trade increases with China, 39
127 UN peacekeeping mission in, 50
tourism in Cuba, 123 Malta, aid to, period one, 98
308 ● Index
Mao Zedong military aid to Algeria, 107

intermediate zone, 30 military aid to Egypt, 106–7
Lenin’s thesis of imperialism and, 29 military aid to PLO, 111
Three Worlds theory, 14, 96 military aid to Southern Yemen, 110
United Front strategy, 35 military aid to Yemen, 109
urban countries vs. rural countries, 30 nuclear weapons possible aid to
vision for Africa, 3 Egypt, 106
maritime boundaries and claims, 172 Six-Day War, 106, 108, 111
Marshall Islands, Kwajalein missile test war of national liberation in Algeria,
range, 135 107
Massamba-Debat, M., 8 Middle Eastern countries II, 111–19
Mauritania Arab Spring movement, 114, 119
as co-sponsor of Albanian arms sales to, 112–13
Resolution, 25 Cairo International Conference
dispute with Senegal, 51 Center, 113
railroad building and embezzlement of investment funds
rehabilitation, 78 in Egypt, 113–14
Mauritius Fatah, 111
aid from Taiwan and Hong Kong, 64 infrastructure aid in Iran, 115
aid to, 26 military aid to Egypt, 113
communications networks, 80 military aid to Iran, 114–15
Hu’s visit, 50 military aid to Iraq, 116
motives for aid giving, 64 military aid to PLO, 111
SEZ in, 62 North-West Suez Special Economic
special economic zone, 63–4 Zone, 114
medical aid/missions, 51, 55, 57, 159 nuclear program in Iran, 115–16
Metallurgical Group Corporation, 131 oil/petroleum from Iran in exchange
Micronesia, Federated States of, for arms, 114–15
approved destination oil/petroleum in Middle East, 112
status to, 131 oil/petroleum Iraq investments,
Middle Eastern countries 116–17
aid summary, 136–7, 139 special economic zones (SEZs),
period one aid review, 91 North-West Suez Special
as shield against Soviet hegemony, Economic Zone, 114
139 tourism, to Egypt, 114
Middle Eastern countries I, 104–11 military aid
aid competition with Soviet Union alarm over by other countries, 28–9
in Southern Yemen, 110 to Albania, 94–5
aid competition with Soviet Union to Algeria, 107
in Yemen, 109 amount estimates, 32–3
Albanian Resolution, 110 to Angola through Zaire, 22
Algerian National Liberation Front arms aid and arms sales, 88–9, 146
(FLN), 107 to Bolivia, 127
food aid to Egypt, 106 to countries with bad governance,
food aid to Yemen, 109 185–6
Index ● 309
to Cuba, 122–3 FRELIMO (Mozambique Liberation

to Egypt, 106–7, 113 Front), 31
to Ghana, 5, 6 labor conditions and laws abuse,
guerrilla training by China, 32 185
to Guinea, 5 revolution supported by China, 32
to Iran, 114–15 wars of national liberation
to Iraq, 116 support, 31
to Mali, 8 Mubarak, Hosni, 107, 113
to Middle Eastern countries, 139–40 Mugabe, Robert, 31, 178
Organization for African Unity Munich policy, 120
(OAU), 31 “Muslim problem,” 173–4
to PLO, 111 Mutati, Felix, 63
reduced after late 1970s, 43 Mwanawasa, Levy, 63
to Republic of the Congo, 9 Myanmar, relationship with China per
to Romania, 97 Suu Kyi, 191
to Southern Yemen, 110
to Sudan, 21, 71–2, 73 Namibia
to Tanzania, 11–12 dispute with Angola, 51
to Tonga, 134 energy search and aid, 69
to Uganda, 25 fish as natural resource, 74
unrevealed/unannounced foreign Tiananmen Square incident, 47, 89
aid, 146 Nasser, Gamal, 104
to Yemen, 109 National Bank of Ukraine, 101
to Zaire, 22 National Convention Centre, Vanuatu,
See also wars of national liberation 136
military bases in Tanzania, 12 National Foreign Aid Working
mining, Zambian copper and cobalt, Conference, 53
13–14 National Information Communications
Ministry of Commerce, 59, 62, 80 Technology Infrastructure
Ministry of Foreign Affairs, 49 Backbone, Nigeria, 65
Missile Technology Control Regime, National Liberation Front of Algeria, 31
153 National People’s Congress, 89
Mobuto, 22 national security, 55
Moldova, aid to, period two, 99–101 natural resources
Mombasa-Nairobi rail line, 78 African resources needed by China,
Mongolia, as aid failure, 168 74–5, 182
Morocco China’s effect on prices of, 75
aid to, 27, 110, 118–19 financial aid tailored to, 52
diplomatic recognition of China, 3 in period one, 40
motives for aid giving, 1–2, 29, 35, networking as Chinese trait, 198–9
100, 138–9 “New International Order,” 164
Mozambique Ngouabi, Marien, 9
aid to, 27 Nicaragua
Bagamoyo Port access, 68 canal project, 204
dams and hydropower plants, 76 possible canal, 129
310 ● Index
Niger Nuclear Nonproliferation Treaty, 38,

