China’s climate foreign aid after ministerial re-shuffle

How well can China run its climate foreign aid program outside the UN framework

by Wang Binbin

Editor’s note: Among the numerous types of foreign aid that China gives to other countries, climate aid is one that is still relatively new. First started in 2007, as a way to diffuse increasing international pressure on China for its ballooning carbon emissions, the program has, over the past decade, expanded both in terms of its coverage (from small island states most affected by climate change to a wide range of developing countries across the globe) and its size (from about 10 million USD a year to 300 million based on one UNDP estimation). Just like the AIIB, China’s south-south climate assistance program represents another attempt at reshaping an important aspect of global governance with “Chinese wisdom”. For instance, Chinese climate aid runs outside the United Nations Framework Convention on Climate Change (UNFCCC) regime, which differentiates obligations of developed and developing countries. Under that system, developed countries put money into the Green Climate Fund (GCF) to help developing countries combat climate change. China’s long-standing sensitivity around being recognized as a developing country, combined with its urge to show leadership on a key global issue, has prompted it to come up with its own version of climate aid that is not without institutional challenges. Wang Binbin’s new blog is an update of the latest development under this program, after the recent creation of a “China AID”, in the fashion of USAID and UK’s DFID.

4-3-640x330
Xie Zhenhua, China’s special envoy on climate change, demonstrates cookstoves in Myanmar (Source: Global Environmental Institute

One of the most closely-watched changes to come out of China’s recent ministerial shake-up was the creation in mid-April of the China International Development Cooperation Agency (CIDCA), equivalent to the United States Agency for International Development (USAID) or the United Kingdom’s Department for International Development (DFID) – agencies responsible for administering foreign aid and development assistance.

Although this sub-ministerial body does not have an official website yet, it got off to a quick start, announcing on May 16 that China would send emergency humanitarian aid to Kenya in response to severe flooding.

Despite its still undefined make-up and responsibilities, observers are already speculating about how the creation of CIDCA will affect China’s overseas aid, the Belt and Road Initiative, and wider South-South cooperation, including China’s climate change foreign aid to other developing countries.

Climate aid with “Chinese characteristics” 

China’s South-South climate cooperation has focused on providing aid to less developed nations commensurate with its position as the world’s largest developing country. The country’s overseas aid has had a climate change component for more than a decade and this has expanded over the years.

In 2012 the National Development and Reform Commission (NDRC) announced that funding would be doubled for climate change aid to about US$72 million a year. Subsequently, a project to donate materials to help countries respond to climate change got underway, headed by the NDRC’s Department of Climate Change and funded by the Ministry of Finance. Notably, this included the donation of a meteorological satellite to Ethiopia.

In September 2015, before the Paris climate conference, China stepped up its commitment when Xi Jinping announced a 20 billion yuan (US$3.1 billion) South-South Climate Cooperation Fund. Two months later, in Paris, the government clarified its scope: from 2016 China would fund 10 low-carbon demonstration projects, 100 climate change adaptation and mitigation projects, and 1,000 training places in developing nations (the “10-100-1000” plan).

More recently, the 19th Communist Party of China National Congress work report stressed that China would cooperate internationally on climate change to contribute to and lead in the construction of an international “ecological civilization”.

When it comes to international climate governance, China views developed nations as having a responsibility to developing countries, owing to their historical emissions of greenhouse gases. In contrast, China is assisting developing nations out of a sense of climate justice rather than obligation. This has shaped China’s climate aid program, which is “voluntary” and “supplementary”, and stands separate from that of developed nations, which are channeling climate finance contributions through the Green Climate Fund (GCF), a United Nations mechanism to help developing nations counter climate change.

Following the decision by President Trump to withdraw the United States from the Paris climate accord, China’s actions have been closely watched, as its pledge of 20 billion yuan to the South-South Climate Cooperation Fund was part of the Obama-Xi Joint Statement in 2015 that was made shortly before the Paris talks started. In that statement, the US made an equivalent pledge of US$3 billion to the Green Climate Fund. President Trump has said that the US will not honor the US$2 billion that remains to be paid to the GCF, while China appears committed to carry out its promised plan.

