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Ministry of Commerce Holds Briefing on Measures for Administration of Foreign Aid

Hu Suojin: Good afternoon, dear friends from the media. China’s Ministry of Commerce released the Measures for the Administration of Foreign Aid on November 15. It is the first comprehensive departmental regulation on the management of foreign assistance and of realistic guiding significance and long-term influence on the development of China’s foreign assistance.

The ministry has the briefing today to interpret the main contents of the Measures and answer your questions. Present at the briefing include Assistant Minister of Commerce Zhang Xiangchen, Director of the Department of Foreign Assistance Wang Shengwen, Deputy Director of the Department of Foreign Assistance Yu Zirong and Liu Junfeng.

First of all, let’s welcome Assistant Minister Zhang Xiangchen to give us an introduction to the Measures.

Zhang Xiangchen: Thank you for attending today’s briefing. We all know that foreign assistance is an important part of China’s foreign strategies, and also an international obligation that China must fulfill. In the past 60 years, China has always adhered to the principle of not interfering in the internal affairs of the recipient countries, and created a unique mode of foreign assistance with Chinese characteristics. During the 60 years, China has provided about 400 billion yuan of assistance to 166 countries and international organizations in total. We have constructed more than 2,700 projects of complete plants, which have become local landmarks and monuments of friendly cooperation between China and recipient countries. We have also dispatched more than 600,000 of assistant personnel and trained about 12 million talents and professionals for the recipient countries. Foreign assistance is a noble but arduous cause. During the 60 years, more than 700 Chinese foreign assistance personnel sacrificed their lives. Chinese delegations would visit the Chinese Martyrs’ Park of the Tazara Railway every time when they visit Tanzania, expressing the respect and commemoration to the martyrs buried in the foreign country. China’s assistance has helped those in distress and aided those in peril, and not only about giving a fish, but teaching them to fish, promoting the economic and social development of the recipient countries. China’s assistance has gained great reputation from the world and become a model of South-South cooperation.

In the new era, both the international and domestic situation has witnessed great changes. The Party Central Committee with Xi Jinping as Secretary General has put forward a series of important strategic deployments including the neighborhood diplomacy policies of “amity, sincerity, mutual benefit and inclusiveness”, the policies to Africa of “sincerity, real results, affinity and good faith”, the Belt and Road Initiatives, and the right approach to morality and interests. With the advancing of China’s national strength, the expectations of the recipient countries for China’s strengthening aid are even higher. Taking into account the changes in domestic and international situations, the Ministry of Commerce has launched the work of comprehensively deepening reform of the foreign aid administration mechanism, and the reform is processing progressively and smoothly. The Measures for Administration of Foreign Aid we will discuss today is an important part of the reform. We call it a comprehensive departmental regulation, and a series of supporting documents will be issued after the issue of the Measures to provide the reform a set of legal systems.

The Measures is of great significance at present. Firstly, the introduction of the Measures is an inevitable requirement of the spirit of rule of law of the central government. Since the 18th national congress of the Communist Party of China (CPC), the central government has paid high attention to rule of law, stressing the implementation of the basic principal of rule of law and accelerating the construction of a socialist country under rule of law. The Decisions of the Central Party Committee on Promoting Rule of Law passed by the Fourth Plenary Session of the 18th CPC Central Committee put forward higher requirements to rule of law and administration of law. The Measures is formed on the basis of the practical experience of China’s foreign aid, clarified the basic institutional framework of foreign aid administration and lay a legal foundation for the foreign aid administration. Secondly, the introduction of the Measures is an important guarantee of deepening reform on foreign aid administration. The Measures includes the new institution set up in the system reform of foreign aid management, and reflects the new achievements of the reform, showing clearly the direction of the reform of foreign aid, and providing a system basis for the following-up implementation of the reform. Thirdly, the introduction of the Measures is a fundamental need of promoting sustainable and healthy development of foreign aid. The practice and experience in foreign aid in the 60 years has proven the effectiveness of the foreign aid with Chinese characteristics. Through the introduction of the Measures, the management experience of Chinese foreign aid was summarized and the mature methods were concluded, extracted and upgraded to regulatory frameworks, which will benefit further institutionalization, standardization and scientification of foreign aid administration, and play a guiding role for the development of foreign aid in the long run.

