Scrutiny of aid to China is growing

BEIJING — China spent tens of billions of dollars on a dazzling 2008 Olympics. It has sent astronauts into space. It recently became the world's second-largest economy. Yet it gets more than $2.5 billion a year in foreign government aid — and taxpayers and lawmakers in donor countries are increasingly asking why.

With the global economic slowdown crimping government budgets, many countries are finding such generosity politically and economically untenable. China says it's still a developing country in need of aid, while some critics argue that the money should go to poorer countries in Africa and elsewhere.

Germany and Britain have moved in recent months to reduce or phase out aid. Japan, long China's biggest donor, halted new low-interest loans in 2008.

"People in the U.K. or people in the West see the kind of flawless expenditure on the Olympics and the (Shanghai) Expo and it's really difficult to get them to think the U.K. should still be giving aid to China," said Adrian Davis, head of the British government aid agency in Beijing, which plans to wrap up its projects in China by March.

"I don't think you will have conventional aid to China from anybody, really, after about the next three to five years," he said.

Aid to China from individual donor countries averaged $2.6 billion a year in 2007-2008, according to the latest figures available from the Organization for Economic Cooperation and Development.

Ethiopia, where average incomes are 10 times smaller, got $1.6 billion, although measured against a population of 1.3 billion, China's share of foreign aid is still smaller than most. Iraq got $9.462 billion and Afghanistan $3.475 billion.

The aid to China is a marker of how much has changed since 1979, when the communist country was breaking out in earnest from 30 years of isolation from the West. In that year, foreign aid was a paltry $4.31 million, according to the OECD.

Today's aid adds up to $1.2 billion a year from Japan, followed by Germany at about half that amount, then France and Britain.

The U.S. gave $65 million in 2008, mainly for targeted programs promoting safe nuclear energy, health, human rights and disaster relief. The reason Washington gives so little is because it still maintains the sanctions imposed following the 1989 military crackdown on pro-democracy demonstrators at Tiananmen Square, said Drew Thompson, a China expert at the Nixon Center in Washington, D.C.

China is also one of the biggest borrowers from the World Bank, taking out about $1.5 billion a year.

Asked why China still needed foreign aid after making so much economic progress, the Commerce Ministry said that China remains a developing country with 200 million poor people and big environmental and energy challenges.