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Canadian International Development Agency, CIDA

Canada’s China Foreign Aid Policy



The average person, when considering the requirements for a country to be a foreign aid recipient, would envision a developing country where the majority of the population is living in poverty. They certainly would not consider a country with a booming economy, a healthy trade balance, large foreign currency reserves, one of the world’s largest armies and foreign investments and a foreign aid programme of its own, as a suitable candidate. Yet that is just the case with regards to China today.

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In 1983 Canada and China signed a Development Cooperation agreement. In the first twenty years, the Canadian government contributed nearly $1 billion in foreign aid, most of it through CIDA (Canadian International Development Agency). In CIDA’s words, this aid was for ’a targeted program of specialized cooperation in which Canadian experience and expertise support China’s reforms in good governance, human rights, and democratic development and in environmental sustainability.’ Where is the evidence for any such ’reforms’, particularly in human rights and democratic development. Despite contributions for this purpose, little progress has been made in any of these areas. Only six years after signing the agreement, the communist Chinese government crushed the democracy movement. Since then it has continued to suppress Tibet, kidnapped the Panchen Lama, and persecutes pro-democracy dissidents, followers of the Falun Gong movement and other religious groups in China. There are very few human rights, as well as little democracy in the country, where the Chinese Communist Party is the sole political power, accountable to no-one but its own congress. CIDA admits that China ’has made enormous economic strides’ in recent years. For this reason ’Canada does not provide funds to the government of China. Instead, we provide Canadian expertise to assist the country in undertaking reforms that China, itself, is implementing and funding. The cooperation program involves many Chinese and Canadian partners including government agencies, public and private sector enterprises, academic institutions, as well as community based and other civil society organizations.’ While Canadian groups involved include non-governmental organizations (NGOs), let us not deceive ourselves into believing that they are working with their counterparts in China. There is no way any of these experts is allowed contact with political dissidents or human rights activists. Those who they do meet most certainly have been thoroughly vetted for their political loyalties and views. Furthermore, as all these programmes are totally dependent upon the approval and cooperation of the Chinese communist government, one can only wonder at their actual effectiveness and success. According to CIDA's Country Development Programming Framework (CDPF), it plans to spend $250 million between 2005 and 2010, on the old stand-bys: human rights, democratic development, good governance, environmental sustainability and others. Foreign aid proponents and the pro-China lobby will maintain that since Canadian experts are being paid by CIDA, the money is not really going to China. However, that is a mute point. The expertise that these experts are providing is being given to China for free. Canadian taxpayers are footing the bill, which could quite easily be paid by the Chinese. If China is truly interested in foreign or Canadian expertise in the area of ’human rights, democratic development, good governance, and environmental sustainability’, it clearly has the capability to pay for it itself, and not just the small contributions it presently makes! While CIDA is the most recognizable entity through which foreign aid is channeled to China, another source of Canadian assistance is the Export Development Corporation (EDC). Over recent years it has provided, in the advanced technologies and telecommunications field, $841,884,442.32 in short-term and medium to long-term financing, including various kinds of insurance. There is no real information as to what kind of projects receive EDC funding. Nor is there any way of knowing to what purpose these technologies will be put. For all we know they may be used to further persecute dissidents, human rights activists and other groups presently on Beijing’s hit-list. One of the EDC’s prime borrowers is the Bank of China. Other Chinese government owned financial institutions, which have a relationship with the EDC, are the State Development Bank of China, the Export-Import Bank of China and the Industrial and Commercial Bank of China. Canadian telecommunications companies will claim that these loans help them do business in China. For lack of a better comparison, it is as if your local family variety store would lend thousands of dollars to Donald Trump or Frank Stronach, to ensure that they patronized their business. This EDC policy raises an interesting question. Would these same companies be equally successful in promoting or selling their products if the Canadian government did not provide these loans? Are these loans in actual fact little more than bribes? How are these loans repaid? Are they interest free, thus providing additional aid at Canadian taxpayers’ expense? While one branch of the government was handing out aid to China, another branch (Natural Resources Canada) was holding meetings with Chinese ministers and mining representatives to ’facilitate dialogue between interested Canadian and Chinese parties towards establishing mining joint ventures or any other investment options in Canada.’ Chinese direct investment in Canada has grown from $54 million in 1991 to $220 million in 2004, when China Minmetals Corporation, a state-owned company, unsuccesfully attempted to buy Noranda Inc. and Falconbridge Limited. Then in 2005 China invested in two tar sands and one gold mining company. China’s National Offshore Oil Corporation (CNOOC) paid $150 million for a 1/6 interest in Calgary based MEG Energy Inc., while its Sinopec Group obtained a 40 per cent interest for $105 million in Synenco Energy Inc.’s Northern Light oilsands project in Alberta. The Zijin Mining Group invested $1.95 million in Vancouver-based Pinnacle Mines Ltd. Clearly China is not an impoverished country if it has millions to invest in Canada alone. Reasons why Canada should reconsider, or more specifically cancel, further foreign aid to China: 1) China has $1.43 trillion in foreign currency reserves, sufficient amount to pay for the experts and expertise that at present is being provided through CIDA by Canadian taxpayers. 