The Measures consists of eight chapters and 51 articles, covering mainly seven aspects. Firstly, the definition, objects and basic principles of foreign aid are stipulated, and the management responsibilities of the Ministry of Commerce, the economic and commercial counsellor’s offices of the embassies and governmental commercial departments are clarified. Secondly, policies and planning management of foreign aid are standardized, including formulating the instructions of mid- and long-term policy planning and country aid, and the construction of the reserve of foreign aid projects. Thirdly, three kinds of aid funds including non-reimbursable aid, interest free loan and concessional loan and their main applications are stipulated; five kinds of major projects are stipulated, in order to reserve the system connector. Fourthly, the approval principles and procedures of foreign aid projects are stipulated, and the requirements for the signing of an approval agreement are clarified. Fifthly, it is stipulated that the Ministry of Commerce be responsible for the supervision and management of the safety, quality, function, schedule and fund using of foreign aid projects through main body management, bid and tender, contracts and budget fund. Sixthly, the rights and obligations of foreign aid personnel when carrying out foreign aid tasks are stipulated, and the responsibilities of Chinese subjects of implementation and governmental departments on the treatment security of foreign aid personnel are clarified. Seventhly, the legal liabilities of the subjects of foreign aid projects, governmental officers and personnel of other related institutions are stipulated.

The above is the main situation of the Measures. Today, I, together with some officers from the department of foreign aid, am willing to answer your questions on the Measures. Thank you.

Hu Suojin: Next, let’s begin with the questions. Considering the time limit and more chances to ask questions, one journalist is only allowed to raise one question. Please inform us of your media name before your question.

China News Service: Assistant Minister Zhang, what new highlights of the reform of foreign aid administration are manifested in the Measures?

Zhang Xiangchen: We have determined a principle in the undergoing reform of the foreign aid administration system, that is, innovating management, optimizing the team, standardizing competition and implementing responsibilities, which is the main idea of the reform. We can say that the Measures manifests our ideas of reform, specifically in the following aspects:

Firstly, the transformation of government functions. The Measures is a reform document. In the past, the government administrated more specific affairs in foreign aid. According to the requirements of the reform of the national administrative system, and the features of foreign aid, we have shifted the focus of administration to macropolicy study, building of laws and regulations and approval and evaluation of projects, especially strengthening the national policy management and mid- and long-term planning of foreign aid.

Secondly, the modes of implementation and management of foreign aid projects are to be innovated. Traditionally, foreign aid projects are all implemented by the Chinese side. With the changing situation, some recipient countries have possessed the ability to conduct some projects. Therefore, we are gradually promoting cooperation with recipient countries to let them conduct some projects. That is the mode of “localization”. Besides, in the past, the management of the complete sets of foreign aid projects is divided into several links including design, building and supervision, with many participant subjects. Now, according to international experience and domestic practice innovation, we have introduced the mode of “project management plus projects contracting”, which is in experimental now and will be spread if succeeded.
Thirdly, the prophase management of the approval of foreign aid projects is to be improved. Approval management is the source of foreign aid work, and the quality of the approval work concerns the realization of the aim of foreign aid. Therefore, the Measures especially stresses approval management, urging for comprehensively strengthening approval management and enhancing the scientificity of the approval work.

Fourthly, the management system of projects contracts should be set up and optimized. The Measures stresses that implementation contracts should be signed by governmental departments and implementation subjects, and the rights and obligations of the two parties should be clarified in the contracts.

Fifthly, the competitive bidding system of foreign aid should be optimized. This is a key link. Our principle is high quality and good price, that is to say, we will choose the best enterprises to do the best projects. According to the Measures, the bidding management system of foreign aid should be optimized and a reasonable pricing mechanism should be set up through revising the bidding evaluation principle.