The shoe doesn’t fit

Providing direct material aid and training is relatively straightforward. However, other elements of the “10-100-1000” plan had to be implemented within a framework that was not fit for purpose. The mismatch prevented plans going ahead as scheduled.

The first issue was funding. The NDRC is responsible for macro-level planning and has no overseas remit. The Ministry of Finance’s rules require that the NDRC’s South-South climate cooperation spending and procurement take place inside China. The “10-100-1000” plan, therefore, had to be designed to fit that requirement, with the 100 mitigation and adaptation projects limited to material donations – and to those goods that could be purchased in China. This affected both the quality and pace of project delivery.

Similarly, the 10 low-carbon demonstration projects were originally intended to happen in industrial zones or residential neighborhoods in recipient countries, promoting general low-carbon development practices (in planning, management and infrastructure construction). But again, the requirement for procurement in China hindered progress.

Then there were personnel issues. As the only option was to buy goods at home, the NDRC’s Department of Climate Change needed to quickly develop new competences to ensure quality procurement: tendering processes, technical workflows, product standards, financial reporting, working across languages, negotiating, and assessing the needs of different nations. This was clearly too much to expect from a department previously responsible for climate change policy.

The final issue was communication. The domestic role of the NDRC means it has no direct links with other countries and so no way to directly communicate with recipient nations.

While the Ministry of Foreign Affairs traditionally handles overseas relationships, China’s expanding links with the rest of the world mean that the Ministry’s embassies abroad were already stretched. Although willing to help implement the plan, they lacked sufficient capacity to do so.

Faced with these constraints, those in charge had to come up with alternative approaches. For example, in August 2016 the NDRC’s Department of Climate Change toured south-east Asia, with the help of Oxfam, an international NGO, to assess the needs of developing countries. This helped to refine the “10-100-1000” plan and work around the department’s lack of international links.

The Department of Climate Change and the UN Development Program then held a “matchmaking” meeting to connect the needs of developing nations with types of support that China could provide.

In March 2017, China donated clean cooking stoves and domestic solar power systems to Myanmar, with project delivery entrusted to the Global Environment Institute, a Chinese NGO. These moves were all unprecedented.

Opportunities post-reshuffle

The reorganization of China’s cabinet ministries, announced at China’s Lianghui (Twin Sessions) in March of this year, brought seismic changes for climate and environmental governance, with responsibility for climate change reassigned from NDRC to the new Ministry for Ecology and Environment (MEE), which was formally established on April 16. Two days later, CIDCA was created, taking overseas aid responsibilities from the commerce, foreign affairs and finance ministries.

Future South-South climate cooperation is likely to take place within a joint MEE-CIDCA framework. This will help to resolve issues with funding, personnel and international links.

CIDCA is run by former NDRC vice minister Wang Xiaotao (pictured). On April 23, Zhou Liujun, former head of the Ministry of Commerce’s Department of Outward Investment and Economic Cooperation, and Deng Boqing, former ambassador to countries including Nigeria, were appointed as vice-directors. The structuring of the two new bodies should be completed by the end of June.

wang_xiaotao_meitu_1

The fact that the top three officials for CIDCA have been drawn from China’s powerful macro-economic planning department, its commerce department, and its foreign affairs apparatus bode well for its ability to coordinate with these ministries.

We can expect that arrangements for the “10-100-1000” plan will be improved once governance structures are clearer. While the changes should not have much impact on the more straightforward training program, the 100 adaptation and mitigation projects will be able to deploy a more flexible approach to aid that is not restricted only to material donations procured domestically.

CIDCA will benefit from established overseas aid systems moved over from the Ministry of Commerce (including material aid, turn-key project delivery, technical cooperation and training). This will mean MEE can more easily make use of CIDCA capabilities when designing South-South climate cooperation projects. Researchers also predict that development attachés may be stationed in Chinese embassies to manage China’s overseas aid. This would solve the lack of international links.

Most eagerly anticipated are the 10 low-carbon demonstration projects. Although initial work on these projects was hampered, a lot of planning has been done and resources are in place.

