Recent Media Reports Omit Essential Details About Chinese Development Finance

Over the last month, we have been pleased to see strong interest in AidData's new database of Chinese development finance to Africa. However, we have also noticed that many  development finance "terms of art" have proven difficult for non-technical users of the database to grasp.

We would therefore like to clarify some of the technical content of a recent Ghana Business News article entitled “Ghana Receives $13.9b Chinese Aid in 10 Years.” The article states that “Chinese investment and development aid to Ghana totaled $13.96 billion between 2000 and 2011.” This $13.96 billion figure actually refers to China’s official finance (government-supplied finance with development, commercial, and representational intent) rather than its aid to Ghana. “Aid,” by contrast, is often used interchangeably with the term Official Development Assistance (ODA) -- a specific type of funding with developmental intent that has at least a 25% grant element. In addition, the Ghana Business News $13.96 billion figure includes pledges of official finance, which have not yet reached the signed commitment stage. The total amount of Chinese finance in Ghana that the AidData team could verify as committed ODA is only $1.457 billion.

As many researchers have suggested, Chinese development finance defies many traditional Western categories of “aid” or “investment.” Our suggested system for classifying Chinese development finance flows is based on OECD standards, but we recognize this scheme is unfamiliar to many outside observers, including journalists.

We were also surprised to see our data used by Tesfa News to support the following claim: “China is by far Eritrea’s major development partner.” By our count, China’s total official financing to Eritrea from 2000 to 2011 ($361.9 million) was actually less than the funding it received from World Bank IDA ($531.1 million), the European Commission ($519 million) and the United States ($481.2 million) over that same period, according to AidData’s database.  Combined, these four donors provided 56% of all development finance to Eritrea since 2000 ($3.384 billion).

Ultimately, we want to see users undertake rigorous and responsible analysis of the data. To this end, we encourage those of you who may have questions about our methodology and our database to check out our Frequently Asked Questions page, or get in touch with us at china@aiddata.org.

Ze Fu (Class of ’16) is an AidData Research Assistant at the College of William and Mary. Brian O’Donnell is an AidData Project Manager.
 
Tags: media-based data collection (MBDC)China in Africa