Sixthly, the responsibilities of quality guarantee of foreign aid should be implemented. Foreign aid concerns the national image, so no ignorance nor jerry-built projects are allowed. The Measures incorporates the long-term quality guarantee and supporting technological service of the complete set projects into the management range. The quality guarantee liability of the implementation subjects within a reasonable period should be clarified in the contracts. And administrative and economic punishment should be given to the implementation subjects that fail to fulfill the quality guarantee liability and cause harmful effects.

International Business Daily: How does the Chinese government conduct and administrate foreign aid projects? Do foreign sides assume any responsibilities during the implementation of the projects?

Yu Zirong: The Chinese government mainly adopts the mode of project assistance, which is a great characteristic of China’s foreign aid. There are now five kinds of projects, including complete set projects, referring to all kinds of construction projects in foreign aid actually, material aid projects, technological projects, human resources development, and volunteer service. At present, the Ministry of Commerce has formulated specific management methods for each one.

According to the Measures, foreign aid projects are implemented in three ways. The first one is the traditional mode of “handing in keys”, that is to say, the project is conducted all by the Chinese side and transferred to the recipient government after completion. The second one is cooperative implementation between China and the recipient party. On the basis of the governmental agreement, the division of the work of the two parties will be clarified, and both parties would assume their responsibilities according to the agreement. The third one is localization. With the changing situation, more and more recipient countries have required to gain not only the projects, but also the capacity building and take part in the implementation of the projects. Therefore, China has begun to try to transfer the implementation responsibility to competent recipient governments on the basis of external supervision, fully playing the subjective initiative of the recipient parties. The mode has been put into trial use in some surrounding countries, with good effects, and has been welcomed by them.

The features of foreign aid projects are implementing locally, operating locally and benefiting the local. Therefore, any foreign aid project cannot be conducted without the cooperation of the recipient parties. Taking the traditional “handing in keys” projects of the Chinese government for example, the foreign sides cooperate with the Chinese side in many aspects. For instance, the foreign sides need to provide all kinds of basic project materials in order to support China to do the pre-stage demonstration and feasible studies. When implementing a project, the recipient government should assume some fundamental work, such as providing the site and being responsible for removing and demolition, as well as the municipal facilities. After the completion and transfer of the project, the recipient party should be responsible for the subsequent operation, security and management. At the same time, the foreign sides are also responsible for providing convenience to China to organize the implementation of the projects, such as the entry of Chinese materials and equipment, and the entry and residence of Chinese personnel, as well as the treatment of exemption of duties. Besides, the recipient countries, especially many developing countries, are faced with serious security problems, so the governments of the recipient countries should be responsible for providing necessary security assurance to the engineering and technical personnel from China. Therefore, the success of every foreign aid project is the result of the joint implementation and responsibility of both China and the recipient country. The Measures makes specific stipulations in this respect, providing a good legal base for further implementation of the responsibilities of the recipient countries.

China Economic Net: Director Liu, Western media criticized that the aim of China’s aid to Africa is to plunder resources and seize the market, and named it as “New Colonialism”. What’s your opinion on it?

Liu Junfeng: First of all, we must make it clear that such a criticism is entirely groundless, and irresponsible.

Firstly, the aim of China’s foreign aid is to help the recipient countries overcome poverty and difficulties, improve people’s livelihood, promote economic and social development and strengthen their capacity of independent development. This is our principle, and we have been always following the principle during the 60 years of foreign aid. Following the spirit of internationalism and humanism, we have been unremittingly providing aid to related countries. Even at the time when our country was faced with difficulties, we did not stop aid and support to those countries, but rather we built many projects for the economic and social development of those countries. Just now, we have introduced the situation in this respect through facts and data.

There are two examples. The first one is about the medical teams we dispatched to foreign countries. We have dispatched 50 medical teams to Africa for 50 years, and more than 4,000 personnel work there for a long time. To combat Ebola this year, we have dispatched 500 more personnel there to meet the demands of Western African countries, and the dispatch will not end, and there will be about thousands of medical care personnel and experts to be dispatched, working abreast with local people, government, doctors and nurses. This reflects the spirit of humanism and internationalism, and these doctors and nurses are honored as “White Angel” in the recipient countries. The second one is about the Tanzania-Zambia railway. When some western countries refused to provide aid, and despite that our country was also faced with difficulties, we provided aid and constructed the railway of 1,860 kilometers at the request of the recipient countries. The railway has become a railway of friendship, and also a railway of development.