2) From a Canadian trade deficit of $1.1 billion in 1995, the trade imbalance between Canada and China has grown by leaps and bounds reaching $7.6 billion in 2000 and $13.8 billion just three years later, in China’s favour. By 2004, imports from China were $24.1 billion, a 30 per cent increase over the previous year! 3) In 2004 China became the third largest trading nation after the US and Germany. With exports of $1.15 trillion US and imports of $561.4 billion, the balance of trade is greatly in its favour. 4) China’s defence budget is $30 billion and its army is the biggest in the world. 5) While Western democracies are concerned about what is happening in the Darfur region of the Sudan, China not only supplies arms to that country, but protects it from UN resolutions and action. In addition, it has invested about $4 billion U.S. in that country and imports about 10 per cent of its oil through the China National Petroleum Corporation built pipeline. 6) China has given aid to African countries from whom it is buying oil and gas, repressive regimes like Nigeria, Sudan and Angola. In 2006, a China-Africa summit was held in Beijing, at which China provided aid, technology and scholarships to the visiting African heads of state, in an effort to gain political influence in the region, and ensure it will get access to Africa’s oil, gas and mineral resources. 7) China supports repressive regimes around the world, such as North Korea, Sudan, Zimbabwe and Myanmar (Burma), a clear indication of its lack of respect for human rights. Whenever the UN tries to take action against any of these countries, such as Myanmar in late 2007, China uses its position to protect them. Its largest aid recipient is North Korea, a dictatorship whose leader lives in luxury while his people starve to death. 8) China is a nuclear power and also has its own space programme. 9) December 2007, China invested $5 billion in the brokerage company Morgan and Stanley. Here is a clear indication, if more proof was needed, that it is not short of funds to invest in its own country, or to help alleviate the poverty to be found there. However, it prefers to use its immense resources to gain political influence around the world, rather than concern itself about its impoverished citizens. With the Communist Party and an immense army in total control of the country, there is no need to seek favour with the disadvantaged. Unlike Western democracies, there is no electorate to be answerable to for its policies. These are more than enough reasons for the present Harper government to take the bold decision to stop providing foreign aid of any kind to China. Any country that can contribute billions annually in its own foreign aid programmes, not to mention one that is the fastest growing economy in the world, is not an appropriate candidate for continued foreign aid. One thing is certain, no future Liberal government will make such a momentous decision. This is clear from the way previous Liberal governments, from Trudeau to Chretien to Martin, have treated relations with China. Hon. Raymond Simard (Parliamentary Secretary to the Minister of International Trade, among other positions), reported in Hansard on Nov. 16, 2005, that according to statistics given him during a trip to the region in 2004, ’60 per cent of the building cranes in the world were in China’ and that ’between 150 million and 250 million middle class now exist both in India and China.’ Yet China remains the darling of Canada’s foreign aid community and is either the second or fourth recipient of Canadian foreign aid, depending upon the year or which data one looks at. The most telling indication of the Liberal government’s misconceptions about the effectiveness of Canadian foreign aid to China, and Canada’s actual influence on its policies, was made apparent in early 2005. Aileen Carroll, then Minister of International Cooperation, in the House of Commons refused to stop aid to China, on the grounds that: "China influences hugely and will continue to influence the international scene. As such, it is very much incumbent on Canada to continue to work with the groups to build freedom in that country, to develop human rights and to develop a rules-based society ...... "We are helping China grow and influence it in the right way." If anyone thinks that Canada has the influence to steer Chinese policies towards democracy and a respect for human rights, they are not only incredibly naive, but totally lacking in any semblance of common sense. A country that supports dictatorships or repressive regimes such as North Korea, Sudan, Myanmar, etc., is clearly not interested in democracy or human rights. The problem here is that Canada is not alone in providing foreign aid to China. Among other countries are Japan, Germany, France, Australia and Great Britain, to name but a few, whose aid comes to billions of dollars. What is fuelling this misguided policy? Are businesses using their economic clout to influence their respective governments that business interests should take precedence over matters of principle? It is time the Western democracies, all of whom have increasing trade deficits with China, stopped providing foreign aid to a country which clearly no longer belongs to the ’have-nots’ of the world. Historian, genealogist, political observer / commentator and researcher, as well as photographer, Branka Lapaine received her BA from the University of Toronto; PH.D. from University of London, England. Publisher of The Phoenix, a political publication which ran from 1986 to 1991, she is the author of several booklets (CUSO and Radicalism, etc.) and numerous articles. Branka is also the author of a genealogical guidebook.


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Guest Column Branka Lapajne -- Bio and Archives

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