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China International Development Cooperation Agency

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China International Development Cooperation Agency

Foreign Aid with Chinese Characteristics

China has fast changed its course of economic development at the turn of the century, from being a major recipient of global funds to a net provider of financial assistance. Following the National People’s Congress in March 2018, Beijing set up the China International Development Cooperation Agency (CIDCA) to oversee its massive, globe-spanning foreign aid and investment activities. This new agency, which answers to the State Council, plans to consolidate the roles and functions that have traditionally been shared by the ministries of commerce and foreign affairs. If it is empowered to do so, the CIDCA could help China coordinate its aid portfolio more efficiently and give Chinese decision-makers a better grasp of the local contexts they are operating in.

During the past four decades, China has transformed itself from a major recipient of foreign aid into a critical provider of investment and development resources for the Global South. However, China’s foreign aid program has been the subject of recurring but gradual reforms—a trend that mirrors the country’s overall economic trajectory and one that continues today. The reform of the Chinese aid system reached a peak in April 2018, when China established a new International Development Cooperation Agency (CIDCA) at the vice-ministry level, elevating the political importance of development cooperation. The new agency is said to be responsible for strategic guidelines and policies on foreign aid; coordinating and making suggestions on major related issues; reforming the foreign aid system; and making plans and overseeing their implementation. Although the CIDCA has been tasked with lofty goals, near-term expectations must be tempered by lingering questions about how it fits into the country’s existing foreign aid bureaucracy. After all, China has been providing foreign aid for decades, and the Chinese international development community has been calling for a bilateral aid agency since the early 2000s. Examining the history of Chinese foreign aid and the logic behind the CIDCA’s founding can help contextualize its status and the role it will play.

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