World Bank Engages China as a Donor

Sources: World Bank encouraging ‘responsible’ Chinese lending in Africa: Zoellick; China builds African empire: The giant’s rush to secure resources

On November 19, Robert Zoellick urged the European Union to engage China as a fellow donor in Africa. Zoellick’s comment was in response to doubts raised by European donors about China’s aid to Africa. More specifically, Europe worries that China is worsening African economies with its assistance by increasing their debt.

Indeed, China has continually expanded its economic influence on the African continent; not only has it engaged the continent as a donor, but it has also enhanced its role as a trading partner. China is the second-largest trading partner in Africa (the first being the United States), and its trade on the continent has increased about 20% since last year. Its economic policies towards Africa include (1) debt cancellation, and (2) lower tariffs on goods entering the Chinese market from designated least-developed countries.

Developed countries and other concerned parties have been quick to criticize China for its refusal to condition its aid and trade on the recipient country’s political system or policy positions on human rights and other socio-political freedoms. For example, China is the largest investor in Sudan.

While these concerns require serious review, Zoellick has nevertheless advocated the position that these are not pretext for ostracizing China from playing a greater role in Africa. He cautioned Europe about hastily drawing conclusions about China’s economic activities in Africa, especially given its members’ history as colonizers on the same continent.

Discussion:

How should standards for trade and aid be established? Do you think the identity of the actor (e.g. China, the World Bank, members of the European Union, African recipient countries) matters in defining these standards?