During the 60 years of foreign aid, more than 700 people have sacrificed their lives abroad, making great contributions to China’s foreign aid. China’s government and people, and the governments and peoples of the recipient countries will not forget them. All this sincerely demonstrates that the friendship between China and the recipient countries is genuine and selfless and will last forever. Therefore, the criticism is groundless.

Secondly, we can see from some areas and projects China has aided that China’s support to those countries is comprehensive and able to satisfy their needs. The grants and gift loans China has provided are mainly used in some livelihood areas like agriculture, education, medical treatment, health care and social infrastructure, and the preferential loans mainly focus on some major social and economic infrastructure projects in transportation, telecommunications and electricity areas. Recently, we have carried out cooperation with African countries in energy areas, which is normal investment and trade behavior in line with international markets’ laws and rules and is understandable. Therefore, it’s groundless and for no reason to accuse China of robbing resources and practicing neocolonialism.

Phonex TV: We have noticed President Xi Jinping mentioned recently in a central work conference that China’s foreign aid is to advocate righteousness for win-win cooperation. Do the new measures reflect such ideas and what does China plan to do in the future? In addition, we have noticed you just mentioned that China has donated over US$400 billion in the past 60 years, with an annual average of US$6.6 billion. The data also said that over US$80 billion has been provided for the past three years, so it’s a process of acceleration. As you mentioned just now that China’s rising power has won higher expectations from other countries, so does it mean that China’s foreign aid will rise greatly in future years? What’s the order of magnitude?

Zhang Xiangchen: To advocate righteousness for win-win cooperation generalized by President Xi Jinping well reflects the principles and characteristics of China’s foreign aid. The right view of righteous profit is what we need to display all along in foreign aid, which involves the relation between “benefits” and “righteousness”. The “righteousness” here refers to international moral and social justice and “benefit” represents the interests of people in aided countries. What China gets from foreign aid is mutually beneficial interests. Along with China’s sincere aid to those countries, governments and peoples, our relations with those countries got consolidated with rising international status. That can be regarded as China’s benefits.

Just now, you mentioned that China’s foreign aid scale will surely get further improved in the new situation. We will increase the aid by a large margin compared with the past. With the implementation of the Belt and Road Initiatives, the neighboring aided countries have put forth a series of requirements for aid in response to China’s strategies. We will study them carefully and expand our aiding scale in accordance with our practical capability and their demands.
Next, welcome Director-General Wang Shengwen to make a supplement.

Wang Shengwen: China’s foreign aid has gone through 64 years. Generally speaking, it has become a model of South-South Cooperation. The Measures we are talking about is a systematic conclusion of the characteristics and experience China has gained from her foreign aid over the past 64 years. We could say China has formed a foreign aid model with Chinese characteristics, which is highly spoken by aided countries. Along with China’s foreign aid, firstly, we respect the sovereignty of aided countries and do not intervene in their domestic affairs. Secondly, we aim to help alleviate or eliminate the poverty of the aided countries and improve their independent development ability. We care about aided countries’ concern and provide humanitarian aid at the first time when disaster comes. Take the Ebola that broke up in West Africa recently as an example. The Chinese government has reacted immediately and provided assistance together with relevant international organizations and other countries. And we have trained a great number of technical and management talents covering all walks of life including administration, culture, education, medical care, health, and sports for the aided countries through academic education and short-term training.

China’s foreign aid has several characteristics. Firstly, we adhere to equality and the right view of righteous profit. China’s foreign aid has sticked to traditional Chinese culture of “Ways run parallel without interfering with one another. All grow together without harming each other. ” We do not have any additional political conditions, nor intervene in any aided countries’ home affairs. Under the framework of South-South Cooperation, we respect the diversity of world culture and different development modes, respect recipient countries’ rights to choose their development roads and models on their own, stress to help recipient countries improve their independent development ability and support them to choose a road of self-reliance and independent development.