aid to, 27 115
communications networks, 80 Nuclear Test Ban Treaty, Mali’s
Nigeria support for PRC, 7
Abuja Rail Mass Transit System, 78 Nujoma, Sam, 47
aid to, 26–7 Nyerere, Julius, 10–11, 12, 16, 18
dams and hydropower plants, 76
energy search and aid, 69 Obama, Barack, 202–3
Lagos-Kano railway, 78 Obasanjo, Olusegun, 65
relationship history with China, 64–5 Oboto, Milton, 24–5
SEZ in, 62 Oceania, 129–36
special economic zones (SEZs), 64–5 aid competition, with Taiwan in
Nigerian Communications Oceania, 129–30
Commission, 65 aid competition, with Taiwan in
Nixon, Richard, 97, 160, 169–70 Papua New Guinea, 132
Nkrumah, Kwame, 5, 6 aid summary, 138
Non-Aligned Movement, African aid to undermine Taiwan, 92, 129
nation members, 89 aid without conditions, 141
Non-Proliferation Treaty, 153 concessional loans to Oceania
North Korea countries, 131
border agreement with, 165 evolution of China’s interaction
as China’s ally, 159–60 with, 130
human rights abuses, 178 military aid to Tonga, 134
Mao’s Great Leap and, 177 motives for aid giving, 141
as problematic ally, 171–2 one-China policy, Papua New
North Vietnam, China’s warfare tactics Guinea’s support for, 131
in, 177 tourism, approved destination status
Northern Marianas, approved to Oceania countries, 130
destination status to, 130 OECD (Organization for Economic
North-West Suez Special Economic Cooperation and Development).
Zone, 114 See Organization for Economic
nuclear development and capabilities Cooperation and Development
African countries’ support for, 38 (OECD)
arms control agreements and, 152–3 Ogun-Guangdong Free Trade Zone,
assistance for in Middle East Nigeria, 65, 66
countries, 140 oil/petroleum
assistance for not acknowledged, African oil, reasons to pursue, 69
146–7 aid without conditions and, 178–9
base on Kiribati, 135 from Cuba, 123–4
Ghana’s support for PRC’s nuclear Iran aid failures and, 173
testing, 6 from Iran in exchange for arms,
in Iran, 115–16 114–15
Mali’s support for PRC, 7 Iraq investments, 116–17
nuclear power plants, 81 in Middle East, 112
possible aid to Egypt, 106 in Nigeria, 64–6
Index ● 311
oil for aid in Middle East, 137 People’s Republic of Yemen (Southern
pipeline construction, 156 Yemen), 110
from Russia and Southeast Asia, 182 Persian Gulf War I, 114, 116
Sudan oil exportation, 72 Peru
Venezuelan project, 129 aid to, 121, 129
Olympic Games (2008), 74, 90, 202 disaster aid to, 126
Olympic Games (2016), 127 labor conditions and laws abuse, 185
Oman, State General Reserve Fund, 67 Petro Trans Company, 67
one-China policy Petrobras, 127
Cuba’s support for, 123–4 Petrodar National Petroleum
Papua New Guinea’s support for, 131 Company, 72
support as aid requirement, 37, 162 pivot to Asia, 102, 124, 172
support at FOCAC, 59 pledged aid, undelivered, 147
US commitment to, 165 PLO (Palestine Liberation
OPEC (Organization of Petroleum Organization), 109, 110–11
Exporting Countries), 111 Poland, food aid to, 97
Organization for African Unity Portuguese colonies, wars of national
(OAU), 31 liberation support, 15
Organization for Economic poverty reduction/alleviation from
Cooperation and Development China’s aid, 165–6
(OECD), 53, 56–7, 59, 82, 189, “Pragmatism and Action-Oriented
190 Cooperation,” 57
Organization of African Unity, 51 pragmatism in foreign policy, 177
Organization of Petroleum Exporting prestige projects in Guinea, 4–5
Countries (OPEC), 111 Program for China-Africa Cooperation
Ortega, Daniel, 204 in Economic and Social
Development, 56
Pacific Islands Forum, 130, 131, 133 protectionism in Western countries,
Pakistan, “Friends of Democratic 163
Pakistan,” 191 public relations for China, Tan-Zam
palace of the people in Zambia, 14 Railroad as, 17
Palestine Liberation Organization
(PLO), 109, 110–11 Qian Qichen, 48, 115
Palestinian nation, aid to, period one,
110–11 racism, China’s stand against, 39
Pan-Africanist Congress (Algeria), 31, 48 radio stations, aid for, 9, 11, 12
Panama Canal replacement in Ragan, Richard, 191
Nicaragua, 129, 194, 204–5 railroad building and rehabilitation,
Panamanian Association of Business 77–8, 101, 156
Owners, 204 Ram NiCo in Papua New Guinea,
Pande, Kabinga, 63 131–2
Papua New Guinea Ramgoolam, Navin, 64
approved destination status to, 131 Rand Corporation, 144
most Oceania aid to, 131 rapid growth, instability of, 197
Paris Club, Angola negotiations, 70 rapid train systems, 156
312 ● Index
“raping by China” refuted, 182–3 Russian Asian pivot, 102

