Foreign Aid From China
CITV’s Harriet Tuara is part of a Pacific Media Group visiting China. The Group met with the Ministry of Commerce board of Directors for a briefing on foreign aid

For years even up to now, the Pacific Island countries, including the Cook Islands have been dominant recipients of Chinese Foreign Aid. In 2004, China on the basis of sustained and rapid economic growth and enhanced overall national strength has provided foreign aid assistance freely out of coordination and friendly partnerships to other developing countries.
However, China’s aiding to developing countries started long before the ‘founding of the People’s republic of China’. It was in August 2010, the Chinese government held the National Conference on Foreign Aid to summarize China’s experience on foreign aid affairs as well as define major tasks for strengthening and improving the type of work in new circumstances. China’s foreign aid thus entered a new stage.
Financial resources by China for foreign aid fall under into three types: grants (aid gratis), interest-free loans and concessional loans. The first two come from the China’s state finances, while concessional loans are provided by the Export-Import Bank of China as designated by the Chinese Government. By the end of 2009, China had provided a total of $256.29 billion Yuan in aid to foreign countries, including $106.2 billion Yuan in grants, $76.54 billion Yuan in interest-free loans and $73.55 billion Yuan in concessional loans.
Grants are given on the basis that recipients will use it to build hospitals, schools and new low-cost houses as well as support well-digging or water supply projects and other medium and small projects for social welfare. In addition grants could also be used in projects related to human resources development cooperation, technical cooperation and emergency humanitarian aid.
Interest-free loans are mainly used to help recipient countries to construct facilities and launch projects to improve people’s livelihood. The tenure of such loans is usually 20 years, including five years of grace and 10 years of repayment. These loans are currently provided to developing countries with relatively good conditions.
Concessional loans are mainly used on the basis that recipient countries undertake productive projects generating both economic and social benefits and large and medium-sized infrastructure projects, or to services and other materials. Since the interest of this loan is lower than the benchmark interest of the People’s Bank of China, the difference is made up by the State financial subsidies. At present the, the annual interest rate of China’s concessional loans is between 2% and 3%, and the period of repayment is usually 15 to 20 years. By the end of 2009, China had provided this type of loan to over 75 foreign countries, supporting exactly 325 projects, of which 142 had been completed. Of China’s concessional loans, 61% are used to construct transportation, communications and electricity infrastructure, and 8.9% are used to support the development of energy and resources such as oil and minerals.
Completed projects in total by the end of 2009 came to over 2,000 closely linked to local people’s life and production, covering industry, agriculture, culture and education, health care, communication, power supply, energy, transportation and others.
The management of Foreign aid and decision-making power lies with the central government. The Ministry of Commerce of the People’s Republic of China is the administrative department authorized by the State of Council to oversee Foreign Aid.
After meeting with the Deputy Director-General Wang Xu and the Commercial Counsellor Mr. Yu Yingfu, the Joint Press delegation from the Pacific Island countries were able to express their curiosities and concerns about foreign aid particularly to the Oceania countries on a face-to-face encounter. In his introductory speech yesterday afternoon, Mr. Wang felt the ‘power of journalists’ saying that we are probably the ‘most powerful people’ in the world, as it made him quite nervous this being his first time facing a large group of media personnel.
However in spite of the shaky feeling, Mr. Wang Xu was by far confident in speaking ‘good English’ articulating China’s bilateral relationship with the Pacific Islands through foreign aid in a relaxing manner.
This contributed to a very fruitful and informative briefing whereby the Pacific media felt comfortable in expressing any questions towards the board of directors to which answers were given undiplomatically, but formally aligned with their policies.
Having visited already the island countries of Vanuatu and Papua New Guinea, Me. Yu Yingfu feels that China has contributed a lot to the Pacific region and has in return gained a strengthened friendship from the recipients of their types of aid- whether it is grant or loans.
Yingfu on a personal level enjoys the company of Pacific islanders and has thoroughly enjoyed his experiences on the two island countries. On a diplomatic level he feels confident of providing aid assistance to any of the Pacific island countries, as he could relate to the people and their struggles and needs.
“You have beautiful countries and you people are very friendly.” Mr. Yu remembers from his visit to Vanuatu.
China does hope to further assist the Pacific island countries through the alignment of their eight principles for economic aid and Technical Assistance including; basing itself on the principle of equality and mutual benefit, not attaching any conditions or special privileges from the recipients, embark on self-reliance and independent for future development as well as to provide the follow-up technical assistance once projects have been completed.
From 2009-10 Cook Islands has received foreign aid of over $30.2 million to go towards economic and developments. And we can agree that China has had a huge influence towards the development of our public facilities including the first ever project assisted by the Chinese government, our Cook Islands department of the police station in central Avarua, Rarotonga. Soon after that project the Cook Islands received more aid to rebuild a new Ministry of Justice establishment, as it was a national need at the time. And more recently, after succeeding the bid to host the U21 World Youth Netball Championships and the Pacific Mini Games in 2009, the Cook Islands again requested for further assistance from the Chinese government to provide funding and technical assistance to build a multi-functional sports centre in the village of Nikao, Rarotonga. From 2008-09, a sizeable population of Chinese workers arrived to the Cook Islands to construct the million dollar building. Having already some workers from the previous projects, demand for more workers was not necessary. Tirelessly, the Chinese worked long-nights and throughout the days to complete the centre on time. And having successfully done so, the building now dubbed as the Telecom Sports Arena houses majority of Cook Islands in-house sports such as; netball, volleyball, hand-ball, weightlifting, squash and so much more. In addition the arena holds a gym facility for training development of athletes, as well as caters for other events, and private ceremonial functions.
The TSA proved its reliability and compatibility throughout the duration of the mini games as well as the WYNC making it a very useful establishment. Until now the building is fully occupied housing inter-village sports competitions and school activities.
The arena has a capacity enough to cater over 1,000 spectators on the western and eastern benches and a further 200 or more on ground level.
Therefore we can say that the Chinese government has hugely helped us as an economy to further develop our potential to hold future regional games or even forums and meetings. The China-Pacific Island countries relationship through its bilateral channels has proven very successful and therefore more intimate. -Harriet Tuara

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