| Abstract A Study on China's Foreign Assistance Reform Key Words: Study on China's Foreign Assistance Reform Tutor's Name: JIANG Pin Author's Name: JIANG XiangyingBased on the massive investigation and data collection, together with the basic theories of Official Development Assistance, the essay focuses on the issues of China's Foreign Assistance Reform in 1995. With the deep and abundant experience of myself in this line, it offers suggests and ideas in dealing with the problems and difficulties in the process.1. Foreign Assistance is a kind of international transfer of Capital mainly together with resources, technology and other productive sectors. It is the key form of international economic cooperation, and a kind of strategic expenditure for a country. China' Foreign Assistance system is totally different from the western countries without any conditions tied with the loan terms.2. China' Foreign Assistance began in 1950, and has 5 different periods from then. It helps greatly in China's development of diplomatic relations and foreign trade, raising the position of China as a great country and stabilizing the international environment for China.3. The basic procedures of China' Foreign Assistance before 1995 were, According to the agreement between two countries, Chinese government granted interest-free loans to recipient countries, mainly in the following forms: complete plant, technological, material, cash and military assistance.4. China has to reform it's policy and system of Foreign Assistance which had been for more than 45 years, since the international and domestic environment has been changing after the Cold War. China learns a lot from the past experience of it's foreign assistance. The main contents of the reform in 1995 were: to push the implementation of Concession Loan in order to assist Chinese enterprise to set a joint venture or a project in the host countries to exploring the natural resources, and to increase the employment in the recipient country. In the coming years at the same time of enlarging the amount of free assistance, Chines government would not give interest-free loans as in the past. It stressed the work of loan repayment and improvement of the management of foreign assistance.5. The Concession Loan is a grant loan with more than 25% grant element, interest rate is between 2-5%, and the period is 8 -10 years. Difficulties and problems especially for the concession loans occurred during the period of the reform in 1995:a. High interest rate, short loan period comparing other official development assistance hindered seriously the implementation the reform of China's foreign assistance.b. The capital of free assistance is too small to meet the demands from the recipient countries. Those recipient countries once in the past received China's interest-free loans still expect the same loans and reluctant to accept the new forms of concession loans.c. Poor management of the project.d. High risk of repayment.In order to solve the problems, Chinese government has to establish a special fund to compensate the loss of the refund for the concession loans.6. China has to adjust and rearrange the amount, structure and layout of the China Foreign Assistance in the new periods according to the changing of the international situation.7. This essay raises a new idea as "the repayment of the loan concerns the respect of a government". To discuss the issue of repayment of the loans does not mean that we force the recipient countries to repay the debts. I think to discuss the repayment is also consistent to our foreign assistance policy. It suggests our government emphasize the work of refunding, and the recipient countries may repay those loans using either their foreign exchanges or their export commodities etc. First of all, to my point of view, the countries concerning should sit together to discuss the issues seriously according to the policy of China's foreign assistance.8. Foreign Assistance is a cr... |
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