remittances from foreign workers, 149 Sino-Soviet relationship
“Report to the 17th Party Congress,” improvement, 102
201 See also Soviet Union
Republic of the Congo Rwanda
(Congo-Brazzaville) aid to, 26–7
aid to in 50s and 60s, 3, 8–9 Bagamoyo Port access, 68
as arms transfer country, 33
dams and hydropower plants, 76, 77 Sadat, Anwar, 106–7, 112
diplomatic relations with China, 8 Samoa
as early aid recipient, 35 aid to, 133–4
energy search and aid, 69 approved destination status to, 131
guerrilla training by China, 32 supported China’s position in Tibet,
labor conditions and laws abuse, 185 133
original diplomatic relationships Sanaa-Hudayda highway, 109
with Taiwan, 8 Sane Hopeful, 184
as people’s republic, 9 Sata, Michael, 63
revolutionary war instigation Saudi Arabia
failure, 32 as new aid giver, 191
timber as natural resource, 74 as oil source, 116
wars of national liberation “Save Darfur Coalition,” 74
support, 31 scholarships as aid, 55, 57
resource acquisition in Africa, 182 SCO (Shanghai Cooperation
See also energy and natural resources; Organization), 103, 148, 190
natural resources; oil/petroleum Sea Launch Company, 135
resources curse, 181–2 Second Asia-Africa Forum, 90
revolutionary movements. See wars of Senegal
national liberation communications networks, 80
Rhodesia dispute with Mauritania, 51
bad governance, promotion of, 178 Hu’s visit, 50
China’s opposition to, 13–14 Seven Year Plan (Ghana), 6
embargo costs to Zambia, 16 Seychelles
human rights abuses, 178 aid to, 27
Rhodesian Civil War, 18 Wu’s visit, 50
“The Rise of the Great Powers” Shaba Province, Zaire, 22
(tv show), 201 Shah of Iran, 112
Rizhao, Shandong Province, solar Shanghai Cooperation Organization
energy use, 193 (SCO), 103, 148, 190
road-building aid, 19, 80, 157 Shoreline Electric Company, 134
“rogue aid” policies of China, 191 Sierra Leone
Romania, aid for political reasons, 97 aid to, 26
rural countries vs. urban countries, 30 Chinese managers of African
Russia enterprises, 53
crisis in Ukraine, 102 communications networks, 80
Russia-China anti-US axis, 126 Silk Road, 104, 205
Index ● 313
Singapore aid to Brazzaville, 9