The new framework will allow MEE and CIDCA to work together to better combine aid, investment and trade. And the model of government-set standards to guide private investment and create green investment is regarded by some experienced figures as the ideal model for those demonstration projects.

Three relationships

It is worth noting that China’s arrangements for South-South climate cooperation were not originally limited to the “10-100-1000” plan.

In 2014, China donated US$6 million to support the UN secretariat’s promotion of South-South climate cooperation. In April that year the funding was used as seed capital for a Southern Climate Partnership Incubator (SCPI) announced by Ban Ki-moon. The SCPI is designed to foster partnerships (both bilateral and multilateral) to allow less developed countries to engage in policy exchange, capacity building, and to have access to technologies and knowledge that facilitate climate action.

Combined with the “10-100-1000” plan, China’s use of UN platforms represents a combination of domestic and international approaches to climate change cooperation.

Pushing China’s South-South climate initiative at the UN level has several advantages: it is intrinsically more multilateral, it is not limited by China’s own rigid bureaucratic and financial restrictions, and it takes advantage of the UN’s global reach.

The ministerial shake-up makes efficient implementation of the “10-100-1000” plan possible. Meanwhile, China’s support for South-South climate cooperation under the UN system is growing and starting to attract civil society forces. For example, the Qiaonyu Foundation donated 100 million yuan (US$15.6 million) for South-South climate cooperation, with US$1.5 million going towards running the SCPI.

In January this year the foundation signed an agreement with the United Nations Office for South-South Cooperation launching the Qiao plan, which will use the UN to identify potential recipients of funding.

South-South climate cooperation can be expected to take place between the Chinese government and the UN, across Chinese government departments, and between the government and civil society.

If those three relationships promote and strengthen each other, resulting in projects that meet recipient nation needs while furthering mitigation, adaptation, poverty-relief and environmental protection, then South-South climate cooperation will be successful.

 

Wang Binbin is a research fellow at Peking University’s International Organizations Research Institute. Parts of this article, first published on chinadialogue, are taken from the her new book, From Zero to Hero: China’s Transition on Climate Communication and Governance, published April 2018 by the Social Sciences Academic Press.

Journey to the West: What China tells itself about the Belt and Road Initiative

Ever since President Xi Jinping unveiled the Belt and Road Initiative (BRI) in late 2013, the massive infrastructure and connectivity initiative has captured the world’s imagination. Supporters see it as a timely injection of fresh energy to global development long held back by the West-dominated Bretton Woods institutions. Detractors, meanwhile, warn about the plan’s risk of raising developing countries’ debt burden, its potential climate impacts and the military – or even “imperialist” – ambitions of a rising great power.

Just as the international media has busied itself with deciphering, interpreting and guessing the intention of the BRI grand plan, China’s domestic media is also trying to make sense of the initiative. Not surprisingly, however, its point of departure and framing is markedly different from its peers in other countries. Putting aside state media outlets such as Xinhua and People’s Daily, which clearly have a mandate to positively portray the BRI, a scan of domestic media on the topic shows that Chinese media are producing information, observation, reflection and commentary that connects public perception with policy making, much like they would with day-to-day domestic news reporting.

With the BRI involving some of China’s most prominent financial and business entities, many of these media outlets are finance and business-oriented – China’s Bloombergs and WSJs. A review of four years of Belt and Road coverage, from when the initiative was first announced to end of 2017, by China’s two elite business weeklies, Caixin Weekly (财新周刊) and Caijing Magazine(财经杂志), gives us a glimpse of how the initiative is being portrayed inside China. Both news organizations, well respected for their journalistic professionalism, have produced a substantial body of coverage on the topic over that period, including feature stories, standard news pieces, opinion pieces and editorials. More than 100 such published pieces focus exclusively on the subject, a not so small portion given their weekly nature. On-the-ground reporting, though still relatively rare, constitutes an integral part of this growing coverage, with the footprint of Chinese reporters reaching countries as far as Tanzania and Sri Lanka.

