A CAUTIOUS NEW APPROACH CHINA’S GROWING TRILATERAL AID COOPERATION A CAUTIOUS NEW APPROACH CHINA’S GROWING TRILATERAL AID COOPERATION DENGHUA ZHANG PACIFIC AFFAIRS SERIES Published by ANU Press The Australian National University Acton ACT 2601, Australia Email: [email protected] Available to download for free at press.anu.edu.au ISBN (print): 9781760463472 ISBN (online): 9781760463489 WorldCat (print): 1145171193 WorldCat (online): 1145170978 DOI: 10.22459/CNA.2020 This title is published under a Creative Commons Attribution-NonCommercial- NoDerivatives 4.0 International (CC BY-NC-ND 4.0). The full licence terms are available at creativecommons.org/licenses/by-nc-nd/4.0/legalcode Cover design and layout by ANU Press This edition © 2020 ANU Press Contents Acknowledgements . vii Abbreviations . ix Glossary of Chinese Terms . xiii List of Figures . xv List of Tables . xvii 1 . Introduction . 1 2 . Conceptualising Chinese Aid Motivations . 27 3 . China’s Foreign Aid and Trilateral Cooperation: Interest Calculations, International Engagement and Domestic Institutions . 51 4 . The UNDP as a Catalyst for China’s Development Cooperation: The Case of the China–UNDP–Cambodia Trilateral Cassava Project . 107 5 . Peaceful Coexistence in the Pacific? China–Australia– Papua New Guinea Trilateral Malaria Project . .. 147 6 . A Tango of Two Superpowers: China–US–Timor-Leste Trilateral Cooperation on Food Security . 191 7 . Assessing China’s Trilateral Aid Cooperation and Foreign Aid Reform . 225 8 . Conclusion . 253 References . 263 Acknowledgements The idea for this research emerged when I was working as a Chinese diplomat in the Pacific region between 2006 and 2011. I was puzzled by the lack of development in the island countries despite their endowment of fishery resources and a large inflow of foreign assistance. I also witnessed the rapid growth of Chinese aid to the region and the inadequate engagement between China and traditional donors. These observations prompted me to seriously consider whether and how different types of donors could cooperate to deliver aid and support the development in recipient countries. This led to my PhD research on China’s trilateral aid cooperation in the Asia-Pacific region, which in turn has strengthened my interest in the region and in the disciplines of international relations and development studies. This book is based on my PhD thesis, which was approved by The Australian National University (ANU) in 2017. I wish to acknowledge the valuable assistance that I have received during my preparation of this book manuscript and PhD study, without which this mission could not have been completed. It has been a process of exploration, commitment and self-discipline, as well as one of love, pain and joy. I am grateful to Dr Stewart Firth for his kind support while I was converting my PhD thesis into this book. I am also deeply indebted to Associate Professor Sinclair Dinnen, Dr Graeme Smith and Dr Stewart Firth for their great support of my PhD study. Their motivation, patience and immense knowledge of China and the Asia-Pacific region have guided my research. I would also like to thank the rest of my panel: Professor Katherine Morton and Professor Michael Leach. Professor Katherine Morton offered her valuable comments regarding my whole thesis. As a top expert on Timor-Leste, Professor Leach offered his comments for vii A CAUTIOUS NEW APPROACH Chapter 6 regarding the China–US trilateral aid cooperation in Timor- Leste. Professor Morton and Leach’s comments have made my analysis more rigid. I would also like to express my sincere thanks to Associate Professor Nicole Haley and the Department of Pacific Affairs (DPA, formerly known as the State, Society and Governance in Melanesia Program) for offering me the PhD scholarship. My PhD research is supported by an Australian research training program scholarship. The DPA has been my home and I am indebted to the support from my colleagues there. Special thanks go to Ambassador and former Australian Agency for International Development (AusAID) Deputy Director-General James Batley, who provided kind advice for Chapter 5 and on the China–Australia trilateral aid cooperation, as well as to former AusAID senior official Steve Hogg, who provided valuable advice regarding my research program. Many thanks also go to other friends and colleagues at ANU, whose assistance during my PhD study and field work trips I have greatly valued. I am also grateful to all those who had kindly participated in my interviews during the field work stage of my research—in Australia, Cambodia, China, New Zealand, Papua New Guinea, Samoa and Timor-Leste—as well as to friends and interviewees from the United Nations Development Programme. Special thanks go to Dr Carolyn Brewer, a