Nigeria’s oil industry and, 66 aid to Ghana, 6
prosperity of, 197 Aswan Dam financing, 105
Sino-African New Strategic failed aid in Mali, 7
Partnership, 58, 59 friendship treaty with Egypt, 107
Sino-African People’s Friendship Guinea, government plot in, 4
Association, as aid recipient, 35 Mao’s criticism of leadership, 30
Sino-African trade, 56, 85 Munich policy accusation, 120
Sino-American relations after Nixon’s railroad financing attempts, 16
visit, 169–70 See also Russia
Sinopec, 129 special economic zones (SEZs), 61–8
Sino-Soviet feud, 15, 29–30 Cuba, 124–5
See also aid competition Dar es Salaam, 67
Sino-Tanzanian Maritime Transport Ethiopia, 66
Joint-Stock Company, 11–12 Mauritius, 63–4
six pillars plan, 49 as model from China’s experience
Six-Day War, 106, 108, 111 with, 157
small-project tenet of foreign aid, 4, 10, Nigeria, 64–5
15, 154, 157 North-West Suez Special Economic
socialism in Africa, 41, 47, 50–1 Zone, 114
soft power, 203 Tanzania, 67
Solar Valley City, 193 Zambia, 62–3, 79
Somalia, 18–20 State Administration for Science,
independence and diplomatic Technology, and Industry for
recognition of PRC, 18 National Defense, 153
South Africa State Council mandate for aid
iron ore as natural resource, 74 expansion, 69
revolution supported by China, 32 State General Reserve Fund, Oman, 67
South China Sea claim disputes, 172 strategic partnerships with China,
South Korea, as new aid giver, 191 58–9, 127, 164, 192
South Pacific Games (2003), Fiji, 132 Sudan, 20–1
South Pacific Games (2007), Samoa, 133 aid types to, 71–3
South Pacific Islands Tourism aid-investing, 72
Organization, 130 bad governance, promotion of, 178
Southern Yemen (People’s Republic of dams and hydropower plants, 76–7
Yemen), aid to, period one, 110 diplomatic recognition of China, 3
South-South friendship and aid, 2, 38, diplomatic recognition of PRC, 20
49, 51 energy search and aid, 69
Southwest African People’s guerrilla training by China, 32
Organization (SWAPO), 47, 48 human rights abuses, 178
sovereignty concept (Westphalianism), as recipient of significant aid
164, 176 (1977), 27
Soviet Union Sudan Communist Party, 21
aid given to thwart, 93 Sudan People’s Liberation Army, 74
aid reduction in Africa, 48 trade increases with China, 39
314 ● Index
Suez War, 105 as recipient of significant aid