Secondly, we abide by honesty and credit and pay attention to the development of people’s livelihood. Since 2000, under the frameworks of UN meetings, the China-Africa Cooperation Forum and the China- Portuguese-Speaking Countries Forum, the Chinese government has announced a series of assistance measures and implemented them genuinely. We could say that improving people’s livelihood is the focus of China’s foreign aid, and the least-developed countries and other low-income countries are the targets of China’s foreign aid.

Thirdly, we focus on strengthening recipient countries’ ability building. China attaches great importance to training talents for recipient countries. During 2010-2012, the Chinese government aided nearly 80,000 overseas students from developing countries to study in China, and trained nearly 50,000 people from all walks of life of developing countries. In addition, China also trained a great number of talents for recipient countries through technological cooperation, the dispatching of medical teams and volunteers. All has played a positive role in strengthening recipient countries’ self-development ability.

Fourthly, we advance with times and constantly enrich the contents of assistance. Although China’s foreign aid has formed a developmental mode of its own and achieved remarkable results, we still advance with times, learn from good doings of other countries while working close to recipient countries’ demands. To face the challenge of poverty-alleviation around the world, China has put the livelihood projects and human resources training at a very high position in foreign aid, and listed the promotion of regional connectivity into the assistance contents in line with recipient countries’ demands for regional integration. Meanwhile, to help them cope with climate changes, China is also making active efforts to assist in the environmental protection and wildlife protection.

All in all, China would like to make efforts to improve the self-dependent development ability of the recipient countries constantly.

CNR: Director Yu, what work will be promoted in foreign aid when the Measures are released?

Yu Zirong: After the Measures are issued, the Ministry of Commerce will mainly regulate foreign aid management, raise the management level and advance the reform of foreign aid project management modes steadily and orderly in accordance with the concrete requirements of comprehensively deepening the reform and opening up, the administrative approval system reform and advancing rule of law made by the Party Central Committee and the State Council.

Firstly, we would improve the foreign aid policy system and strengthen the top-level design and policy planning. We plan to work with relevant departments in 2015 to formulate the mid- and long-term policy guidelines on foreign aid, and for different countries. Since 2013, the Ministry of Commerce has fully initiated the formulating of the guidelines on aiding foreign countries around the globe, and completed the formulation on all African countries in 2013, and finished the guidelines on recipient countries outside Africa in 2014. So the formulation of the guidelines on foreign aid around the globe has basically ended so far.

Secondly, we would perfect the legal system, including advancing the legislative process of laws on foreign aid. The Measures just regulate and conclude the foreign aid work from the aspect of the department. Going forward, we will continue to formulate and issue management rules on foreign aid in accordance with the central government’s requirements and regulate the foreign aid work from the aspect of administrative regulations. In addition, we will follow the Measures to comprehensively revise and perfect the present supportive regulations and implement the reforms on the present system.

Thirdly, we would strictly control the foreign aid capital and budget management and try to improve the budget and planning management system according to the characteristics of foreign aid.

Fourthly, we would further perfect the present bidding system for foreign aid projects in line with the basic principles of the government procurement law and the tendering and bidding law, strengthen control and supervision on task assignment, and implement the principles of fair and efficient competition.

Fifthly, we would positively enhance the innovation of management modes of foreign aid projects. This contains several aspects as follows: firstly, on the present supportive projects of foreign aid, we will promote the reform on the model of “project management and EPC (Engineering, Procurement and Construction)” on the basis of summarizing and learning from international contracted projects doings. Secondly, we will implement the project quality responsibility system for life. Thirdly, we will popularize the localized project implementation model in eligible recipient countries based on the present conditions. Fourthly, we will establish and perfect the assessment system on the overall process of foreign aid projects. Assessment has been a weak link of the present foreign aid management and we have stressed the implementation but ignore the assessment for long. Western countries’ doings in this respect could serve as beneficiary reference for us. That will be an important aspect for us to innovate management modes moving forward.

ChinaNet: How does foreign aid support China’s Belt and Road Initiatives and neighboring diplomatic strategies?