CaixinCaijingcovers
Belt and Road stories on the covers of Caijing Magazine and Caixin Weekly

Contesting Ideas

Firstly, it is worth noting that the body of Caijing and Caixin media coverage shows clearly that Chinese discourse around Belt and Road is far from a coordinated monologue. Criticism (or rather “contesting ideas”) abounds, especially in the opinion pages. Scholars, officials and commentators use such media outlets as platforms to offer their views about how China should roll out the plan, sometimes challenging “mainstream thinking” on the issue.

When it comes to busting prevailing myth of the Belt and Road Initiative, such commentaries can be brutally direct. For example, Mei Xinyu (梅新育), a Ministry of Commerce (MOFCOM)-affiliated researcher, took aim at a popular perception of the China Pakistan Economic Corridor (CPEC), in particular the China-invested Gwadar Port. Many hailed it as a strategically brilliant maneuver to secure energy supply from the Middle East. Mei, however, directly critiqued the idea as prohibitively costly and, ultimately, a red herring, as Western “hostile forces” could anyway shut off oil supplies at source. Furthermore, Mei warned of the “excessive hyping of CPEC” by interest groups and suggested Chinese investment in Pakistan should hue more closely to commercial logic, rather than wild geopolitical strategy.

Broader critiques from a range of experts and think tankers have  questioned the wisdom of including the “Road” (the “Maritime Silk Road” that goes from the southern coast of China, through Southeast Asia and all the way to East Africa) in the Belt and Road Initiative, highlighting that it significantly increases the geopolitical complexity of the program (as compared to a much more focused Belt, connecting China’s landlocked western provinces with Central Asia and European markets). Others highlighted the risks associated with low returns from large infrastructure projects in developing countries and with the over-emphasizing of exporting overcapacity to other countries.

By publishing such critical voices, the two media outlets have maintained their status as the go-to platforms for critical observation and ideas. But in the larger context it is also more or less playing its accepted social role of “loyal admonishment”, an honest effort to correct and refine the course of a national undertaking, without totally rocking the boat. In other words, they are performing a valuable service to the greater national goal.

“Poster boys”

Despite its global publicity, the actual nature and content of the Belt and Road Initiative is still vague. Besides grandiose declarations of its general vision, no charters, institutions or elaborative policy papers exist that define the precise contour of the initiative, leaving it to mean everything and nothing to the outside world.

In response to this nebulousness, a considerable amount of Caixin and Caijing‘s reporting on the subject is organized around just a few high-profile, symbolic cases. In doing so, the news organizations help give form to the BRI, providing valuable “handles” for people to grasp onto when trying to understand the massive program. Going through the reports, a few “poster boys” stand out as major narrative shaping projects that the Chinese business media keep coming back to. These include China’s high speed rail projects across the globe, the deep sea ports of Hambantota and Gwadar in Sri Lanka and Pakistan, and investments in Myanmar, among others.

The cases depict a picture of the BRI as fundamentally about export (of technology and manufacturing capacity) and import (of resources), which will improve China’s security and positioning in the global market.

The high-speed rail stories run by the two media organizations over the past four years provide the most concrete and detailed account so far of a major, high-priority BRI effort. The “product” (China’s high-speed rail technology and the system attached to it) represents the epitome of “made-in-China 2.0.” No longer a low-cost labor-intensive mass product, it is a complex system of high-tech engineering-heavy industrial components that can compete with high-end manufacturing powerhouses such as Japan, Germany and France.

The stories also highlight one of China’s strategic goals in promoting BRI: moving China higher up on the global value chain. Instead of selling socks and T-shirts, China now exports standards (of railway systems) that would ensure advantage for a consortium of Chinese manufacturers, system designers, and maintenance technicians in overseas markets for years to come. And the goal is being pursued by a combined effort of high-level diplomacy (led by the Premier, Li Keqiang), financial backing (competitive loan packages from Chinese policy banks) and upstream-downstream coordination across the supply chain.

The pool of symbolic cases also contains tales of caution. A not insignificant portion of the Caijing and Caixin coverage is dedicated to failures, some of which are quite spectacular. Inside this “ledger of blunders” lie China’s botched effort to build Bahamas’ largest beach resort, its aborted attempt to open an iron mine in Gabon, and losses to the tune of 5.7 billion RMB in Brazil on agricultural investments. Such cases offer valuable lessons on potential risks along the Belt and Road, and shape domestic perceptions of the external environment, from political, legal and economic perspectives.