Surinam, aid to, 27 (1977), 27
Suu Kyi, Aung San, 191 special economic zone, 67
Swaziland, sole non-recipient of aid, 81 Tan-Zam Railroad, 2
Syria, aid to, period one, 108–9 trade increases with China, 39
wars of national liberation
Taiwan support, 31
checkbook diplomacy vs. PRC, 89 tariff reductions and relief
diplomatic recognition setbacks, 165 for Africa, 44, 57–8, 83
Mali’s support for PRC, 7 China’s definition of foreign aid and,
PRC’s efforts against, 37 56, 144, 147
prosperity of, 197 for Oceania countries, 130–1
as Republic of China, 165 for Sudan, 72
Tanganyika for Vanuatu, 135
independence (1961), 10 technology in Africa, 64
See also Tanzania TEDA Investment Holdings, 113–14
Tan-Zam Railroad (Great Uhuru thermal power stations, 76–7
Railroad), 15–18 Three Gorges Dam, 77
aid competition for, 15, 168 Three Principles (Hu), 49
East African support base and, 15 Three Worlds theory, 14, 96
as exception to small-project tenet, Tiananmen Square incident, 47–8, 54,
10, 14 89, 164
as large aid project, 2, 40 tianxia (under heaven), 202
link to Dar es Salaam, 67 Tito, Teburono, 135
poor management problems Togo, aid to, 26–7
addressed, 78–80 Tonga
successes and problems, 17–18 aid to, 134
as transport for raw materials for approved destination status to, 130
China, 79 Toure, Sekou, 3–4
Zambian copper transport, 13, 16–17 tourism
Tanzania approved destination status to
allegiance to China, 11 Oceania countries, 130
as arms transfer country, 33 Chinese in Africa, 55
communications networks, 80 to Cuba, 123
debt reprieval, 52, 54 to Egypt, 114
formed from Tanganyika and trade routes from East Africa, 10
Zanzibar, 10 transparent looting, 70–1
guerrilla training by China, 32 tribute diplomacy
helped PRC get UN China seat, 12 aid given when needed at home as,
Hu’s visit, 50 105
as largest sub-Saharan aid recipient, 11 as aid giving experience, 167
loan agreements, 54 North Korea as tribute bearer, 159
railroad financing attempts with Nyerere as tribute bearer, 12
Zambia, 16 preferred policy vs. force, 203
Index ● 315
Tunisia United Nations Conference on

aid to, period one, 110 Disarmament, 195
aid to, period two, 118–19 United Nations Conference on Trade
broke off diplomatic relations, 31 and Development, 149, 189
United Nations Food and Agricultural
Uganda Organization, 60
Bagamoyo Port access, 68 United Nations General Assembly, 89,
on-and-off aid, 24–5 90, 163–4
trade increases with China, 39 United Nations Human Rights
Ukraine Council, 90, 195
aid to, period two, 101–2 United Nations Industrial
crisis with Russia, 102 Organization, 149
as strategic partner, 102 United Nations Preventive Deployment
undelivered pledged aid, 147 Force, 99
The Under-Heaven System (Zhao), 202 United Nations Security Council
unemployment, 87 Darfur genocide veto threat, 73
United Arab Emirates, as new aid giver, Namibia-Angola dispute, 51
191 PRC as poor countries’
United Front strategy, 16, 35 representative, 38
United Kingdom, railroad financing PRC seat on, 12
attempts, 16 veto use, 73, 149, 173
United Nations United Nations World Food Program
aid pledged to, 149 in North Korea, 191
China’s cooperation on clean energy, United States
194 aid compared to China, 82
giving guideline, 189 aid/investment amount estimates,
Millennium Development Goals, 187–90
165–6 aid programs after WWII, 200
mission in Sudan, 74 aid to Guinea, 4
peacekeeping function, 176 arms aid and arms sales, 146
peacekeeping mission in Mali, 50 concern over China’s arms sales, 154
support for PRC membership, expected decline in aid giving, 189
37–8 Iran-Iraq War policy, 116
United Nations, PRC admission to lost wars, 160
aid given for, 162 policies in Middle East, China and,
Albanian Resolution, 25, 37, 95, 162 111–12
Arab nations’ support, 139 railroad financing attempts, 16
Ethiopia’s support, 26 rapprochement with China, 170
Morocco’s support, 110 rapprochement with PRC, 45
no support from Nigeria, 65 relationship with Albania, period
support from African nations, 2, 36, one, 95–6
43, 89 unpopularity of foreign aid, 196
Tanzania’s support, 11 University of the South Pacific,
Tunisia’s support, 110 Vanuatu, 136
316 ● Index
unrevealed/unannounced foreign aid, China’s support for, 2–3, 29–31