Yu Zirong: Since the 18th National Congress of the Communist Party of China, in order to advance peaceful development, the new central leadership with Xi Jinping as general secretary has put forth some important strategies like the Belt and Road Initiatives and periphery diplomacy to participate in global governance. In implementing the central government’s strategic deployment, the Ministry of Commerce has mainly given foreign aid’s leading role in advancing the Belt and Road Initiatives and periphery diplomacy into full play. Our major considerations are as follows:

Firstly, we will strengthen aid to recipient countries along the Belt and Road as well as major neighboring recipient countries in accordance with the overall national strategic needs and recipient countries’ needs. Newly-added aid capital will mainly go to these countries.

Secondly, a batch of major strategic projects focusing on the Belt and Road Initiatives will be carried out to enhance the connectivity between China and the neighboring countries. The connectivity here has a wide range, including the connectivity of highways, railways and ports, and the connectivity of energy, transportation, telecommunications and networks as well. At present, a batch of projects on highways, railways, ports and airline transportation in key countries like the Laos, Myanmar and Nepal have been carried out to support their infrastructure construction in energy, telecommunications and networks.

Thirdly, we will push forward livelihood projects in countries along the Belt and Road and in neighboring countries. In the respect of foreign aid, the focus of the Belt and Road Initiatives is to establish a sound public opinion foundation and friendly environment with the neighboring countries. Therefore, the aid will mainly go to the areas of poverty alleviation, disaster reduction, vocational education and agricultural development that could benefit people in the recipient countries directly.

Fourthly, we will strengthen human resources development cooperation with neighboring countries and the countries along the Belt and Road, provide senior academic education and short-term seminar training, go global to hold universally beneficiary practical technical training, enhance exchanges with those countries in cultural, educational and scientific and technological areas, and increase the number of volunteers dispatched for foreign aid. Through all the efforts, we would like to popularize China’s periphery diplomatic ideas and development modes and enhance the communication and understanding between China and the neighboring countries.

National Business Daily: Director Yu, the subjects to carry out foreign aid projects are enterprises. Would you please brief us on how to choose enterprises? You mentioned the tendering and bidding projects just now, so will they need to pass the tendering and bidding procedures?

Yu Zirong: We have been sticking to the bidding principles of being fair, competitive and efficient for long when doing foreign aid projects. Since the reform of the foreign aid management system in 1993, a market-driven bidding system has been introduced to foreign aid projects, which took the lead in the country then since our country’s tendering and bidding laws were not carried out until 2000. Major efforts have been made as follows in regulating and promoting the bidding of foreign aid projects.

Firstly, we have regulated the implementation subjects of foreign aid projects. MOFCOM began to formulate the qualification certificating system for supportive projects construction enterprises and supply projects implementation enterprises in foreign aid in 2014. So far, any qualified enterprises in the country could join the implementation team for foreign aid projects through public qualification certificating procedures.

Secondly, MOFCOM has published foreign aid projects information on special bidding websites to all implementation teams for foreign aid projects, conducted strict qualification preview procedures and chosen specific enterprises by public bidding.

Thirdly, we have constantly perfected the present assessment principles for foreign aid projects. At present, MOFCOM has formulated the assessment principles for foreign aid projects in the aspects of project construction, supplies, soft aid, and human resources, and revised and improved them constantly.

Fourthly, we have strictly controlled the invitation and bidding procedures. The overall supervision procedures of sending bidding documents, answering questions, bid opening, bid evaluation and award for foreign aid projects were strictly implemented. We have established a supportive publicity and Q&A system for foreign aid projects, so enterprises applying for foreign aid projects could appeal and pose questions through open channels and the transparency and credibility of assessment results will be improved by administrative supervision departments. Besides, an independent expert tank for foreign aid projects and a regular bid evaluation office are also set up to effectively avoid various human disturbance by way of closed-off management and random selection of evaluation experts.

All in all, the performance of the bidding system of foreign aid projects has got on well so far, and has been unanimously highly spoken by implementation enterprises that have joined the competition for foreign aid projects.

Hu Jinsuo: That’s all for today. After the conference, you could contact the Information Office for the press release. Thank you, Assistant Minister Zhang Xiangchen. Thank you, leaders from the Department of Foreign Aid, and thank you, our friends from the media.

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