The quest narrative

Whether it’s loyal admonishment or lessons from symbolic cases, the stories on Caixin and Caijing share one common denominator: they picture BRI through the viewpoint of Chinese entities, companies, personnel or even products, and locate them in a journey that winds toward a predetermined destination.

The Caixin story of Mr. Chang Xuehui (常学辉) is emblematic of this storyline. The piece follows Chang’s career as a Chinese diplomat and corporate representative in Africa, which trails China’s involvement on the continent. He started his journey as a young medical aid worker to Djibouti in the early 1990s, later traded Chinese goods in Cameroon on behalf of an state-owned enterprise (SOE) from his home province and served as a commerce secretary at the Chinese Embassy in Gabon in the early 2000s to promote Chinese business. It was in Gabon that he became instrumental in securing a deal between the Central African country and China Machinery International, a Chinese SOE, to explore the controversial Belinga iron mine. The deal met with fierce resistance from the local community and environmentalists for its potential threat to the Invindo National Park and was later abandoned after Omar Bongo Jr. replaced his deceased father as President in 2009.

While the report highlights the environmental controversies around the project, it manages to present the controversies as setbacks in Chang’s quest for excellence as a broker of business between China and Africa. That quest ended tragically and violently in Mali, when Chang, then a senior manager representing China Civil Engineering Construction Corporation (CCECC), were killed in a terrorist attack at Radisson Blu Hotel in Bamako. He was negotiating a railway deal with his Malian counterparts.

The life story, at points poignant and touching, is a mirror to the bumpy roads of China’s “Going Out” efforts. There are problems, environmental or social, but these are obstacles to be overcome. A grander version of that storyline can be found in the above mentioned high-speed rail reports. Both Caijing and Caixin have dedicated multiple feature stories tracking every step of Chinese products’ stumbling tour around the globe: the setback in Thailand, the success in Indonesia, the shut door in Poland, the confusion and frustration in Mexico and the United States.

Just as the protagonists in the Chinese classic Journey to the West had to overcome 81 obstacles to finally reach the true teaching of Buddha in India, Chinese goods, services and businesses also need to prevail over myriad challenges before arriving at their own celebrated destination.

There is nothing intrinsically wrong with this approach to Belt and Road reporting. After all, those Chinese players, large SOEs, state banks, or multilateral institutions such as AIIB, are indeed at the center of most BRI developments. Following their point of view does provide a valuable angle as most of them are hardly accessible to media from outside China. It is still remarkable, however, that the two elite news organizations, bastions of journalistic professionalism in China, adopt it as their main viewpoint when they cast their gase outside of China. In the eyes of of the westward traveler, everything else retreats into the background, either as hurdles to go over or as tests of his character.

The absent civilian

This perspective is in stark contrast to how both Caijing and Caixin report on domestic issues. For years, such outlets have differentiated themselves from state media in their representation of the “civilian” perspective, amplifying voices of the powerless, the disadvantaged and the underrepresented. The plight of “ordinary people” often occupies the pages of those media, pressing authorities to respond.

As recently as November 2017, Caixin was sending its journalists to the slums of Beijing to witness how the city’s eviction campaign to clean up sub-standard residential buildings were affecting downtrodden migrant workers. It also dispatched teams of reporters to cover the impact of the coal-to-gas policy on poor villagers around Beijing, who, for the sake of air quality, were told to shift from coal burning to natural gas for winter heating, only to be hit by an unexpected gas shortage.

But the “civilian” perspective seems to disappear as soon as these media step outside China’s borders. There, they almost automatically don the hat of the Chinese state and look around with its perspective. Granted, on-the-ground reporting in BRI covered countries is still relatively rare, which makes it hard for reporters to get in touch with non-elite stakeholders in a remote country. Distance is a natural barrier for collecting local opinions about China-backed projects, which are often built in hard-to-access regions of countries suffering from chronic political instability and economic deprivation. When Caijing journalist Hao Zhou (郝洲) went on a reporting trip in Pakistan to assess the progress of the CPEC, he wrote that he needed to be chauffeured by a team of armed military guards everywhere he went, even to go just across the street, at Gwadar port.