146 defeats and setbacks, 31–2, 33, 36
unspecified pledges, 84 in Ghana, 6
Upper Volta, aid to, 27 in Latin America, 119
urban countries vs. rural countries, 30 in Mozambique, 11
US Aid to International Development in Portuguese colonies, 15
(AID), 190–1 support abandoned under Deng, 33, 45
US Congressional Research Service, 187 See also military aid
US Millennium Challenge Account, Warsaw Pact, 96, 97
100 Washington Consensus, 58, 195, 203
water and sanitation projects, 80
Vanatu Webb, James, 191
aid to, 135–6 Wen Jiabao
approved destination status to, 130, on 2008 global recession, 202
135–6 Africa, visit to, 49
Venezuela at China-Pacific Island Countries
bad governance, promotion of, 178 Economic Development and
as caudillo socialist country, 126 Cooperation Forum, 130–1
human rights abuses, 178 Egypt, visit to, 113–14
veto use or threat, United Nations Fiji, visit to, 132
China as developing country with, 149 at initial FOCAC meeting, 56
with Darfur, 73 at second FOCAC meeting, 57
on democracy as international Western aid
standard, 177 debt cancellation/forgiveness, 54
with Iran’s nuclear weapon plans, 173 decline in, 163
pressure on peacekeeping activities, donor fatigue, 48
149 environmental standards and, 181
as support for Third World expected decline, 189
countries, 38, 171 human rights policies results, 179
UN Preventive Deployment support estimates, 34
Force in Macedonia, 99 Westphalianism (sovereignty concept),
Vietnam 164, 176
Beibu Gulf Declaration, 172 white regimes in Southern Africa, 15
border agreement with, 165 World Bank
“Voice of the Congolese Revolution” AIIB to replace, 205
radio station, 9 vs. China in Latin American
investments, 189
Wang Yang, 131 conditions for aid giving, 86
Wang Yi, 50, 78 disregard of human rights policies,
war profiteering, 192 179
wars of national liberation energy and natural resources, 88
aid failure and, 168–9 environmental aid to China, 193
Algeria, 107 loans to African countries, 58–9
arms types supplied, 33 railroad financing attempts, 16
China’s definition of, 31–2 on resources curse, 182
Index ● 317
World Economic Forum, 202 joint ventures with new government,

World Trade Organization (WTO), 62–3
57–8, 183, 194 labor conditions and laws abuse,
Wu Bangguo, 50 185
Wu Yi, 158–9 loan agreements, 54
period two aid projects, 62
Xi Jinping railroad financing attempts with
Africa, visit to, 50 Tanzania, 16
Argentina, visit to, 125 SEZ in, 62
BRICS bank as alternative to World special economic zone, 62–3
Bank, 128 Tan-Zam Railroad, 2
Cuba, visit to, 124 Zambia-China Economic Trade
Fiji, visit to, 133 Cooperation Zone, 63
Oceania, visit to, 131 Zanzibar, 10
Xinhua News Agency, office in formed Tanzania with Tanganyika, 10
Ghana, 6 See also Tanzania
Xinjiang Autonomous Region “Muslim Zenawi, Meles, 67
problem” in, 174 Zhao Tingyang, 202
Zhao Ziyang, 47, 52
Yang Liwei, 135 Zhou Enlai
Yanukovyche, Viktor, 101 Africa, visit to, 2, 4
Yemen, aid to, period one, 109–10 aid commitment to Castro, 120
Yuan as an international currency, on aid to Albania, 94
195–6, 198, 204 Ghana, visit to, 6
Keita and, 37
Zaire, 22–3 Mali, visit to, 7
debt cancellation/forgiveness, 52, 54 Nasser and, 105
diplomatic recognition of PRC, 22 on nuclear technology, 106
as recipient of significant aid Sudan, visit to, 20
(1977), 27 Zhu Min, 195
See also Democratic Republic of the Zhu Rongji, 48, 62, 79
Congo (Leopoldville) Zimbabwe
Zambia, 13–14 bad governance, promotion of, 178
Bagamoyo Port access, 68 human rights abuses, 178
Benguela Railroad, 77–8 loan agreements, 54
China as “all-weather friend,” 13 platinum as natural resource, 74
communications networks, 80 revolution supported by China, 32
copper and cobalt as natural Tiananmen Square incident, 89
resources, 74 wars of national liberation support, 31
dams and hydropower plants, 77 Zimbabwe African National Union, 31
debt reprieval, 52, 54 ZTE Corporation, 66, 80
guerrilla training by China, 32 Zuma, Jacob, 60
About the Author
John F. Copper is the Stanley J. Buckman Distinguished Professor of