reputable editor at ANU, for editing my PhD thesis and to Capstone Editing for copyediting my book manuscript. I must also thank ANU Press and the DPA for providing publication subsidies for this book. My love and thanks go to every member of my family in China and Australia. I am particularly grateful for the full support from my wife, Dr Zihan Yin. Her understanding, support and love have empowered me along my PhD and academic journey. I greatly benefited from her experience in completing her own PhD at Victoria University of Wellington in 2014 and in her academic research. Finally, thanks to ANU! As its motto states, ‘Naturam primum cognoscere rerum’—‘Above all to find out the way things are’. I hope this spirit of exploration will always guide me in the journey ahead. viii Abbreviations ADB Asian Development Bank AIBO Academy for International Business Officials AIIB Asian Infrastructure Investment Bank ANU The Australian National University ASEAN Association of Southeast Asian Nations AusAID Australian Agency for International Development BRI Belt and Road Initiative BRICS Brazil, Russia, India, China and South Africa CAITEC China Academy of International Trade and Economic Cooperation CASS China Academy of Social Sciences CATAS China Academy of Tropical Agricultural Sciences CDC Council for the Development of Cambodia CICETE China International Center for Economic and Technical Exchanges CICIR China Institutes of Contemporary International Relations CIDCA China International Development Cooperation Agency CPC Communist Party of China CPHL central public health laboratory DAC Development Assistance Committee DFA Department of Foreign Aid (China) DFAT Department of Foreign Affairs and Trade (Australia) DFID Department for International Development (UK) ix A CAUTIOUS NEW APPROACH DITEA Department of International Trade and Economic Affairs (China) DNPM Department of National Planning and Monitoring (PNG) DPA Department of Pacific Affairs (ANU) FAO Food and Agriculture Organization FOCAC Forum on China–Africa Cooperation GDP gross domestic product HHISP Health and HIV implementation services provider IMR Institute of Medical Research (PNG) IPRCC International Poverty Reduction Centre in China LNG liquefied natural gas MAF Ministry of Agriculture and Fisheries (Timor-Leste) MAFF Ministry of Agriculture, Forestry and Fisheries (Cambodia) MCA Ministry of Civil Affairs (China) MDG millennium development goal MFA Ministry of Foreign Affairs MOFCOM Ministry of Commerce (China) MoF Ministry of Finance MOST Ministry of Science and Technology (China) MOU memorandum of understanding NGO non-governmental organisations NHFPC National Health and Family Planning Commission (China) NIPD National Institute of Parasitic Diseases (China) ODA official development assistance OECD Organisation for Economic Co-operation and Development PNG Papua New Guinea PRC People’s Republic of China SASAC State-owned Assets Supervision and Administration Commission x ABBREViatiONS SDG sustainable development goal S&ED strategic & economic dialogue SOE state-owned enterprise SEZ special economic zone UK United Kingdom UN United Nations UNDP United Nations Development Programme UNIDO United Nations Industrial Development Organization UNTL National University of East Timor US United States USAID United States Agency for International Development WHO World Health Organization WTO World Trade Organization xi Glossary of Chinese Terms The transcription of Chinese characters into the Roman alphabet follows the Pinyin system: guikou danwei Point of contact hexin liyi Core interests hongyi rongli Uphold justice and pursue shared interests jiang zhengzhi Talk politics jianshe hexie shijie Build a harmonious world qinghao Sweet wormwood (Artemisia annua) shishi qiushi, liangli erxing Be practical and act within one’s capacity taoguang yanghui Hide the capacity and keep a low profile xiaokang shehui A moderately prosperous society yijing cuzheng Use economics to promote politics yili xiangjian, yili weixian Take a right approach to justice and interests by prioritising justice over interests you ji you qu To take while giving yousuo zuowei Make greater achievements zhanlue jiyuqi Period of strategic opportunities zhengjing jiehe Combine politics and economics zhengque yiliguan Right concepts of justice and interests zhengzhi Politics zhengzhi gua shuai Politics takes command zili gengsheng Self-reliance zouchuqu zhanlue Go global strategy xiii List of Figures Figure 1. Top 10 donors globally, 2010–2012, USD billion .........8 Figure 2. Process: Tracing Chinese trilateral aid cooperation ........45 Figure 3. International reports on China’s foreign aid .............60 Figure 4. Domestic reports on China’s foreign aid ...............60 Figure 5. China’s