When reporters did bring local community issues into their lens, they sometimes treated their views like fire hoops for Chinese actors to jump through. In a Caixin report about Sri Lanka’s Colombo port city project, a landmark piece of the BRI, the reporter allocated a section for the concerns from local environmental groups and fishermen about the potential damage from sand dredging in the harbor. For every specific complaint that the locals raised, be it the impact on coral reefs, or interference with fish migration routes, the report managed to get a response from the Chinese engineering company that claimed them addressed, one by one.

As Caijing‘s international affairs editor Yuan Xue (袁雪) noted in one of her reports about Chinese involvement in Tanzania, there is already awareness among Chinese players overseas that the lack of interaction with civil society and local communities would become a limiting factor to how far China could go with its development agenda along the Belt and Road.  If that is really the case, then for the Chinese media, telling “civilian-centered” Belt and Road stories to their Chinese audience, as they do with domestic stories, could be a good starting point to create the initial society-to-society bonding that would be the building block for sustainable and inclusive development supported by China overseas.

At Caijing, there are already attempts to put civil society at the center of reports. Sun Aiming(孙爱民)’s report on the growing pains of Myanmar’s booming NGO sector is a good example of how such storytelling delivers insights about the lens through which local civil society sees Chinese projects. It is more stories like this that would be a real service to the nation.

 

This blog aims to promote civilian-centered storytelling by providing a platform for documenting, reflecting and critiquing Chinese “storytelling” about its footprint overseas, and by engaging active Chinese storytellers such as journalists, editors, NGO workers, think tank researchers, etc. in a dialogue with their international peers.

Why “Panda Paw Dragon Claw”?

China’s increasing visibility and influence on the global stage have induced a mixed response.

Many in the field of studying Chinese involvement overseas have invoked the image of the dragon. Professor Deborah Brautigam, an authoritative scholar on China’s aid programs in Africa, named her groundbreaking book about that subject “the Dragon’s Gift”. Professor Kevin Gallagher, a Boston University expert on China-Latin America economic relations, titled one chapter in his book “the Dragon’s footprint”.

Fully aware that the dragon metaphor might be clichéd and stereotypical, we believe that it nevertheless captures the menacing posture that many associate with China. Its ambitious global program to boost infrastructure building, to finance development projects and to expand the reach of its industries overseas at times seem like the muscular claw of the dragon trying to snatch its preys, be it energy or mineral resources.

But we should not forget China’s other global image, which is more cuddly and warm, as represented by the giant panda. Like the affection those chubby animals invoke in zoos across of the globe, many Chinese projects and initiatives overseas are actually welcomed and embraced. These include its longstanding medical aid program to Africa since 1960s, and more recently, its South to South climate aid.

The overused and value-neutral concept of “footprint” is inadequate in its imagery force to truly reflect the complexity of China’s involvement beyond its own borders. Here we take the liberty of juxtaposing the two polarized images, panda paw and dragon claw, and leave it to our readers to decide which one they see. We hope the site can work like a hologram.

panda-paw_logo_small-01

We hope the site can work like a hologram.

We are also acutely aware of the fact that stories about China’s overseas adventures are often told from the standpoints of elites, in and outside the country. While documenting and analyzing the decisions and activities of politicians, financial institutions and business leaders are important, telling the story from the “civilian perspective”(民间视角) is also crucial to complete that story. To us, the words from a Sri Lankan fisherman are no less relevant than those of a European finance minister.

This blog is started by those who aspire to tell a better story about China’s involvement beyond its borders. We are journalists, campaigners, analysts, scholars and practitioners with years of experience navigating Chinese politics, bureaucracy, finance and their ramifications overseas. We hope that it will serve as a convening place for the community of China “storytellers” to share, discuss and debate about China’s impact globally, with a particular focus on developments in the energy and environmental fields.