International Studies emeritus at Rhodes College in Memphis, Tennessee.
He is the author of more than thirty books on China, Taiwan, and Asian
Affairs. Copper is listed in Who’s Who in America, Who’s Who in the World,
Men of Achievement, Contemporary Authors, and The Annual Guide to
Public Policy Experts. In 1997, Dr. Copper was recipient of the International
Communications Award. He has spent fifteen years in Asia. China’s Foreign
Aid and Investment Diplomacy, Volumes I–III represent the culmination of
Professor Copper’s work on this subject over four decades.

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China’s Foreign Aid and Investment

Diplomacy, Volume III

Chapter 1 China’s Foreign Aid and Investment Diplomacy to

Providing aid and investment funds to developing or Third World coun-

a formidable competitor in these realms. Many nations now rely on China.

China’s Foreign Aid and Investment

Assistance in Late 1950s and Early 1960s

China extended foreign aid to Ghana in the form of a non-interest-bearing

projects in Mail, including a textile mill, a leather-processing factory, sports

and his government replaced by a pro-United States one. US pilots began

China’s Aid Shift to Eastern Africa

During 1973 China made numerous aid deliveries to Tanzania while

The Tan-Zam Railroad

China experienced difficulties in supplying the goods needed to build

Other Major Aid Recipients in the Late 1960s and 70s

China’s first officially announced aid to Somalia occurred in 1963 in the

Mao’s definition, a revolutionary one; in fact, China may have expected

China’s aid to Zaire had an interesting twist. Beijing extended a consider-

Aid to Other African Countries

trying to sabotage their relationship.219 In mid-1967 it was reported that

been intended to strengthen President Oboto’s political position since he

In October 1971, Emperor Haile Selassie of Ethiopia traveled to China

China’s Aid to Liberation Movements

revolution, certainly not a Communist revolution. This precluded (by defi-

One source put a value on China’s arms aid to African countries at

Chinese-Soviet aid competition reached a crescendo in 1965 with both

willing to help. They characterized China as an underdeveloped country

largest aid recipient in Africa) danced in the aisles of the UN General

not associated with most of Africa’s ailments or perceived ailments. China’s

China’s Foreign Aid and Investment

China’s New Africa Policies and Foreign Aid

In October 2000, at a summit meeting held in Beijing with 45 African

China Renews Its Financial Help to Africa

new economic development strategy, which was essentially capitalism (as

China signed bilateral aid agreements with 48 of Africa’s 53 countries and

Large Aid Pledges to Africa (Not Country Specific)

FOCAC was established in October 2000 to serve as a platform where

its aid into a Western definitional framework was difficult to impossible.

the World Trade Organization. In return, 17 Chinese companies were given

Because China’s financial commitments were so large and so generous

Chinese government would take to strengthen Sino-Africa cooperation for

Most observers expected China to continue to provide Africa large doses

China’s Support for Economic Zones in Africa

have been of interest to China. But Nigeria supported democratic gover-

The Lekki Free Trade Zone involved cooperation between Nigeria’s

Aid and Investments for Energy and Natural Resources

First petroleum. There were a number of other special or unique rea-

Relations continued to improve, in fact quickly, and in 1992 China

to be “invested” in social projects.207 The China Petroleum and Chemical

status on 44 Sudanese commodities that it exported to China.235 Later in

China Financing Infrastructure Building

the process of negotiating with Ethiopia for another dam. Meanwhile,

anniversary of the opening of the railroad, China provided additional aid

Indeed China’s financial assistance to Africa is different. In fact, the

China has also provided financial help to a number of African countries

costs of construction in Africa undertaken by the International Development

resource exploration and extraction projects in order to buy the resources

In September 2007, the United Nations General Assembly voted not to

China’s Foreign Aid and

Aid to European Countries, I

Foreign Assistance to European Countries, II

In 1991, Macedonia, a former part of the Yugoslav Republic, gained

June, China signed an agreement formalizing a loan for that amount at a

addition to 1,200 computers and 200 printers for Moldovan students.67